As Founder and CEO of PeopleLink, Steve Glenn
has paid close attention to the online community sector for many years.  His thoughts
on his firm and future trends.

Can you say a bit about PeopleLink’s business
strategy?

PeopleLink’s business strategy is to be the
leading provider of eCommunity technology and services to Global 1000 businesses. We see
eCommunity playing a significant role in helping these enterprises improve their
marketing, sales, and customer support (CRM) initiatives and programs.

PeopleLink is uniquely positioned to provide both the
applications and the services required to effectively launch, sustain and derive value
from eCommunities. We’ve developed our own, Internet native, proprietary technology and
it’s highly scalable, dependable, and customizable – which gives us tremendous
leverage as we pursue this market. In addition, we’ve developed a world-class
consulting, implementation and community management service capability.  By marrying
a completed suite of community technology and services, we are one of the only true
full-service community provider.  This, combined with the experience we have with
Oracle, GE, CBS, NBC, MTV, VH1, FOX and others give us the know-how, depth and
capabilities to deliver the highest quality client service and best ROI for our
client’s investment.

What are you seeing these days in the sector?

As other technology companies have attested, we are
seeing a slowdown in technology investment by many businesses. But at the same time, our
message of using eCommunity applications and services to augment business initiatives
resonates strongly with the companies to whom we are talking.

We continue to build partnerships and client
relationships with media and entertainment companies, which has always been the core of
our business. And we are making inroads with companies such as Oracle and GE where we see
the business application of eCommunity taking shape.

PeopleLink conducts research on online
communities.  Can you say a bit about that?

Sure – last year we conducted research with
McKinsey and Co. using Media Metrix data. Essentially, we wanted to see if there was any
quantitative support for how eCommunity affects user and customer and site visitor
behavior. We’ve always been able to point to anecdotal evidence to show the benefits
of eCommunity, as have others, so this was an attempt to verify and validate the anecdotal
data with a statistically significant number of end users (50,000).

What we found was very interesting and encouraging.
There is a definitely a correlation between eCommunity usage and retention (community
users are 2x more likely to be retained), frequency of site visit (up to 9x times greater
for community users), and likelihood of buying products (community user conversion is 1.8x
greater than non-community users). Bottom line, the study showed there is a measurable ROI
for organizations that integrate eCommunity into their business and Web initiatives.
We’ve published a white paper that discusses the research results, which we’ve
been providing to clients and prospects over the past few months. [Editor's note: see http://peoplelink.edm5.com/ocr8/ ]

How big a market do you believe the community
strategy/management field is currently?  In two years?

We don’t have any clear numbers.  We believe
community will prove to be an essential part of the $20 billion customer relation
management market and as such, we think there is significant opportunity.  But
enterprises are still grappling with implementing ebusiness and CRM initiatives, and
awareness of community is much lower, so it’ll take some time to educate the market
on its advantages.

Can you name several corporations that have
community strategies that others might emulate?  Are these communities directly
profitable, or justified in other ways?

There are several companies that have successful
eCommunities and community strategies. Companies such as Adobe, Apple, Oracle, and GE have
launched and are sustaining serious business eCommunities that are delivering real
results. In the e-tailing arena, Amazon is a terrific example of a company with a sound
community strategy. ZDNet has also successfully incorporated elements of eCommunity into
their products.

You have a varied background: software design,
Apple, Disney, idealab, Coro Fellow.  Why are you in the online community space?

Turns out I’ve really spent a good chunk of my
career focused on how community can enhance people’s ability to learn, play and
communicate.  Before Disney, I was with a start-up that worked on SIMNET, the first
large scale virtual reality network.  We then developed some of the world’s
first virtual reality software for entertainment applications.   At Disney, I co-ran
the VR Group and we developed multi-user attractions for the parks and DisneyQuest,
Disney’s location-based entertainment venue.  For a variety of reasons, our
group did some of the first technical work for Disney Online and it was there that I
learned about the power of the Internet.  I found I was most interested in community
applications because I realized that by allowing people with shared interests, backgrounds
and affiliations, they were doing something fundamentally new and important.  Shortly
thereafter I began to develop the ideas behind PeopleLink and in it, I saw an opportunity
to wed both profit with purpose, something that’s important to me.

As a Product Planner with the MSN Communications
Group, Craig Kerwien oversees online community initiatives that are underway — and on the
horizon.  His thoughts on current initiatives at MSN and the future.

Can you describe the MSN initiatives that
involve online communities?

Because communities come in all shapes and sizes, MSN
offers several services to meet the needs of a wide range of audiences. We have a deep
history with chat, beginning with text messaging and then exploring avatars and 3D virtual
worlds. Recently we launched Chat Radio, which allows users to enjoy themed chat rooms
accompanied by a soundtrack and additional streaming media. Our user-created community
services launched over a year ago and has been wildly successful. It provides features
such as message boards, photo albums, customizable web pages, and a list application that
allows users to manage and define a dynamic list of information, like web sites, books or
parents helping out at a Little League function. On a personal level, MSN Messenger
provides instant messaging between friends and family, and we are also offering a
development kit to enable other software developers to customize the messaging client to
meet their specific needs. In turn, these platform services are building blocks for
various community activities across MSN: MoneyCentral has an active message board for
stocks and investing, our Product Support Services group uses chat to help support Windows
Millennium and other Windows developers, in addition to many other services.

You have various forms of communities for
several years. Can you share some of the lesson learned?

• Solid management tools are vital when managing any
  space where users can contribute and post their own material.

