INTRODUCTION
The word “portal” has been around for quite some time, but its use to describe a tool for electronic commerce has emerged only recently. This paper examines the definition of Web portals and a general method by which they might be classified. Literature related to the business model associated with horizontal portals is examined and synthesised to match revenue models with different types of horizontal portal content.
BACKGROUND
Costopoulou and Tambouris (2004, p. 136) suggest that a Web portal is an information gateway: “It attempts to address information overload through an Internet-based environment in which to search and access relevant information from disparate IT systems and the Internet using advanced search and indexing techniques.” From here on in this article, when we use “portal” we actually mean “Web portal.” More specific definitions ofportals sometimes define them as sites that offer “personalised content” to the user (Pearlson, 2001) or that offer a “broad range of services” rather than necessarily just redirecting users elsewhere (Zikmund & d’Amico, 2001). Some portals also offer services such as trading facilities (Internet.com, 1999). In fact, there are many authors that have considered the definition of a portal. Smith (2004, p. 94) considered 17 definitions of portal and classes of portal. He provides a definition of portal to distinguish it from other types of information systems: “… an infrastructure providing secure, customisable, personalisable, integrated access to dynamic content from a variety of sources, in a variety of source formats, wherever it is needed.” This seems to indicate that a Web site should meet a number of criteria before it can be considered to be a portal in Smith’s eyes. Van Brakel (2003, p. 593) appears to be in some agreement with this. He discusses a number of different portal definitions and comments that:
It is surprising how many times the term portal is being used to describe a static Web site environment. The corporate world is particularly at fault in this context: a well-designed and dedicated Web site that provides access to specialised resources or goods might be referred to as an information directory or information hub, but it is definitely not a portal with its current specialised functionalities. Simply affixing the word “My” to a system and adding a personal logon feature definitely does not metamorphose a static Web site into a portal…
An important notion behind the concept of a portal is that it often does not provide content itself, but organises content from other providers (Rao, 2001). This often occurs through the provision of some type of directory or search services.
Van Brakel (2003) also examines a number of definitions that require that a portal should add value for the user by providing more sophisticated information access features. He also adds that they should also specifically include customisation and personalisation features. In this context he describes personalisation as the ability to include personal information (such as a stock portfolio) or to subscribe to specific channel and/or alerts. Customisation provides the user with the ability to alter the look of the portal (for instance, by changing colours) depending upon personal preference.
An important concept behind the idea of a portal is the idea that it can be a “one stop shop” for users with either generic or specific information needs. Rao (2001, p. 325) defines portals as “those one-stop Web sites that try to satisfy most of an individual’s daily Web needs.” One of the major requirements of the one-stop shop is that content from disparate providers must be integrated into one point of access (Costopoulou & Tambouris, 2004).
Summarising, services that differentiate a portal from a “normal” Web site include
• personalised content, with a
• customisable interface, perhaps with some
• other added value services (such as online shopping), at
• a single port of call, in
• a secure environment.
Types of Portals
Van Brakel (2003) suggests that two broad categories of portals exist:
• Horizontal or Public Portals: Available to the general public or are for certain interest groups. They allow some level of customisation and personalisation. Sieber and Sabatier (2003) suggest that horizontal portals are generic organisers of information.
• Vertical (Corporate or Enterprise) Portals: Limited by certain authentication requirements, such as those reserved for employees of a company. We suggest that this definition shouldbe extended to include supply chain partners as members of industry portals. A feature of vertical portals is that they provide information for groups with specific interests (Sieber & Sabatier, 2003).
Rao (2001) suggests that there are three major categories of portals: horizontal, vertical, and corporate. This separates van Brakel’s vertical portals into two categories, internal (corporate) portals and vertical (industry-based) portals, which matches our “extension” of vertical portals fairly closely. In this article we are concentrating upon horizontal portals.
Services and Horizontal Portals
Costopoulou and Tambouris (2004) identify three major participants in the portal “industry,” customers (who obtain information and take advantage of consumer services to fulfil their needs), the portal operator, and suppliers (who provide the information and services to the customer via the portal).
Meisel and Sullivan (2000) suggest that there are several factors that contribute to creating a demand by Internet users for the services of a portal. These are
• Provision of a convenient and organised way for a user to access the Internet. This reduces the search costs that are incurred by the user (time and/or money).
• Along the same lines, the portal can filter out harmful information, or even information from less reliable sources.
• It can provide a means of assurance of the integrity of the sites they use for Web transactions.
• It can provide users with access to exclusive content and/or communications technologies.
• It can provide a one-stop shop, providing the gateway to the information that the user needs.
Successful implementation of these strategies can lead to revenue generation for the portal in a number of ways (Meisel & Sullivan, 2000). The business can also act as an ISP, or team up with one, and generate extra revenues through subscriptions. Revenue can be gained through onsite advertising. Of course, advertisers are likely to pay more if the number of users and level of “stickiness” is greater. Extra revenue can be made through commissions charged on e-commerce transactions carried out through the portal. This can be from charging the merchant and/or through fees per transaction.
