This well-regarded and influential book was the 24th overall best-selling book for Amazon.com for 1997, and for a time was its #1 best-selling business book. The Amazon.com page for this book, namely http://www.amazon.com/exec/obidos/ISBN%3D0553061720/cyberpos1998neteA/002-9704725-5638825, contains comments -- nearly all gushing, uninformative praise from "friendlies" -- and no fewer than 49 readers to date.

Evan Schwartz’s qualifications are a B.S. in Computer Science, experience writing for Business Week, Wired, The New York Times, and other outlets, a lively intuition, strong opinions, and good writing skills. The book is an expansion, written by popular demand, of his very popular article "Advertising Webonomics 101" in Wired, February 1996.

I considered making this one of your texts, but decided that it lacked the breadth and depth you needed for a serious course. For example, it is heavily preoccupied with marketing and consists mainly of the author’s personal opinions. However, you can read this book to good advantage now that you possess the requisite foundations. And it is a hugely fun book to read, with engaging material on almost every page.

The book consists of an introduction, a chapter on each of the nine "principles" (each with a nice summary at the end), a forgettable Epilogue, extensive endnotes, a nice appendix that collects all of the Web sites mentioned in the text into 29 categories, and a pretty good index.

The introductory chapter, which is available free in its entirety at http://www.businessweek.com/chapter/evanchap.htm, gives some essential background on the Web. Schwartz emphasizes that the Web’s economy is determined by the battle to command and sustain the attention of busy people. In particular, he believes in the importance of forging lasting relationships with consumers.

Below are the nine chapter titles, which are identical to the nine principles mentioned in the book’s subtitle, together with what I consider to be the main "meat" in each. In some cases, I offer my own comments. The principles are billed as "timeless strategies for conducting commerce on the World Wide Web." Underlining indicates hyperlinks that are active in the Web version of this document.

1. The Quantity of People Visiting Your Site is Less Important Than the Quality of Their Experience

• Schwartz contrasts the Playboy site, which has lots of visitors but amounts to an unabashed advertisement for the printed magazine, and Bianca’s Smut Shack, which provides a far higher quality experience to visitors and hence ought to be more successful over the long term. The Shack is the third most popular adult-oriented site after the Playboy and Penthouse, which speaks very well for its design considering the enormous advantages of its competition in terms of established brand. The main reason: the Shack provides a sense of community that the other sites don’t.
• "The name of the game for any content creator on the Web is to find a unique niche, then use the interactive features of the Web to cater to a very specific and loyal group of individuals. The actual size of the audience should be a secondary consideration." This advice is in perfect harmony with Tim O’Reilly’s view (week 5 reading), who adds that the Web may be gigantic, but only because it is the summation of lots and lots of niches.
• Schwartz richly praises the San Jose Mercury News (slated for class discussion) for its interactive delivery of a quality experience to users.
• Schwartz make the interesting comment that, when put on the Web, magazines and newspapers literally "deconstruct," that is, they break up into their constituent elements: "Instead of flipping through pages in a linear fashion, readers may pick and choose from menus of stories, look up stock quotes, search databases of classified ads, and have conversations with editors and other readers." The smart publications realize that the Web is a far richer and more interactive medium than print, are busy exploiting the new opportunities, and using their print editions to promote their Web sites. Business Week and the Wall Street Journal are cited as good examples. The right goal for on-line publications, he claims, is not to boost market share, but to boost "mindshare" among the most important customers -- that is, to boost the amount of time that such people spend interacting with a Web site’s brand name.
• Schwartz offers an extended appreciation of ESPN SportsZone as a site that not only attracts very large numbers of people, but also delivers a high-quality, interactive experience to a core group of consumers. Of course, he attributes the former to the latter. That is a path to financial success since advertisers will pay for access to such markets. For sites that choose not to adopt the Advertising Model (as we call it), "the invention of new value-added services offers the best path to profitability." For news and information sites, this includes "specialized delivery of knowledge, advice, or wisdom."
• In summary, Schwartz stresses that long-term success comes when a Web site offers something of unique value that causes people to return repeatedly; that it is important to build an "online community where people with similar interests want to congregate and interact"; that the Web is an inherently interactive, niche, and ultimately personal medium; and that on-line publications should focus on reinventing their paper publications to create "a participatory experience that builds on the relationship the overall brand has with its readers."