• Expanding the scope of services to the international
  markets is hard work, and definitely worth the trouble.

• Have thick skin and lots of patience in managing
  public interaction spaces like message boards.

• When building a new service, plan for scale at the
  start, know your data center limits, and keep the servers running like a dial tone.

• Upon completion of a new service release, remember
  you’re not at the finishing line — you’re at the starting line where users will now use
  your features every day and you get to measure the results on a regular basis.

Any particularly noteworthy initiatives/areas
of focus you’d like to highlight?

The success of our online photo albums over the past
year lead to the recent launch of Picture It! on MSN. Online photo sharing has become more
popular than ever, and our Picture It! service had enabled people to easily get reprints,
photo mugs, clothing, and even postcards of the photos they share online. http://pictureit.msn.com

What are the main differences you expect in
online communities three years out?

Features will become richer as broadband becomes more prevalent, especially where
streaming media is concerned. Text messaging will be increasingly supplemented by media
and voice elements. We would all love to immediately share videos of our child riding
their bike without training wheels for the first time with their grandparents in another
time zone. The barriers around accessibility, cost, and bandwidth will slowly erode. And,
perhaps we’ll even have our own smiley emoticons customized to our own facial expressions.

By Chris Wolz
President, Forum One Communications

Diane Hessan is CEO of Communispace (http://www.communispace.com),
which provides web-based software and support for corporate online communities. Diane came
to Communispace with a background in corporate consulting and training, as well as
experience in the importance of collaboration (a cappella singing) and loyalty (Red Sox
fan).

Can you tell me a bit about Communispace? What
do you do? How many clients do you have and where you are headed?

Communispace provides organizations with online
communities that enable people throughout an organization – or across different
organizations – to work together productively despite time and geographic constraints.
When people work in Communispace, they are connected to a network of colleagues with whom
they need to share knowledge, exchange views and create the future. This group is their
virtual community. Through the software they can give each other advice, brainstorm new
ideas, share best practices, learn together, have conversations about difficult business
issues, survey each other and more. And, in addition to a unique environment, Communispace
also provides the facilitation and training services that ensure that the software
actually works. The result is that people can make decisions, solve problems, learn and
innovate faster and more easily than ever before.

For us the most important metric is not just the number
of clients, it’s the total number of communities. We have dozens of communities operating
at some of the best-known companies in the world. Companies like Hallmark, Conoco,
Transora and Trinity Industries are all using Communispace and in some cases extending
their internal communities to include their partners and customers.

We’re always working to improve our offering and help
make our clients more productive and innovative. Our newest version, Communispace 3.0,
enables community members to spin off and form "microcommunities",
sub-communities or task groups, while still staying tied in to the main community.

What level of investment do you see
corporations willing to make for online community/learning services? Five-figure
commitments? Six? Seven? And who in corporations (i.e. functional units?) are buying your
services?

You can start a community with virtually no upfront
costs, i.e. Yahoo clubs. But for an organization that is trying to do serious work and
concerned with security, they are quite comfortable paying six figures for a
professionally developed and facilitated community.

Executives from a wide range of functional areas are
buying Communispace. One of our clients is Hallmark, where 100 target customers are
connected in Communispace to give input into new products, talk about how they like to buy
and more. Hallmark has the voice of the customer hardwired into their organization 24
hours a day, 7 days a week and it’s a vibrant application. We think they will completely
revolutionize the way people conduct market research. Other corporate customers are
designing products from various locations, conducting employee orientation online or
sharing sales information among staffers.

Communispace says it has developed methods to
assess the "climate" of a community – how do you measure that?

Our "climate control" lets members of the
community see the participation levels, the general tone of the interactions, what issues
are hot, and which ones aren’t. Is this a community with more questions than answers? Are
there many people challenging each other’s assumptions? Or is it all sweetness and light?
Through technical features of Communispace you can actually see this displayed in dynamic
graphics. It’s a great way for people to move much more quickly to solve a problem.

Are you able to measure the ROI of corporate
online communities, to show impact on a firm’s bottom line? If so, how do you do it?

With online communities ROI may live more in the realm
of anecdote than precise measurement. We do know things like how much money a client saved
on travel. What’s harder to measure is something like: now we have a killer product idea
that came through our customer community. Would we have known this otherwise? If not, you
could argue that all the revenue that the product generates is the ROI for their
investment in Communispace. It could be huge.

Another example: we have a client that has its
engineers using Communispace to brainstorm a critical new product. They generated over 180
actionable ideas for their next-generation, fundamental product in about a week. One of
those is going to turn into a reality and make a lot of money. It’s also going to put
their competitors at a huge disadvantage in the marketplace. What’s that worth?

What are the three best community ideas you’ve
seen implemented across the Web in 2000 and why do you like them?

First, I’d say the ability to know who else is within a
community and knowing where they are really sitting. It is amazing to sit in a chat room,
or Communispace, and see that you are participating in a conversation with someone half
way around the world. The second is embedded instant messaging. Like the previous example,
it is quite remarkable that two people sitting on opposite sides of the globe can carry on
a conversation with out static, delays and broken connections. The third and final idea is
microcommunities. These sub-communities provide flexibility to implement highly tailored
online communities.

It’s almost 2001, so time for predictions! What
do you expect will be commonplace in corporate online communities in three years that we
do not see today?

