A pitched marketing battle will soon be shaping up in the Canadian online portal industry, where major corporate players like Bell Canada, Rogers Communications and Quebecor are jockeying furiously to become the preferred online destination for Canadian Web surfers, and control the leading gateway to Canada’s emerging e-commerce market.
Bell Canada, the current leader of the pack, is preparing to launch a major marketing initiative to promote its recent joint venture with Waltham, Mass.-based Lycos, which will see the unveiling of a revamped Canadian portal, called Sympatico-Lycos, on May 1.
Sympatico, which is already the most popular domestic Web site among Canadians, with approximately 2.4 million unique visitors in December, according to Media Metrix, will gain a number of Lycos-branded properties under the deal, including free e-mail, homepage building, shopping and personalized news.
Although Sympatico currently generates a relatively modest $17.5 million in annual advertising revenue, Bell Canada chairman and CEO Jean Monty recently said he expects the added traffic from the Lycos deal to boost the Web site’s revenue to as much as $100 million by the end of 2001.
The deal may not have been the Canadian version of the landmark AOL-Time Warner merger that was inked last month, but Internet analysts say Bell’s investment in the joint venture is a step in the right direction.
‘I think it’s a good first step that helps Sympatico enhance its lead, and get some outside content,’ explains George Karidis, an analyst with Brockville, Ont.-based Yankee Group. ‘[But] I think the real play here is how does [Bell] take what it develops with Lycos and turn it into a broadband service.’
Broadband, or high-capacity, high-speed access, is crucial to the success of both Bell and its chief rival, Rogers Communications, since it enables Internet surfers to access video-on-demand, telephone and other forms of rich online content that are driving mergers such as the one between AOL and Time Warner.
Rogers increased its high-speed Internet subscriber base by nearly 47,000 last week when it purchased Montreal-based cable giant Le Groupe Vidéotron in a deal estimated to be worth nearly $6 billion. The marriage will boost Rogers’ total high-speed user base to 232,700, substantially more than the 51,000 members who are signed up with Bell’s high-speed dial-up service.
And on March 1, Rogers will make its first foray into the portal business with the launch of
Excite.ca. The Web site, a 50-50 partnership between Rogers Media and U.S.-based Excite@Home, will offer original Canadian content from the Rogers Media division, which publishes titles such as Canadian Business and Chatelaine, as well as from a number of other partners, says Rogers spokesperson Jan Innes. The initial site will offer only narrowband service, although a broadband version is in the works.
But not every analyst feels that Canadian content will prove much of a draw to consumers.
‘The portal guys have not come anywhere close to figuring this out,’ says Jordan Worth, an analyst at International Data Corporation (Canada) in Toronto. ‘[Canadian content] hasn’t necessarily been the make or break scenario for any communications organization in this country that can rely on American content. The cable companies have made a history of that – basically what sells their services is the U.S. content.’
Quebecor-controlled Canoe, meanwhile, has also been busy enhancing its Web site with original branded properties, like its recently launched Lifewise site, and plans to announce a deal with a distribution provider later this month, says Rosanne Caron, vice-president, marketing and research, with Canoe. Canoe, which is part of Quebecor’s new media division, currently ranks fourth among the most popular Canadian Web sites, with just under 1.3 million unique visitors in December, according to Media Metrix.
But unlike Bell or Rogers, the portal has no way to actually get into Canadian homes. Any deal with an Internet Service Provider (ISP) would likely make Canoe the default home page for that service, thus increasing visitors to the site and consequently, ad dollars.
