REALITY CHECK: Image is fine. Sales are better

Eisenhardt: Just having a brand isn't much. It doesn't hold people when a competitor is only a click away -- when it's much easier to switch than it is in the physical world. CDNow had a brand in the music space, but that didn't prevent customers from going to or Liquid Audio for music. In better companies, there is a real attention to metrics -- a specialty of Yahoo, which is very good at monitoring key metrics and figuring out how to make money.

Johnson: I don't know if we've really made the big breakthroughs on the Web at this point. With motion pictures, it took 30 years before someone thought of doing a close-up. On the Internet we probably haven't discovered the close-up yet.

Mooney: We can tell which sites technicians have built and which have been built by people who understand retail. Retailers know where to put the most expensive stuff. They know how to trigger impulse buys. These formulations, fully developed for brick-and-mortar retail, haven't been executed well on the Web yet.

Peabody: Merchandising is absolutely the most critical component of any E-commerce company. People try to brand their sites, but it's really more important to show an image of what you've got instead of asking customers to guess. If you let them guess, they'll guess wrong.


To help us deconstruct the myths of the Web, we turned to expert observers of the Internet phenomenon. Their comments can be found after each of the case studies we presented. Here are their credentials:

Martin Anderson , management professor at Babson College, in Wellesley, Mass., advises executives who are transforming their traditional companies into "click and mortar" businesses.

James J. Cramer is the brash cofounder of and columnist at He has built successful careers as both a journalist/pundit and a hedge-fund manager.

Kathleen Eisenhardt is a professor specializing in competitive strategy at Stanford's School of Engineering. She recently coauthored Competing on the Edge: Strategy as Structured Chaos.

Chip Hazard is a general partner and E-commerce specialist at the venture powerhouse Greylock, in Boston. He helped launch the e-Steel exchange.

Tod Johnson , chairman and CEO of Media Metrix Inc., based in New York City, is a widely recognized expert on brand loyalty.

Ted Leonsis is president of AOL Interactive Properties Group. In his first three years at America Online (starting in 1994), it grew from about $100 million in revenues to $1.5 billion.

Kelly Mooney is director of intelligence at Resource Marketing Inc., a technology-marketing firm in Columbus, Ohio. She has helped companies such as Victoria's Secret develop their on-line strategies.

Allen Morgan is a general partner at Mayfield Fund, in Menlo Park, Calif. He has been involved in more than 350 venture-capital investments and public offerings.

Bo Peabody is a cofounder of Tripod Inc. and vice-president of network strategy at Lycos Inc. When he was still in college, Peabody founded Tripod, which helps people build their own home pages. In 1998 he sold the company to Lycos.

Scott Randall is founder and CEO of Internet-auction hosting service FairMarket Inc. Randall has been involved in E-commerce since 1995, when he launched an on-line store. He has been president of the Internet Shopping Network and Yahoo Marketplace.

David Rich is vice-president of marketing and brand guru at, which provides on-line services to small businesses. He previously orchestrated brand campaigns for Walt Disney, Pepsi, and Jamba Juice.


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Published on: Feb 1, 2000