I firmly believe that we’ll see facilitation of online
communities become much more widespread. This is the only way to get truly productive
communities. When the tech-only vendors see that their products aren’t solving the problem
they’ll wake up to this. Also, we’ll certainly see much more voice recognition, real-time
language translation, voice output and wireless capability. Online communities help people
work across time and space. Next we’ll have to help people work across languages,
cultures, and political systems. We’re only at the very early stages of what online
communities can do for the people of the world.

by Dan Shafer

Jim Cashel, an Editor of the Online Community Report,
is also Chairman of Forum One Communications, a web strategy and consulting firm.  
Through his work he advises online community firms on strategy, financing, partnerships
and mergers / acquisitions.  Despite the fact that he usually conducts the
interviews, it seemed worthwhile to check in on his views on the sector.

What are you seeing in the online community
sector?

On the most superficial level, times are tough for
online communities.  Funding has diminished greatly, ad rates have dropped, there is
relatively less M&A activity of significance (other than fire sales), and most
businesses abilities to monetize their communities have not kept pace with the
expectations of funders (albeit reasonable progress is being made).  I’m getting a
lot of calls from sites — including the largest sites — seeking advice.  At the
same time the best sites are still growing in traffic and sophistication and the services
are more useful than ever.

That is the short term view.  Can you comment from a broader perspective?

Overall, my greatest observation is that there tends to
be a major disconnect between "conventional wisdom" concerning online
communities and "empirical evidence". Business people (and VCs) tend to rush
towards ideas that "sound right" with a healthy dose of wishful thinking. They
seldom take a hard look at what is actually working online. The web is wonderfully
transparent — studied due diligence is very effective. Yet most people don’t pay
attention to what is and isn’t proven to work.

So what isn’t working?

Initially everybody launched hosted consumer community
sites on every topic you can imagine. By and large these have never taken off. There are
few consumer-oriented online community companies that have gone public, and those that
have have fared poorly.  When it was apparent that hosted consumer sites weren’t
profitable, people charged towards Fortune 1000 firms, convinced that each should have a
community site. A number of large firms tried, but efforts for the most part have
lingered. How many Fortune 1000 sites can you name with consequential online communities?
Next stop was corporate intranets with their high bandwidth and fat IT budgets. Again, the
expectations far outran the reality. I don’t know any large firms that depend
significantly on online group communications — even my own "online community"
firm relies principally on e-mail, IM and phone. Next came the e-commerce tie ins, which
also haven’t amounted to much to date.

That’s a depressing litany. So nothing’s
worked?

Wrong! Specific online community sectors have done well, but don’t get proportionate
attention. The "host your own" community sites have exploded. eGroups was adding
1.5 million users a month — pre Yahoo — with essentially no advertising. That’s
unbelievable. The web-based host your own sites are also huge: Yahoo Clubs, Delphi,
ezboard, InsideTheWeb, and several others. Community "help desk" functions are
clear winners, either in the conventional format of message boards in user support areas,
or new generation sites like epinions. The collaborative communities that have a goal
other than simple conversation, such as eBay or the Open Directory Project, are obviously
impressive. Finance communities have done well. Some media community sites have tapped an
astounding streak of participation and quality — Slashdot’s level’s of informed
participation amazes me.  There is a new "expert community" trend, which
seeks to harvest information from community members, which I find intriguing.

Where would you be placing your bets for the
future?

I hesitate to name specific companies or market niches,
but I will say that while many online community sites have been very successful to date in
building huge user bases and traffic, few do much more than provide a
"telephone" service allowing users to communicate with one another. I haven’t
seen any large sites that provide intelligent additional services to their users based on
sophisticated user profiles. There is a long (and valuable) way to go in the world of data
mining and enhanced services — "deep personalization" as the buzz would have
it.

I’d say that the less glamorous service industry tied
to online communities also will see solid growth — not explosive growth, but solid
growth. The community ASPs and consulting firms will do fine — even the Online Community
Report, we expect.

Where do you expect all of this is headed?

In the near term I expect the wireless intersection
with online communities to have a significant social impact. Right now we participate in
online groups only when we sit in front of our computers — leaving our workstations
forces us back into the real world. If we can interact with our groups or play our
multiplayer games through our Palm IX, virtual worlds will be hard to leave (think
Tomagotchi meets Doom). I live in San Francisco and already witness a lot of zombie-like
dot-commers walking through the streets talking to people I can’t see (on their cell phone
headsets). That constant connection to other realms is soon to become much more
commonplace. In the medium term, I expect communities to become much more useful than they
are now. If I combine careful profiles with collaborative tools (such as in evite), I
suddenly have ways to get a lot of very useful work done, not just communicate with
friends. In the long term, I expect the concept of "online community" will
disappear as people come naturally to assume that the web allows easy group
communications. I saw recently a website talking about promoting "offline
communities" (which I assume are those entities formerly knows as
"communities"). We shouldn’t care how groups interact — they are all
communities (we therefore may have to change the name of this newsletter — but not for a
few years yet…)

And what’s your take — why are you involved in
this industry?

I think it’s too important to miss. Since the time of
the caveman, there has been enormous progress in one to one communications (written
language, telegraph, telephone, fax, e-mail…). There has also been enormous progress in
one to many communications (printing press, radio, television, web…). There hasn’t,
however, been much progress at all in many to many communications. The predominant
mechanism, as it was ten thousand years ago, is still the face to face gathering. Online
communications allows for the first time an entirely new and powerful mechanism for groups
to collaborate. I don’t think that we as a society appreciate the significance of this
because it is entirely unprecedented. It will radically change our lives, and I want to
play a role.

