If Deja News and Talkway are right, there's a big new revenue opportunity in old communities. The two companies hope that by opening up the often-arcane world of Usenet groups to the Web, they'll be able to find profits where other community-builders have found only red ink.
"The hardest thing about creating an online community is building critical mass," says Rich Simoni, Talkway's vice president of technology. Next month, Talkway will launch a Web-based gateway to 15,000 of the most active Usenet groups, each of which has its own built-in constituency.
Deja News, based in Austin, Texas, was the first company to identify the commercial potential of colonizing the 20-year-old Usenet. It set up a searchable archive of Usenet posts in 1995 and has been adding features rapidly, including the ability to customize a view of Usenet, and, this week, spam-free email from WhoWhere.
But the niche that Talkway and Deja News have identified is a small one, and analysts aren't sure of its potential profitability.
"It's a fairly specialized space," observes Chris Charron at Forrester Research. "There's not room for that many players, and it's pretty dependent on advertising and commerce deals. But I do give both companies points for making Usenet easier to use."
Sunnyvale, California-based Talkway is optimistic about selling highly targeted ads around Usenet content for premium rates -- up to US$80 per 1,000 ad impressions. And it has signed commerce deals with companies like Barnes & Noble and Cyberian Outpost. Users of the Talkway service will see book recommendations, for example, that are tied to the topics of the groups they participate in.
Talkway offers Java and HTML versions of a newsreader that lets users easily participate in Usenet. (Talkway is still beta-testing its product.)
It's designed, according to marketing director Carlos Tribino, to be a sort of Usenet Yahoo, guiding users to a Seinfeld group, for example, without requiring them to know that the group's official name is alt.tv.seinfeld. From there, users can post messages, read messages posted by others, and even rate the posts they read.
With Talkway, you can label a post as "spam," "adult," "flame," or "thumbs up," to help guide fellow users. And Tribino points out that Talkway uses Usenet's native NNTP protocol, unlike Deja News, so posts show up faster on the system.
Deja News is enjoying its first-mover advantage, though. Marketing vice president David Wilson says his company has already attracted 4.5 million users, and plans to continue adding new features rapidly. Deja News also plans to add non-Usenet content to its database.
"You can expect us to pick up and aggregate more and more discussion sources," says Wilson. "Usenet is not going to be the only source of discussion to Deja News."
And he doesn't sound cowed by Talkway's imminent entry into his niche. "They will be some sort of competition," Wilson says dubiously, before scoffing at Talkway's mention of $80 cost-per-thousand ad rates: "That's really stretching the upper bounds." He added that Deja News would continue to rely on banner advertising for the bulk of its revenue, and expected to be profitable soon. Both Deja News and Talkway are privately held companies.
For its part, Talkway doesn't think it will be competing head-to-head with Deja News once it launches. "We see our service as different from Deja News," explains Tribino. "Talkway is about real-time participation, not searching Usenet. We have a great search tool, but it's only a means to an end. That end is to make it easy and friendly for people to participate in Usenet."
Charron at Forrester sees that as a noble goal. "As the Web audience becomes more diverse, in terms of technical expertise and background, they'll need a simpler interface to Usenet, and both of these companies provide that," he says.
But like all advertising-dependent companies, Charron expects Talkway and Deja News to stagger -- rather than stride -- toward profitability.
"I don't think opening up Usenet is going to be like striking gold," he says. "It's difficult to make money through advertising, and these companies will have to endure some red ink for a while." They'll also have to learn how to introduce ads and sponsorships to Usenet without offending the sensibilities of a traditionally anti-advertising populace.
Marc Smith, a sociologist at the University of California, Los Angeles who studies Usenet culture, says that Deja News and Talkway aren't the first companies to make Usenet more accessible. The biggest influx of new users, according to Smith, happened when America Online granted Usenet access to its subscriber base. "That was the biggest tsunami ever to hit Usenet," Smith says.
But he applauds the introduction of more sophisticated tools for searching and participating in Usenet. "Tools like this are great," Smith says. "Usenet would not go away without a Web front-end, but the merger of the Web and Usenet bodes well for both. The Web needs Usenet for content."
