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London-based site developers look to U.S. as Web yardstick

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Prices for building a Web site in London are in line with those charged by U.S. Web developers, according to this month's Web Price Index survey of developers there.

That finding is somewhat surprising, given that the market for Web services is less developed than in the U.S., say London-based executives.

London's median prices are slightly above the most recent U.S. medians for building a small- or medium-sized site and are slightly less expensive for a higher-end site.

However the median prices for London, arguably the leader among European cities in site development, are below New York and San Francisco, the top Web cities in the U.S.

Factors hampering growth

One thing is certain, all eyes in London are trained across the Atlantic.

"We use the U.S. as a yardstick for what is 18 months down the road," said Steve Bowbrick, chairman-CEO of London-based Webmedia.

A number of factors have hampered the growth of the Web industry in London.

One problem is a telecommunications issue.

"People pay for their telephone time -- local calls. That has quite a big impact on who uses the Web and how long they use it, how much surfing they do," points out Michael Crossman, managing director of Bates Interactive. "[Web sites] have to give a real value per visit."

Few big media sites

Web business has been slowed for marketers partially by a lack of big media sites on which to advertise.

Simon Anderson, director of new-media advertising at Saatchi & Saatchi, London, says, "The quality and quantity of sites is not as high as in the U.S. The investment by the publishing companies [in the U.K.] has not been as high."

New sites, such as the This is London site launched by the Associated Newspapers are starting to change that and give advertisers better, more U.K.-targeted outlets for their ads.

Shakeout on the way

Mr. Bowbrick sees 1998 as an important year for the developer industry in London.

Certain parallels for the London Web market can already be noted.

Developers are finding themselves pitching less to information technology staff and more to marketing directors or a combination of marketing and IT.

Proposals and requests for proposals are starting to become more savvy as well.

"We're up to about a 50/50 mix of really good briefs from [Business] school graduates with their heads screwed on right. And the other 50% are those kind of naive one-page briefs of the 'I think we need a Web site' type," Mr. Bowbrick says.

He also forecasts a shakeout coming similar to the one experienced in the U.S. in 1997.

"Our experience is that the market is very tight and that 1998 will be a make or break year for the industry as a whole," Mr. Bowbrick says.

Mr. Anderson is hesitant to call 1998 "do or die," but does say that the industry as a whole will continue to grow.

"A lot of people have put their toe in the water and I see that developing in the next year," he said.

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