Jim can be reached at cashel@OnlineCommunityReport.com .

by Jim Cashel

Blue Barn Interactive <http://www.bluebarn.com> is a New York consulting
firm specializing in online communities.  In her role as co-CEO, Marcy Kaye enjoys
the vantage point of working with many clients on new community initiatives.  Her
comments on her firm and the sector:

Can you tell me a bit about your business? What
do you do? How many clients?

We are in the business of working with our clients to
create online environments that optimize brand-to-audience, audience-to-audience and
intra-company communications. Our services are comprehensive, from drafting the
communications strategy and defining moderation best practices, to sourcing and
integrating the most powerful community software tools, to moderating the community and
implementing membership strategies on an ongoing basis. We are fortunate to have an
active, truly blue chip client base that includes Fortune-500 brands, major
content-publishers’ online divisions, dot.coms and other "new economy"-type
companies.

How would you characterize the current
environment for groups like yours? Are clients jumping into community features, or are
they hesitating?

As usual, the current environment is mixed. On the one
hand, the word "community" has been unhip by Wall Street standards for well over
a year now, and this affects not only service-companies in our space but also our clients’
willingness to include community features in their web initiatives. On the other hand, as
other business-model flavors-of-the-month, like e-tailing, vertical portals, eCRM etc.,
wax and wane with the market, our client companies keep returning to the fact that
technology alone never provides a complete solution, and that the human aspect of
communication must always be taken into consideration. That’s where Blue Barn comes in.
Our mandate is to assist our clients in creating and managing communications that reflect
a thorough appreciation of the unique qualities and expectations of their online
audiences.

What willingness to pay for community services
are you seeing in companies? Five-figure commitments? Six? Seven?

We see commitments in the five-, six-, and seven-figure
ranges, obviously depending on the complexity of the implementation. Our production of a
relatively straightforward online live-events series for a client may fall at the lower
end, while a full community implementation, including planning, technology integration,
ongoing moderation and perhaps even some custom application development will fall toward
the higher end.

What are some of the best online community
ideas you’re seeing currently?

Well we are working on a project for Time Warner Trade
Publishing right now that we think really straddles the cutting-edge of community and
content publishing, which is a relationship in which we are increasingly interested. This
project, called iPublish.com and set to launch in the first quarter of 2001, is an
ambitious online community that will unite readers, authors, and editors-changing the
publishing model by putting the process directly into the hands of the membership from
conception to publication. We are also starting to see an incursion, a welcome incursion
from our perspective, of community into applications previously defined as occupying the
collaboration and knowledge-management spaces. We expect to be very active in these areas
during the coming year.

How are you clients deciding the
"in-house" vs. "outsource" community issue? Is there a trend one way
or the other?

For clients that have decided that community is an
essential part of their web deployments, I believe that we and the other companies in our
space have done a solid job of explaining why professional moderation makes sense, in the
same way that many other professional services make sense to outsource. Our clients major
concern is providing the best translations of their core-competencies and brands within
the online environment. While without question our clients are the ultimate custodians and
protectors of their brands’ value, they do not always provide the optimal translations,
precisely because their focus has been to build and extend brand value rather than provide
translation services. Blue Barn’s focus on the other hand has been to provide these
interpretation services, and the most effective interpreters are specialists like us:
intimately familiar with the touch-points of both communicator and audience, and
possessing a solid mastery of the subtleties of human interaction.

What changes in your sector do you foresee two
years down the road?

Two years down the road is probably too distant to
call, but for the next 12 months at least we expect to see, or better still, we expect to
play a pivotal role in, the deployment of community elements in what are traditionally
thought of as b-to-b business models. This will mark a major shift for community, which
has traditionally been implemented in order to reach a more public audience. Further to
that point, we will see more community applications being used in internal or intranet
environments, especially insofar as these applications can play a role in collaboration
and knowledge-management. In general, we believe that the future will eventually present
all of the technological wonder-apps that we keep hearing about: convergent media,
pervasive communications, smart appliances, etc. What are rarely considered are the
substantial communications demands and management requirements that these developments
will place on the businesses that employ them. Blue Barn’s goal is to continue to provide
our clients with communications insights and management services that maintain their
relevance and value regardless of the current technological environment enabling the human
interaction.

Marcy Kaye can be reached at mkaye@bluebarn.com .

by Jim Cashel

Springing from a single bicycling forum (that
got really popular), ConsumerREVIEW.com offers forums and product reviews in 18 topics.
  CEO Max Mancini has overseen the growth of the company since its inception.
  His views on the sector:

Can you say a few words about
ConsumerREVIEW.com? Communities? Traffic? Business model?

ConsumerREVIEW.com is the leading source for consumer
product information on the web. We enable commerce by helping consumers to research
products and make informed purchasing decisions. Our product information is generated
through our 18 community Web sites. Each community, like AudioREVIEW.com, MtbREVIEW.com
and PhotographyREVIEW.com, focuses on creating an environment where enthusiasts can
interact and share their passion. Because each community is centered around common product
interests, the community members generate very valuable content in the form of product
reviews for other consumers who seek their insightful opinions. The community members are
very valuable
because enthusiasts are the most insightful than any other consumers — they use many
products in a particular category and love to share their experience with those products,
and as a result, they write high quality reviews.

Our 18 sites attract more than 2 million unique
visitors per month and yield more than 34 million page views per month. We also have a
total of 200,000 product reviews across all our sites.