• This chapter is mainly about advertising. Schwartz doesn’t believe that the Web is very effective for burnishing a brand image with the masses; he believes that TV and print are much better for that. Just turning advertising brochures into Web sites is a formula for failure, for the Web is inherently a pull medium rather than a push one. Instead, Web ads should learn (interactively) about viewers’ preferences, provide service, and link to in-depth product information.
• The Prudential Securities Web site is cited as an example of service-based marketing. It was one of the first financial sites "in which existing customers could instantly look up their account balances, perform transactions on their portfolio, and send E-mail to their personal financial advisor -- and expect an answer." Don’t shout your message repeatedly in the faces of viewers as in mass marketing, Schwartz says, but identify and respond to viewers’ needs.
• Schwartz believes that most Web advertising should be reserved for sites that attract well qualified and interested consumers inclined toward visiting regularly, rather than be wasted on sites with more but less loyal visitors.
• Schwartz believes that the total dominance of mass-media advertising is diminishing for four reasons he calls "the Four Cs: clutter (too many ads coming at us), clicking (the ability to channel surf during commercials), cynicism (people no longer believe what the ads say), and competition (first from direct marketing and now from interactive media)."
• Schwartz asserts that there are four main ways to promote a marketing Web site: "by mentioning the address in print and TV ads, by garnering press attention, by trading ‘hyperlinks’ with other Web sites -- thus building ‘electronic word-of-mouth,’ and finally by purchasing banner placements of popular content sites."

• The more you know about a Web site’s viewers the better you will be able to serve them. But how to obtain information about viewers who, for the most part, don’t want to be bothered or who have privacy concerns? Something must be given in return for "registering" or answering some (demographic or psychographic) questions. That something could be a discount on products, access to non-free content, a service such as advice from a recommendation system on something of interest, or access to an on-line community.
• Schwartz recommends that Web sites take advantage of the information they collect about viewers to provide some tangible benefit that would not be possible without that information.
• Schwartz points out that collected information often has considerable commercial value, and believes that visitors ought to be told in advance whether it will be sold.
• Some specific sites discussed include Hotwired (launched in 1994, it was one of the first sites to grapple with how to compensate viewers for the data they were asked to disclose), Firefly (reportedly making 1/3 of its revenue from selling information on its’ members tastes, 1/3 from advertising, and 1/3 from licensing its proprietary software and agent technology), and Stolichnaya vodka (whose site offers each visitor the chance to design their own vodka-based drink and have it listed publicly along with their name).

• Notice that Schwartz did not say "digital products", but rather "information-rich products." Any product qualifies so long as there are sufficient opportunities to dispense facts, news, knowledge, wisdom, or advice about it.
• Schwartz points out that most cybermalls have failed or are failing because they are imitations of the real-life mall, which is based on the notions of good (and hence scarce) geographical location and the advantage of physical proximity as a lure to one-stop shoppers. But these notions lose much of their force on the Web owing to its inherent nature (e.g., geography is moot and browsers can switch to any other store as easily as they can switch to another store in the same cybermall).
• This chapter discusses Virtual Vineyards and Amazon.com at length as examples of sites that fully exploit the information-richness of their products.
• The chapter also discusses some successful sites that don’t seem to fit the title especially well, including: NetMarket, which makes nearly all its revenue by selling memberships to consumers who want to buy a vast array of merchandise directly from manufacturers; JCPenney, which has an on-line bridal registry and an aggressive program to use its rich customer account database on about 100 million customers to create a more personalized on-line shopping experience; and Peapod, a personalized grocery shopping service.

• Schwartz thinks self-service Web sites are popular because they offer convenience, give a feeling of control, and preclude most of the kinds of mistakes that clerks often make.
• Some of the sites featured in this chapter are: Federal Express, which offers a hugely successful on-line package tracking service; the U.S. Postal Service site, which offers a wide array of on-line services; Wells Fargo, the first bank to fully embrace banking on the Web; and the Internal Revenue Service, which runs one of the most popular government sites that is enabling it to cut thousands of customer service workers.
• There is extensive discussion of the Web’s impact on the travel industry.
• Schwartz points out that self-service is becoming mandatory in many industries as a competitive requirement. The Web is often an excellent medium in which to achieve it.