Earlier on in this paper it was suggested that a portal needed to add value for the user by providing more information access features. Sieber and Sabatier (2003) suggest that value is added whenever the willingness to pay for the service being offered exceeds the (opportunity) cost of the provision of the service. They suggest that, in the horizontal portal industry, value is created by a reduction in transaction and search costs and the creation of new ways to customise information or services. They also provide advertising clients with the possibility of targeted advertising. A critical mass of users is vital for horizontal portal operators. They are facing significant challenges, as competition between them is intense; the cost to users of switching between horizontal portals is low (they can easily switch to other horizontal portals or, as their needs become specialised, switch to vertical portals), and technical changes to the portal (to upgrade facilities) must be managed carefully to avoid short-term loss of services, and subsequent loss of users (Sieber & Sabatier, 2003).
So how can horizontal portal owners survive? Sieber and Sabatier (2003) suggest that the following are strategies that existing horizontal portal operators can adopt:
• Develop and maintainbrand identity. This can be costly as quality television, radio, and magazine advertising time is expensive.
• Try to improve site “stickiness,” the amount of time users spend at the site. They can try to do this by profiling users (for customised services), changing content, providing local content, and improving their brand.
• Try to obtain exclusive content. This, of course, can be quite expensive, so the payoffs (say, through increased advertising or subscription) will have to be enough to justify the expense.
• Encourage “content” contribution by users by providing chat facilities or other forums.
• Bundle products by, for instance, linking e-mail services with information provision facilities.
• Become, or link up with, an Internet service provider (ISP). A form of “lock-in” occurs where users of the ISP automatically are channelled through the portal.
Content
In the end, the content and/or services provided by the model must match the revenue model that the portal operator has selected. We have already briefly discussed the content that can be provided by a portal. Costopoulou and Tambouris (2004) classify this into two categories, information and e-services (which are online services that enable users to perform transactions and processes online). We would suggest that this includes features such as chat, e-mail, and so forth.
Rao (2001) classifies these differently, and suggests that portals offer a core set of functions, involving the four “C”s:
• Connection: To the Internet through search engines, and so forth.
• Content: Such as news.
• Commerce: Such as access to electronic shopping.
• Community: Provision of tools to define a community of interest and the means for them to communicate with each other.
Sieber and Sabatier (2003) suggest that a “good” (horizontal) portal will allow users to personalise and organise information. They point out that other services that have been added to horizontal portals include communication, entertainment, online communities, and customised news.
MATCHING CONTENT TO REVENUE SOURCE
When matching content to revenue sources, it is sensible to commence with the revenue sources as outlined by Meisel and Sullivan (2000). These are advertising revenue (which relies on the site’s stickiness), e-commerce transactions, and extra subscriptions through the provision of exclusive content or bundled services. When matching the revenue sources to the revenue model, the provider should consider the “added value” that canbe given by the provision of directory or search services to lower user search costs and improve stickiness. It should also be noted that e-commerce facilities provide the user with the option of comparison or convenience shopping. As stated earlier, Costopoulou and Tambouris (2004) have classified portal content into information and e-services; we suggest adding “online advertising” to this (as it can be viewed by customers of the portal). It is also possible to add a number of “eServices” to Rao’s (2001) list to allow for the addition of entertainment services (to improve stickiness), the ability to customise a portal, and bundled services (such as an ISP service). These can then be matched through to the more specific “portal tasks” (or content) as identified by Rao. For instance, online games come under the category of entertainment, with the aim of them being to improve stickiness on the portal, and hopefully increase advertising revenue. In other words, various types of content can be used as a means to identify a revenue model and match it to specific items on the portal, or vice versa.
FUTURE TRENDS
As technologies allow for more improved profiling to occur, it is reasonable to assume that businesses operating portals will be better placed to refine their services more specifically to users (improved personalisation), and more accurately target their advertising. Newer services, such as widgets (now available, for instance, on Yahoo’s Web site), will allow businesses to offer their personalised, customisable content and services in newer forms, perhaps even avoiding the traditional Web browser in content delivery. As with other decisions, the service provider will need to consider whether the added value of such a service will mean that the user will be attracted by the uniqueness it offers.
CONCLUSION
The topic of portals is a large, complex, and evolving one, and any categorisation or portals must, of necessity, also evolve with time. In this article we have explored the concept of a Web portal and various attempts at categorising portals. We have examined literature related to the link between horizontal portals revenue models and the content they have on the portal, and suggested some strategies that operators might wish to consider when attempting to decide upon appropriate portal content.
KEY TERMS
Horizontal or Public Portals: Available to the general public or are for certain interest groups. They allow some level of customisation and personalisation.
Portal: A Web site that includes personalised content, with a customisable interface, perhaps with some other added value services (such as online shopping), at a single port of call, in a secure environment.
Portal Revenue Generation: Occurs in a number of ways. The operating business can act as an ISP or team up with one and generate revenues through portal subscriptions. Revenue can be gained through onsite advertising. Revenue can also be gained through commissions charged on e-commerce transactions carried out through the portal. This can be from charging the merchant and/or through fees per transaction (Meisel & Sullivan, 2000).
Value Added in a Portal: Value is added in a portal from a customer viewpoint whenever the willingness to pay for the service being offered exceeds the (opportunity) cost of the provision of the service. Sieber and Sabatier (2003) suggest that in the horizontal portal industry, that value is created by a reduction in transaction and search costs and the creation of new ways to customise information or services.
Vertical (Corporate or Enterprise) Portals: Limited by certain authentication requirements, such as those reserved for employees of a company. We suggest that this definition should be extended to include supply-chain partners as members of industry portals.