ConsumerREVIEW derives revenue from banner advertising,
e-commerce relationships and content licensing partnerships.

Advertising: Since our
communities are focused on attracting participants who have very specific product
interests, we are able to attract the same types of advertisers who advertise in key
vertical print publications. We also attract a significant amount of advertisers who are
e-retailers. E-retailers like us because we have an audience that buys a lot of products
in specific categories. They like enthusiasts because repeat purchases are high and they
are loyal.

E-Commerce: Our community
members not only interact with each other on the site, but also use the site heavily to
research products. As a result, they want to click through to purchase the product
following their research process. We enable this through relationships with commerce
partners. Our commerce partners pay us for leads. We do not sell products. This is very
similar to the business models of MySimon or DealTime.com.

Content Licensing/Review Management
Services:  We have more than 25 content licensees. These are either
shopping portals or e-retailers who need high quality product information (primarily
product reviews written by the consumers) to help their customers buy the right product
for them. We have relationships with companies like Yahoo!, AltaVista, Respond.com,
BabyGear.com, West Marine and others to deliver our high quality content to their
customers. These partners pay us monthly fees to have this content delivered in their
look-and-feel.

Ad rates in community areas tend to be lower
than in content areas because of lower clickthrough. Do you find this on your site as
well? Or given your high degree of community focus, are clickthrough rates higher?

Click through varies depending on where advertisers are
interested in being placed. Our traffic is distributed between message boards and other
community generated content that is primarily used as a research tool. As a result of this
product focus, we are able to get better click through rates and resulting CPMs.

What are the best strategies for tying
community and commerce?

ConsumerREVIEW.com’s business is built, and each
community developed, from the first day around commerce. We have done this by managing
community member expectations and intentionally growing each community methodically. Grass
roots, guerrilla marketing growth tends to generate the best loyalty and is the most cost
effective over time. Most businesses don’t have this type of patience. We do because we
have seen the model work for the last four and a half years.

There are a number of consumer review sites now
online. Do you expect a proliferation of these sites? Consolidation?

I don’t expect to see new product review sites for a
while unless they are developed as grass roots initiatives with little funding. This is
not an area that the VC community is interested in investing in right now. Many late
entrants have closed their doors. The reason for this is that it is too expensive to
attract mass market consumers to write product reviews. That is why our approach is to
create a reason for the best review writers to hang out on our site and share their
experiences with us: we build strong, focused communities. This is extremely efficient and
sustainable. I think there will be pressure for consolidation, but I’m not sure many of
the sites on the Internet today that solicit consumer generated product reviews have
viable business models.

Will wireless communicating impact your
business?

Yes. Today we have a wireless site, goreview.com, that
provides our product reviews via wireless devices. Over the next few years we will see
advertising and commerce evolve over that platform. We are watching Europe and Asia, which
have much better infrastructure and innovation to see how business models evolve. Wireless
messaging will be the most effective tie into community. This will ultimately have a much
more significant impact on community businesses than general information available on the
devices.

What major trends in your business do you
foresee?

Consolidation in the "commerce enabler"
space. There are many sites that are trying to attract consumers early in the shopping
process, primarily in the research phase. All of these sites are trying to figure out how
to attract and retain consumers. Sites that have consumers/stickiness will be appealing to
sites that know how to monetize those consumers through ecommerce and other mechanisms.

by Jim Cashel

As CEO of CoolBoard.com, Josh Duhl has launched
a consumer service, launched a business service, introduced integrating technologies such
as community syndication, all the while growing a business founded only 18 months
ago.  His comments on his firm and the sector:

Can you say a few words about the history and
metrics of CoolBoard?

CoolBoard was founded in June, 1999 with the goal of
building the definitive infrastructure for enabling businesses to successfully generate,
manage, and distribute community content. We developed our suite of services with three
main goals: (1) Making online communities easier, faster, and cheaper to implement using
our unique hosted infrastructure; (2) Enhancing the ability of businesses to use online
communities to develop stronger relationships with their customers; and (3) Enabling
customers to build more active, borderless communities by aggregating community
discussions across multiple websites and creating unique features for community
syndication.

We launched our first service, our Express service for
small businesses and amateur websites in September, 1999. This service enables customers
to quickly implement hosted message boards, and to use CoolBoard’s community syndication
capability to tap into existing, active discussions on the CoolBoard network. Already,
over 160,000 sites have signed up for this service, and we are now adding over 750 new
sites per day. The viral growth has been amazing, and CoolBoard Express now ranks in the
top 400 hundred sites on the Web based on activity.

In mid-August, we launched our higher-end Business
Solutions product line. Our Business Solutions suite is intended for larger businesses
that want to build more effective online communities. Our hosted offering can be
implemented in a few days, and provides tight integration with a customer’s existing
content, registration, and user management systems. We already have a dozen customers
signed up for this service, including Interact.com (Act Software), Young Presidents
Organization, Metastream, and Bookface.

How do you make money?

CoolBoard Express is primarily supported by advertising
and direct marketing opportunities. CoolBoard targets advertising to end-users, on the
basis of the type of discussion that they are participating in. We also sell sponsorships
in webmaster newsletters and opt-in e-mail lists. Customers can also opt to pay a
subscription fee to remove CoolBoard advertising from their pages.

CoolBoard Business Solutions is an ASP subscription
service. Our commercial customers pay an initial set-up fee, and then an ongoing hosting
fee based on usage. Our deals are structured so that our customers have little risk, and
are primarily paying as CoolBoard delivers real results.