• Schwartz believes that there is a great future for corporate "value-based currencies" redeemable for real goods and services. An early example was frequent flyer miles, but by now many other industries have done something similar in an attempt to build customer loyalty. [According to the CEO of Hollywood Stock Exchange, who spoke at the spring 1998 offering of this course, their Hollywood Dollars will soon be convertible into frequent flyer miles, which amounts to making Hollywood Dollars a value-based currency.] Schwartz offers some original ideas of his own on how various specific companies could introduce value-based currencies.
• The Web is the perfect medium for people to manage their various value-based currency accounts; they will visit each one regularly to check their balance and find out what they can buy with their points. Note that this offers the sponsoring company a nice repeating opportunity to interact with its customers.
• Schwartz believes that the companies which will enjoy the greatest success with value-based currencies will be those that establish the strongest sense of trust with their consumers (because these "currencies" can expire or be revalued at the whim of their issuer).
• This chapter deals with most proposed electronic payment systems. Schwartz points out that most digital cash and micropayment schemes are not catching on very well. He believes that they just add an extra unneeded layer of complexity and cost, and are annoying to most people when so much of what is on the Web is free. Besides, most consumers lack the patience to mess with what are essentially new kinds of credit and debit cards when their existing cards can be used securely over the Web. Consumers are gradually becoming more comfortable using their cards over the Web, and this spells trouble for many electronic payment systems. Another source of trouble for digital cash schemes that preserve anonymity is merchant resistance; it is not in their best interests to adopt a payment medium that makes it difficult for them to establish a relationship with their customers.

• Schwartz argues that brand names matter even more on the Web than in real life because Webspace is coming to be even more crowded and cluttered than real space. Besides, the opportunities for fraud are even greater on the Web, where you can’t meet a merchant face to face and judge trustworthiness by the myriad of clues available in real life.
• Establishing a new brand name on the Web may be very difficult unless you are the first to do something. In any case, it is common to begin by giving your product or service away, and then exploit your new brand to generate revenue on related products or services. But don’t depend totally on advertising revenue, says Schwartz, because you’ll likely have to plow a good deal of that back into advertising your site so that you can maintain your appeal to advertisers.
• Schwartz points out that the power of brand names is so great that some companies are trading on their good names to sell products and services on the Web that have nothing to do with their main business. As examples, he gives Microsoft Expedia (travel agency), IBM’s World Avenue (cybermall), Intuit (life insurance), and AOL (advertising agency). IBM’s cybermall folded since the book was published.

• Schwartz says that the most dramatic advantage of doing business on the Web is global reach, especially for purely digital products and services. He offers quite a few dramatic examples. He also chides U.S. Webmasters for failing to support languages other than English in most cases. He gives the status of Internet penetration in other countries, and points out the inevitable growth of same, thereby giving access to huge markets that are all but virgin to most U.S. companies.
• There is an extensive discussion of Internet telephony, which of course is particularly cost-advantageous for international calls.
• I should point out that some other authorities question this principle. They point out that established companies with deep pockets can sometimes crush upstart Web competitors using a variety of competitive strategies and tactics.

• Schwartz offers Federal Express, Microsoft, and PointCast as good examples of how to adapt Web strategy to current events, which unfold with startling speed on the Web. Similar agility will be important for most companies doing business on the Web, he believes.
• He recommends that new Web services be tested on loyal customers before formal introduction.

Schwartz has created a Web site at www.webonomics.com that promotes his brand (himself) to past and future readers. This site contains information on himself, on the book, links to on-line versions of most articles he has written during the last few years (some of them of considerable interest), a cute 18-yes-no question webonomics questionnaire for Web site owners that will be graded automatically, a free quarterly newsletter, and more. The newsletter is worth browsing, since it comments often on current developments that relate to one or another of his principles. In it you will learn such things as:

• According to the 7 July 1997 issue of Barron’s, "not a single case of credit-card theft on the Net has been documented."
• AT&T has moved its TrueRewards program to the Net, creating a new example of what Schwartz calls "value-based currency". Another such example is AutoByTel’s new Mobalist program (redeemable for dollars off on a new car).
• Virtual Vineyards is getting only one or two CyberCash orders per week.
• AutoByTel is now facilitating about $1/2 billion worth of new car sales per month.
• Affiliate networks (think of Amazon’s program) "have been cropping up at a breath-taking rate, in almost every conceivable product category".