Internet Applications: Rethinking Web Business Models

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If I were starting a “web company” today, I wouldn’t do it until I had read Andy Jedynak’s speech from the latest MarketingSherpa subscription summit. Andy is VP and GM of WeatherBug.

WeatherBug.com has a web site, of course. But it’s mainly a marketing brochure for something far more powerful than a web site: a free downloadable Internet Application.

Launched in 2000, WeatherBug has had more than 43 million downloads, and earlier this month, during the hurricanes, more than 7 million people were daily accessing the WeatherBug desktop app. Media Metrix said 24 million people used the site in July.

Jednyak said that back in 2000 Forrester Research was predicting that by 2004 internet applications would “eclipse the web.” So they build a downloadable app. Last December, Nielsen NetRatings said that 76% of web users were also accessing the internet through a desktop application (such as iTunes, Skype, media players, WeatherBug, and instant messaging apps). He reminded his listeners that another prediction back in 2000 was that by 2006 more people will be accessing services using portable devices (or “internet appliances”) than desktops.

Whether (or weather) these predictions are accurate or not is not the point. The point is that internet applications can be incredibly sticky, once you get them on the desktop (more sticky than just a bookmarked web site), and that they are feature rich, and that you can build successful business models on them easier than by launching just another web site.

In mid-2001, Ancestry.com got into the internet application game when we introduced the Ancestry Family Tree software download, a free download that had a nice interface to our nearly 2-billion genealogy records. Within the first year, there were approximately 1 million downloads of this full-featured genealogy software application with an integrated online search tool.

The Ancestry Family Tree started taking away market share from Family Tree Maker and Personal Ancestral File. It has the potential to generate many subscriptions to Ancestry.com. But MyFamily.com acquired Genealogy.com and Family Tree Maker (the leading genealogy software program) in 2003, and I’m not sure whether they will focus on selling software or on given away an application in the hopes of selling subscriptions to the content. Maybe they can accomplish both, using a multiple brand strategy.

LDSAudio.com (one of our portfolio companies) is about to introduce an audio download manager. Next year we intend to greatly enhance the functionality of this download manager and turn it into a full-blown desktop application for helping our customers interact with content that they find valuable.

Napster and KazAa were applications; Google’s soon-to-launch download app will allow you to search every file on your hard-drive without a browser. Their browser plug-in already searches the web without running a browser.

The potential exists for many web sites to develop compelling applications which utilize the internet for content and communications, but don’t necessarily depend on a browser’s limited feature set.

I’m rethinking some of my online strategies in view of the compelling presentation from WeatherBug.com. Perhaps you should too?

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