You offer content syndication (sharing of
message postings) across forums.  I’m aware of several groups that have tried this in
the past but have run into problems involving user confusion and ownership issues. How do
you avoid such problems?

CoolBoard has developed a totally unique system for
content syndication. This enables discussion activity to be shared across related sites.
Sites benefit from the critical mass of more active discussions, without giving up local
control over look and feel, banning users, and deleting unwanted content.

Although syndication of static content has been growing
by leaps and bounds, syndication of dynamic or community content is still an untapped
opportunity. There are a number of unique things that CoolBoard does to make community
syndication successful. First, we put our customer in control of how and where they want
to syndicate their content. Some of our customers just want to share content with specific
partners or affiliates, while others want to share content with many other sites across
the web. Second, although all websites can tap into the same pool of content in a
particular area, each site still maintains its own independent control over look and feel
and filtering out unwanted content. Third, we provide more value to the business that is
syndicating the discussion content, by enabling them to add some of their own branding or
links to the syndicated forums.

Benefits of community syndication include more active
communities, improved customer acquisition, and enhanced revenue and branding
opportunities. We already have seen discussion areas that are successfully shared by
hundreds of sites on the CoolBoard network. Many of our Business Solutions customers see
community syndication as a great opportunity to "own" discussions in their topic
area across the web, and reach customers wherever they are interacting on a related topic.

How do you decide which technologies to build
in house and which to outsource?

To date, most of our key technology has been developed
in-house. We aim to be the leading application service provider for the collection and
distribution of valuable user-generated content on the web. We provide a reliable and
scaleable service, along with flexible web-based management capabilities that allow our
customers to very quickly and easily make changes and adjustments to their community
areas, without relying on a technical team. We also have developed a flexible set of API’s
that enable our customers to tightly integrate discussions into related content and
information on their site.

Most external options were not adequate to address our
needs in this emerging marketplace. We have used third-party technologies in a few select
areas (e.g. searching, voice messages), but in general, we have relied on our strong
development team to build solutions that improve on all currently available options.

What are the biggest shifts in your segment of
the online community world that you foresee in the coming several years?

Companies are increasingly taking a more expansive view
of the benefits and applications for online communities. While initially communities
primarily provided entertainment value among customers, businesses are now recognizing
that they can serve a huge role in building stronger customer relationships, communicating
with large groups of users, and collaborating with partners and employees.

At CoolBoard, we are using our message board service as
a foundation to build a suite of capabilities for enabling more powerful group
communication on the Web. As a result, we see our customers using our technology for
market research, customer support, internal knowledge management, and collaboration among
resellers and partners.

We are also seeing a huge explosion in the range of
companies that are interested in community-based communication. Dot-coms tended to be the
early adopters of online communities, but we are now seeing strong interest from a range
of online and offline companies, including growing interest from major Fortune 500
companies. These companies are beginning to recognize the tremendous ROI from investments
in community-building among customers, partners, and employees.

The power of a community environment will eventually
replace e-mail as the dominant mode of group communication. In some form, community
communication serves a critical function for almost every business, and most major
business will make significant investments in community capabilities in Internet,
Extranet, and Intranet settings in the next two years.

Do you expect online communities will grow in
economic importance or decrease in economic importance over time?

Online communities are growing rapidly in economic
importance. New application-specific offerings are helping companies to tie community
applications in to their specific objectives and to more closely measure ROI.

As community applications become more sophisticated,
companies will find it even easier to recognize the huge benefits that community features
provide in market intelligence, customers support, and product innovation.

Major corporations, such as the consumer packaged goods
companies, spend tens of millions of dollars per year learning about their customers. Over
time, these companies will look to the web and community communication as a cost-effective
alternative to develop stronger customer relationships and gain new insights into customer
needs.

by Jim Cashel

As CEO of KOZ.com, Mike Moran oversees his
company’s efforts to bring online community services to a range of traditional media
outlets.  His comments on his firm and the future:

What is the core business of KOZ.com? How large
are you? How do
you make money?

KOZ.com now has the largest network of online media
affiliates in the U.S. And we’ve started branching out internationally. After the merger
with Internet Tradeline (ITI) is complete, we’ll have over 600 affiliates, including
newspapers, radio and television stations, cable and high-speed access, ISPs, and banks
and other businesses.

In terms of markets, KOZ.com, with Internet Tradeline,
is in most of the major markets and top-tier press, including the New York and LA Times,
Chicago Tribune and Sun Times, Dallas Morning News and Houston Chronicle, Miami Herald,
Orlando Sentinel, et al. According to the NAA’s recently released stats for 2000, the
"new KOZ.com" has relationships with half of the top 20 newspaper conglomerates
or companies.

In terms of employees, after the merger, we’ll have
around 130 KOZ.com employees based in Research Triangle Park and 65 based in New York
City. 30 employees are moving with ichat as part of the spin-off.

Which of your Network sites are particularly
successful? What are
the keys to successful online communities?

Several of our media affiliates have enjoyed noteworthy
success using our CPS (Community Publishing System) tools. Of particular note is our
newest affiliate, Citadel Communications, which is developing online presences for its
radio stations across the U.S. Citadel launched in early July and exceeded 1.3 million
page views in its first month. Two other affiliates that have done well recently include
elsalvador.com (El Diario de Hoy) and philly.com (Philadelphia Inquirer). Both had more
than a half million page views in July.

