The Peacock Portal - NBCi

Brandweek, Jan 29, 2001 by Hassan Fattah

With a marketable brand and an arsenal of advertising, NBCi figures it still has a shot at being fourth behind MSN. But can the "must-surf" portal beat Yahoo or AOL?

Will Lansing knows what most people say about NBCi, and it isn't pretty. As the CEO of the laggard portal company, Lansing has faced his share of critics, and most of them are emphatic that his ideas won't work. He mimics them, criticizing him. "You guys show up a few years late, a few dollars short and you say you want to be a portal? Who are you kidding?"

But make no mistake. Lansing doesn't kid about NBCi's prospects. For close to nine months, since taking the helm of the woozy portal, Lansing has preached the gospel of the dot-com's revival. "We've told the world that we're in the same class as AOL and Yahoo," Lansing pronounces. "We didn't say we're RC Cola-- we said we're Pepsi."

Chalk it up as ego, call it hubris and dismiss it as dreaming. No matter what you say, Lansing--the former CEO of Fingerhut and a well-respected turnaround man--is convinced that the peacock still has feathers to fly. It set out to be a portal killer, but fuzzy strategy left it lost in the woods. Now his strategy for making it happen is this: talk to Middle America, the fastest-growing demographic on the Web. Lansing is convinced that users will like NBCi better than Yahoo's "skateboarding attitude."

Last September, after months of reorganization, NBCi showed off the beginnings of that strategy. The company unveiled a revamped portal complete with new name, design and services. The company gutted its checkered network of sites and reshaped them into a unified portal, eliminating the Snap.com and Xoom.com brands, and melding all its sites under the NBCi.com umbrella.

Far from Yahoo's iconoclasm, NBCi aims to be a mainstream name that will speak to the people who read People, who watch Friends and hum the tunes of Britney Spears, says Lansing. And with a three-year, $100-million branding campaign that plasters NBCi's name on all of NBC's properties, Lansing figures he's got the arsenal to make his portal the comeback kid.

"The world doesn't know that we're the number 13 site on Media Metrix. Maybe pundits do, maybe Wall Street does, but the average Joe watching ER or Friends or West Wing doesn't," Lansing asserts. "All they say is, 'Here's a quality brand that does the same thing that Yahoo does.' "That alone is going to get a lot of people interested, he figures.

But is that enough to keep them coming back? Neither his critics nor analysts are convinced that his portal is a peacock and not a turkey. For all its changes, NBCi's biggest battles are still ahead of it. Its image, its revenue stream, even its relevance are still in question. About the only thing not in question is that Lansing is one of the few fixers who could make this turnaround happen.

"I operate in broad, Middle America terms. I don't live in a Bay Area bubble," he says.

If Lansing is right, his strategy will be an ode to the new metrics of branding and marketing on the Web. If he's wrong, the portal play may signal the end of portal competitors five or six on down. Watch closely, all you marketers and advertisers. Something big may happen here.

FRACTURED BEGINNINGS

In retrospect, NBCi's beginnings are at the heart of its problems. It was formed in late 1999 by the merger of Xoom.com--the free Web hosting and e-commerce provider--several of NBC's online properties and its majority-owned portal Snap. NBCi was essentially a network of sites cobbled together, each with an established dot-com brand that could channel traffic from one site to the other. The new company picked up NBC's name, but the sites were organized and branded under the well-established Snap umbrella built by Cnet.

The problem from the start was that all its services and features were in different areas across the network, making navigation complicated while wasting considerable resources to reach an audience.

Most troubling for Lansing were the precious marketing dollars being wasted propping up all the various brands. In the end, NBCi was Snap, Xoom and NBC.com, all brands that had to be built and maintained.

Marketing alone amounted to more than $37 million of the $86 million NBCi lost during 1999. The company went public in November 1999, shortly after the completion of the merger. It completed a secondary offering in February, raising $360 million, just months before the dot-com collapse. Thanks to a $380 million advertising fund thrown in by NBC at the time of the merger, NBCi also had a bank of ad dollars it could use to get its brand out on NBC channels such as CNBC, NBC and others.

But NBCi's strategies lacked longevity, changing almost quarterly with the whims of the latest executive who came on board. Former CEO Chris Kitze led the company through an unsuccessful e-commerce play that cost $90 million in late '99. He later tried to turn the service into a B2B play, purchasing small business portal Allbusiness.com for $250 million. Its plans never worked, and they only encouraged top-notch talent to take flight.