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Marketers spur next developer shakeout

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The mom-and-pop shops will probably continue to do brochure-type static sites for small businesses who want a Web presence The second shakeout of Web developers is looming, and it may mean bad news for the mom-and-pop shops as well as the generalists.

Unlike the first shakeout, which hit almost as soon as Web development became an industry, this round is being driven by marketers ready to take the next step in Web development.

In the first shakeout, many small developer businesses evaporated and the larger, more established shops turned to outside support through relationships with advertising agencies, such as New York-based Omnicom, or by finding other investors.

Certainly this has been true on the coastsÅ"the hubs of new mediaÅ"in New York and San Francisco.

First-round survivors

"Those companies that operated professionally made it," said Karin McDonald, engagement manager of San Francisco's Ikonic, pointing to shops that not only did good, creative work, but also delivered on time and provided good service for their customers.

That first shakeout was also seen in smaller markets. Craig Kronenberger, manager of Internet marketing for Pollak Levitt Chaiet Advertising, Atlanta, says many of the smaller Web shops in his city have disappeared.

"Currently, all the competition is coming from several large, full-service production facilities [TV, radio, multimedia], advertising agencies, groups of freelancers that network together on projects and companies in smaller cities or surrounding markets where competition was non-existent, allowing them to survive."

Ready for the next step

The next shakeout will likely occur over the next several months as marketers move beyond the first stages of their own Web development to re-examine their needs.

Already, many business-to-business marketers have secured their domains and carved out a niche for themselves on the Web. For some, it was a matter of just getting out there, while others wanted to beat their competition to the punch.

"We've got a starting place," says Mike Benson, who oversees the Web site for Safeguard Security Services, a San Antonio-based maker of bullet-proof fiberglass products. "We wanted to give [visitors to our site] an idea of what our product is and what it isn't."

Mr. Benson's company used a small, Dallas-based Web shop to build its site. Now that he's on the Web, however, he sees his needs changing and believes that "what [smaller developers] will need to do is keep up with the technology."

Already, marketers are looking to better integrate their sites into the business model. With an eye on the site generating sales leads, they're starting to redesign and build.

"They're putting the new coat of paint on their house, maybe even doing a skylight addition, not burning down the place in order to erect a GeoDome," says Ms. McDonald.

As a result, she says in this next phase the companies that survive will be the larger, more established Web shops that assume new roles, integrating not just with the information systems department, but with marketing, promotion and even research and development.

The rest of the industry, she predicts, will be smaller shops following the agency model -- "subsisting primarily on interactive marketing collateral, with mixed results: Ad banner design, flash screen design, minisite design. They focus on short-term value for their clients."

Freelancers or small shops that can label themselves as experts in a certain field, such as Internet Explorer 4.0, ActiveX or database implementation, will be able to carve out a niche and pick up a lot of contract work from larger Web shops and smaller agency-like ones.

Small opportunities

"They won't design large, complex sites on their own, but there's lots of talent in the free-lance and small-company community," says Barry Campbell, a Web developer for New York-based Summit Systems.

Meanwhile, some developers believe smaller shops will surviveÅ"by picking up smaller jobs. "The mom-and-pop shops will probably continue to do brochure-type static sites for small businesses who want a Web presence for the same reason that everyone wanted a fax number a few years back: The appearance of modernity," says Mr. Campbell.

Indeed, Melissa Bane, a senior analyst at Boston-based Yankee Group, says that while the high-end sites might get more complex, the majority of marketers won't be able to afford that kind of site.

In other words, Ms. Bane says, "Mom-and-pop stores can't afford the major developers."

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