Interestingly, these success stories were made possible
by leveraging different strengths of our community tools and services, based on our
affiliates’ interests and the needs of their local markets. Citadel uses our new
professional services offering, Community Services, through which they can outsource the
implementation, roll-out and management of their online community to our in-house experts.
Elsalvador.com is taking advantage of our chat and discussion board technology to build a
robust online community. Philly.com uses the CPS calendar to keep visitors up-to-date on
local events.

Of course, online and offline promotion, staff-member
support, ecommerce and easy-to-use Web site tools help ensure that the sites flourish well
beyond the launch. We strive to provide the type and level of support appropriate to our
affiliates’ needs.

Can you name a couple of things that have
worked well and haven’t
worked well to date at KOZ.com?

We’ve followed a consistent business strategy for the
last 18 months or so and we think it’s working fine. I’ve always focused on revenue and on
developing a solid relationship with real-world communities, where people actually take
part in community activities such as shopping, athletics, family life and a host of other
shared activities. We’ve recently launched a network-wide advertising offering that
combines online advertising with print and broadcast spots, a "clicks and
mortar" type of approach to advertising and sponsorships. We’re quite excited by
those possibilities.

You work principally with local newspapers and
broadcasters. Some
pundits say that these are the very entities that will be forced into
extinction by the Internet. What is your experience?

It’s like the old Mark Twain joke about his death being
greatly exaggerated. Pundits have predicted the demise of newspapers and print with every
new invention since the telegraph. And yet newspapers are still here, while most of the
pundits probably are not. Newspapers are at the center of their community, where they
serve as the voice of their community. Community members often feel connected with their
favorite radio stations and DJs or with their local television news anchors in a similar
way. We’ve had success helping media organizations stay in touch with their readers or
audiences, in other words with their community members, and we intend to continue to help
them stay viable in the digital age.

At the same time, however, we appreciate the virtual
community ties that are typically forged through affinity. Our ichat product line fosters
those kinds of ties. Soon we’ll have network-wide chat capability so that members can find
a chat of interest and join it live, search for archived chats by subject matter, etc.
Some of the most recognized names of the dot-com world use ichat: Belief.net,
iVillage.com, MarthaStewart.com, wine.com and others.

Recently ichat was used during the GOP national
convention for chats with leading political figures. With minimal mediation, ordinary
citizens could chat with national leaders: that’s the power of the Net and the electronic
agora at work, as well as the essence of the grassroots politics that’s at the heart of
most local papers. Newspapers and broadcasters now can not only cover what goes on in city
hall and in Washington, they can bring together elected representatives with the people
they represent in moderated chats, use the chats as a springboard for future articles,
encourage further discussion and so on.

What major trends in online communities to you
expect in the next
several years?

As Net use becomes more mainstream, we expect to see
greater community formation online that reflects geographically based, offline
communities. We expect that our KOZ.com and ichat networks will grow in mass and depth
through 2001 and beyond.

We also expect that online communities will become more
commercialized, if that’s your perspective; or friendlier to ecommerce, which is closer to
where KOZ.com is coming from. Commerce follows community. Now that the online communities
have been created and are starting to sustain themselves, members will look for
conveniences and services to make their lives easier. When it’s easier to search through
online inventory for an item you want rather than spending time traipsing up and down
aisles in a store on your way home from work, why wouldn’t you want to do that? It follows
that more customization and profiling of spending habits and interests will be expected,
both on the merchant and customer sides of the equation. Community formation, therefore,
will become both more normalized and less open and free-flowing than it has been.

But online communities will always mirror the
complexities of the human spirit. We’re people who use computers to communicate, not the
reverse. At KOZ.com, we seek to enhance the online experience through our Community
Publishing System, marketplaces and chat — to foster and preserve the spontaneity we
enjoy in our everyday lives.

by Jim Cashel

Lynn Clater is Director of Community Development
at CNN Interactive.  In this role she directly oversees the complex interplay between
news and community.  Her views on her work and the future:

Can you tell me about the sort of community
offerings you provide at CNN? Their traffic?

The CNN Online Community is primarily text-based chat
and message boards. In terms of volume, the message boards remain the foundation of our
community activity. Our message board traffic averages about 150,000 page views per
non-breaking news weekday, with weekend traffic dropping slightly. When combined with
CNNSI.com board traffic, the message boards average slightly more than 1.5 million page
views per week.

On the chat side, we’re probably best known for our
high-profile guest chats, but we’ve also seen significant growth in the areas of program
chat connections and news focused topical chats this last year. We used to offer only one
program-related chat, TalkBack Live. Recently, our line-up has grown to seven regularly
scheduled chat connections to programs airing on CNN, two on CNNfn, one on CNN
International and one on CNNSI, with plans to expand.

My group also handles all incoming e-mail and user
feedback, which can number over 4,000 a week.

You’ve been with CNN.com from the start. Have
your views evolved about the best way to integrate community with a news site?

Even when CNN’s first community presence launched on
the CompuServe platform in August 1994, CNN embraced the notion that community should
promote the value of CNN’s brand as the world’s news leader. What better place for online
users to express their views and opinions about issues in the news than the source of that
news and information?

The core philosophy about online communities hasn’t
changed over the years, but what to do with it has. In the early days, with the exception
of the real-time connection between CNN’s TalkBack Live program and our one chat room, the
CNN community efforts were not well integrated into our content. However, as we began to
view the community as an editorial necessity rather than as an editorial extra, we found
ways to integrate access to community components into CNN’s content. Today, rather than
only seeking to integrate participation points into our content, we’re also seeking ways
to better feature user-generated content. This strategy is not limited to our Web site.
For example, CNN Newsstand requests e-mail questions from viewers about each program’s
topic, and a weekly CNNSI football special integrates real-time chat comments into the
programming format that airs on Sunday mornings.

