Take a Leap of Faith And Become a Net Market

Folio: The Magazine for Magazine Management, March, 2000

The "clicks and mortar" approach of leveraging online and offline relationships with buyers and sellers through content and e-commerce initiatives is considered the hot business model for media companies, says Jeffrey Dearth, a managing director with New York-based DeSilva & Phillips Inc. And, he adds, it's a smart move.

A Net market brings buyers and sellers together in a Web environment that allows them to transact business through you--and you can take a cut from the action. While there are hundreds of Net markets in existence, relatively few are from publishers. Advanstar's announcement last December that it planned to launch several vertical online marketplaces to allow users to research, source, bid on, and buy and sell products and services is a wake-up call for publishers. However, "Developing a Net market is not a slam dunk," says Dearth, who has been consulting with publishers interested in this model for several years. "The trick is to build a comprehensive site with a critical mass of buyers and s ellers. Some advertisers don't like being in the same place as their competition. Yet they'll be there if that's where business is being transacted." Other issues: Do you treat your best magazine advertisers the same as the others in the Net market? Will you lose readers or advertisers to the Net market? "For publishers, it's a leap of faith because it's fraught with a lot of sticky issues," Dearth says. "But the bottom line is: If publishers don't build it, someone else will."