Pathfinder readies for year two

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Time Inc.'s Web baby celebrates first b-day, full of ups and downs

It's been a year of both trailblazing and backpedaling for Pathfinder, Time Warner's grand experiment on the World Wide Web.

Since opening its cyberdoors on Oct. 24, 1994, Pathfinder, one of the first big publishing company Web sites, now boasts 100 full-time staffers, 32 advertisers and more than 25 content areas.

The site's traffic has grown along with the Web. Pathfinder logged 200,000 hits in its first week, rising to a current rate of more than 14 million per week. (In keeping with current Web parlance, Pathfinder now translates the latter figure to 3.2 million page views.)

But being on the Web hasn't been smooth sailing for Pathfinder (nor anyone, it should be said). Time Inc. has struggled with its long-term revenue model, which depends heavily on subscription fees from consumers.

A year ago, Time Inc. told Advertising Age that it expected Pathfinder to break even or turn a profit within its first year (AA, Oct. 24, 1994). It didn't happen.

"We're still in the investment period," said Bruce Judson, general manager of Time Inc. New Media. "We look at this as a venture that will move into the black quicker than more traditional media launches," which generally take three years or more to become profitable.

Mr. Judson wouldn't comment on Pathfinder's budget or when it will turn a profit, but industry observers estimate it's spending $10 million or more to get the service up and running.

By now, "we thought we'd be further along in terms of subscriptions and [consumer] perceptions of transaction safety on the Web," said Paul Sagan, senior VP at Time Inc. New Media and a member of the launch team.

Pathfinder has been blessed and cursed by its breadth and depth. The site features content related to nearly every Time Inc. magazine, as well as HBO Home Video, Warner Active and a shopping service called DreamShop. Pathfinder also has aggressively courted outsiders to provide content, most recently Reuters NewMedia.

The publisher is still working out the best way to present all that unwieldy content without alienating the consumer. The home page has changed several times, from a logo-heavy blast of Time Inc. brand names like Entertainment Weekly and Time to a more text-driven page that teases users with story tidbits and broadly themed content areas.

Year two will prove pivotal for the service's emerging brand identity. Outside the Web, most consumers still think of a Nissan car when they hear the word Pathfinder. And some agency executives say they have trouble determining what the Pathfinder brand stands for.

"To me, what they're missing is a brand," said Anthony Manson, senior VP-group director of new technologies at Young & Rubicam, New York. "At least [with] Yahoo I feel like I know what Yahoo's all about."

"Right now it's not vertical enough," said Steve Klein, managing partner-director of media services at Kirshenbaum Bond & Partners, New York. "The media brands that people gravitate to will be the ones that people use in the real world," such as CNN and ESPN, he said.

Time Inc. executives beg to differ, saying that over time the Pathfinder name propelled consumers and advertisers to the service.

"Originally I thought we would sell it as a portfolio of brands, but instead we're selling `Pathfinder,' " said Linda McCutcheon, director of ad sales and marketing for Time Inc. New Media.

Ad rates are $30,000 per quarter for full-gateway banner links, rates she describes as "simple and below market at the price point" for an audience that skews slightly older, slightly more female and slightly more affluent than the average Web site.

Most of the Web's big marketer names have bought into Pathfinder: Chrysler Corp., Ford Motor Co., American Honda Motor Co., AT&T, Sprint, MCI Communications Corp., Fidelity Investments and others have all bitten. On Ms. McCutcheon's wish list: travel advertisers.

Time Inc. is still discussing ad rates for next year. Also being mulled are ways to use the names and demographic information from the site's voluntary registrants.

On the content side are plans to develop tailored products for consumers, Mr. Sagan said, including experimenting with new delivery methods for selected content areas.

Pathfinder will charge consumers for access to portions of its site starting next year and is considering using both a subscription model and a newsstandlike, pay-as-you-go model, Mr. Judson said.

The site continues to add and enhance content, including a feature dubbed "Netly News," about the ins and outs of the Internet, due to launch next year.

Mr. Sagan said the architecture of the service is not set in stone. "We never said this is a finished product," he said. "It changes every day. Currently the broad model makes sense--we're not opposed to reassessing our model. That's the portfolio Time Warner has to offer."

And while most of its publishing brethren are months away from celebrating their first anniversary, Pathfinder is, in Web years, decades ahead. "A year ago most consumers had no idea what the Internet or World Wide Web was," Mr. Judson said. "Today you see all the online services both booming and providing access to the Internet . . . Then you say this is evolving as a consumer medium."

Debra Aho Williamson contributed to this story.

Copyright October 1995 Crain Communications Inc.

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