Currently, my staff is charged with expanding our
success with message boards and chats into other pathways of interactivity between our
brands and our audience. My group no longer focuses exclusively on CNN.com but works
regularly with CNN on-air programming units and other CNN affiliate brand Web sites to
cultivate opportunities for community interaction and user-generated content integration.

News items can often be contentious, which
suggests you may have moderator challenges. What are your best strategies for maintaining
control on your message boards?

At this point, I can look back and see things I might
have approached differently had I known then what I know now. I’m convinced that the one
thing we did absolutely right from the beginning was taking a firm stand on preserving the
editorial integrity of the CNN brand.

On the message side, we have language filters and other
automated mechanisms in place to help us block inappropriate content. However, our
greatest asset in this area is human intervention. We have a large staff to ensure every
message posted on our boards is reviewed for appropriateness. If it’s on topic and civil,
it stays; if not, it goes. During breaking news coverage or high-interest stories,
messages are sometimes posted to our site faster than we can review them, which
occasionally results in situations where inappropriate content remains on the board longer
than we’d like. But once the offending material is discovered, we remove it.

Unlike other message communities, we generate all of
our discussions. Our message staff generates topics and keeps existing topics updated
extraordinarily well, and newcomers seldom complain that they can’t start a discussion.
The result is that we have a single, compelling, comprehensive discussion about a
particular topic rather than half a dozen discussions dancing around similar topics.

How do the community areas on CNN.com help the
bottom line?

The editorial relevance and sheer power of real-time
user interaction is more important than ever to CNN.com, which means I worry less than I
used to about the bottom line.

What do you expect to be the interplay between
community and news three years from now?

For CNN, the immediate challenge is to continue to
forge logical pathways of participation between our content and our consumers. If we
consider our current model, which provides pathways to community within the CNN content
areas as the tip of the iceberg, then the next logical step is to seamlessly embed
full-blown community interaction directly into the content and into the access devices
used to retrieve that content. It becomes more than just linking from content to
community; it becomes point of contact interaction with the content, no matter how that
content was accessed.

by Jim Cashel

Dean Daniels, President and COO of theglobe.com, has overseen during
his tenure signficant business model evolution, major stock swings, and ongoing management
transitions.  Through this period, theglobe.com has grown to be one of the largest
online community sites in existence.  His comments on his firm and the industry:

theglobe.com, like any good Internet company,
has evolved through different business models. What is your core model now? How do you
make money?

theglobe.com has actually always had the same mission
since its inception almost six years ago: to bring people together around shared topics of
interest through community. The considerable success of our community tools (globeclubs
and uPublish) and services has resulted in our business-to-business initiative of
distributing customized community solutions to partners in key verticals, thereby
aggregating desired users while reducing our marketing and customer acquisition costs.

We are currently distributing community to other
leading Web properties, including CBS SportsLine, RollingStone.com, Deja.com, and AOL/Time
Warner’s Road Runner, to name a few.

Additionally, we have honed in and acquired a core
community vertical – games information.  In the last two years we created the world’s
largest games information network for the loyal community of gamers through acquisitions
of leading games information sites <http://games.theglobe.com>
including Happy Puppy, Games Domain, Kids Domain, Console Domain, Computer Games Online,
Computer Games Magazine (an offline publications) and Chips & Bits (an ecommerce site
for gamers).

theglobe.com derives revenues primarily through
advertising and unique sponsorships crafted especially for each advertiser across
different properties. Advertisers are able to target niche audiences throughout our
network which provides us with the opportunity to attain higher CPMs.

Can you tell me a bit about theglobe.com’s
metrics? Page view and users across different sites?

We refer to Media Metrix figures to indicate trending
patterns. According to Media Metrix, we have the highest reach with games.theglobe.com as
the world’s largest games information network in the world, bigger than ZD Net’s GameSpot
or CNET’s GameCenter.

In addition, Media Metrix reported that theglobe.com’s
network audience growth grew more than 120% from March 1999-March 2000, outpacing
‘community sites’ like Xoom, Trip, FortuneCity and AngelFire that were actually decreasing
in growth.

The key metrics we focus on, which investors focus on
is revenue growth and our commitment to reducing our burn rate. The Company’s revenue
growth has been growing sequentially from quarter to quarter since theglobe.com went
public in November 1998. Our total revenues for 1999 were $18.6 million compared to $5.5
million in 1998.

Which online community sites do you admire?

AOL is doing an excellent job in building critical mass
in a wide range of audiences internationally. Yahoo! is generally not considered a
community site but I think they have realized the value of community given the
acquisitions they have been making over the past two years, buying components of community
(GeoCities, eGroups, etc.). theglobe.com on the other hand has always delivered the
complete community package.

You have an extensive background in television.
What is your expectation for convergence between TV and the Web? Any implications for
online communities?

Convergence actually happened the day that someone
moved their computer into the same room as the television. While I believe that
interactive television will play a part in our future development, interactivity via
broadband and wireless delivery will play a much larger role. Think of it…everywhere you
go, you can be connected to everything. As far as implications for online communities,
these developments will be huge.

What changes do you expect in the online
community space in the next three years?

More and better ways to connect, communicate and
express yourself over a multitude of devices to a vast audience of people like you. The
world will get smaller, smarter and more aware.