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Monday, May 13, 2002

Commmunity can work on web
By Katie Hafner
New York Times

Way back in 1996, "community," with all its warm, fuzzy associations, was the buzz word du jour among Web start-ups and venture capitalists. The idea seemed simple enough. Devote a portion of your Web site - or your entire site for that matter - to chat areas and discussion forums, and people will not only show up but they will stick around and form lifelong virtual bonds with one another, clicking on ads aplenty in the process.

Venture capitalists financed such enterprises generously. But four years and dozens of disappointments later, community portals, as they came to be known, have fallen, and hard. The Globe, iVillage and others in the doldrums have learned that while community is an attractive notion, it does not transfer easily to the commercially minded Web.

"One thing we didn't know in 1996 is that it's very, very difficult, if not impossible to sustain a culture with online advertising," said Howard Rheingold, an author who is generally considered the eminence grise of virtual communities.

Rheingold pointed to his own highly visible venture-backed Web site, an elaborate online community called Electric Minds, which shut down nine months after the site went up in November 1996.

"It's not that there's no viable business," Rheingold said. "But it's nothing that would make venture capitalists happy who want $10 million back from the $1 million they invested, and they want it in 18 months." Rheingold now runs Rheingold Associates, which advises organizations on building what he prefers to call social online networks.

Indeed, venture capitalists now hear the word community and run the other way. "Since last April, anything that smacks of community, they're shying away from," said Amy Jo Kim, a consultant and author of "Community Building on the Web: Secret Strategies for Successful Online Communities" (Peachpit Press, 2000).

At the same time, Kim noted, companies are learning to incorporate components of community into their Web sites without expecting direct financial benefits. "These companies are using community to support some other activity such as trading, shopping, playing games, and buying and selling, rather than an end in itself," Kim said.

She cited Adobe Systems and Dell Computer as two companies that make effective use of online communities. Both offer strong customer support areas on their Web sites, where staff members and customers alike answer technical questions.

"Business people should be looking at their online communities less for immediate revenue generation," she said, "and more for enhancing the customer experience."

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