Talkway signs up 1st advertisers

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Talkway, a San Francisco start-up that wants to be the Yahoo! of Usenet newsgroups, has lined up its first advertisers--BarnesandNoble.com, N2K's Music Boulevard Logitech and the Colombian Coffee Federation--and is aiming for more this month.

The company, started by Stanford University grads Rich Simoni and Doug Panis, creates a new marketing platform that enhances Usenet discussion groups on the Internet and targets ads to users in those categories.

"Usenet has not been fully exploited," said Tom Chun, who is president of Talkway.

WHAT MAKES TALKWAY UNIQUE

While other Internet companies, such as America Online, online community GeoCities and Usenet search engine Deja News, also provide services related to discussion groups, Talkway is unique in that it lets users select Usenet groups, such as personal finance or sports cars, filter articles and rank content.

For example, users in a music group can rank articles they like on certain kinds of music, and the voting then appears beside each posting. Talkway is able to track the activity of its users, create psychographic profiles and target ads to those demographics.

Because of this high-level targeting, Talkway is able to charge $60 to $80 per thousand impressions. For example, Colombian Coffee will place banner ads in discussion groups on coffee, cooking and dining.

Now, Talkway is trying to sign up more advertisers, although it may face challenges.

SO WHAT'S A USENET?

"Whether it will be attractive to advertisers remains to be seen," said Chris Charron, an analyst with Forrester Research. "Trying to explain the Internet to advertisers is difficult enough, let alone what Usenet is. Advertisers want to know what they're getting."

Also, he said, "Because it's created by users, you're less sure of the context in which your ad appears," pointing to outdated postings and obscene language, as is often the case in Usenet discussion groups.

"I think advertisers are less enthusiastic [about] their ads appearing in user-created content than media-created content," Mr. Charron said.

In addition to advertising revenue, Talkway also makes money through electronic commerce partnerships, in which it is paid a commission on sales referred from its site. So far, it has partnered with BarnesandNoble.com, N2K's Music Boulevard and Cyberian Outpost.

For example, users in a jazz discussion group can click on a BarnesandNoble icon to go directly to jazz books on the BarnesandNoble.com site.

ADS VS. SUBSCRIPTIONS

Another potential challenge facing Talkway is that Usenet participants tend to be among the savviest Internet users, having been around since before the Web became a commercial vehicle, and many consider any form of advertising in discussion groups to be off-limits.

"You do have a few hard-core people," said Mr. Chun, referring to Usenet purists who oppose advertising.

However, he said, based on focus group testing by Talkway, "The majority of people feel the value-add is an enhancement, and they'd much rather see ads than see a subscription fee."

Copyright June 1998, Crain Communications Inc.

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