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Chat up the worker bees at Microsoft's locally produced Web site and they'll tell you (in whispers) that every few months a wave of anxiety washes through their spare, open warehouse space in downtown Minneapolis.
Sometimes it's caused by dire predictions via the national media, such as occurred when a May article in Business Week reported that Microsoft's Sidewalk venture--which has evolved over the past two years in nine metro areas, including the Twin Cities--lost millions in fiscal year 1997.
Staff turnover, too, causes anxious rumors to fly. Within the past nine months, three supervisors who played key roles in Microsoft's Twin Cities launch have moved on, including executive producer David Fryxell and general manager Doug Henrich.
Even stories in the local media fray nerves: On July 13 Pioneer Press staff writer James Romenesko concluded that Sidewalk is "showing cracks." That Romenesko's newspaper hosts an online guide designed specifically to compete with the Sidewalk site still gives rise to righteous indignation among Microsoft employees; but his well-sourced analysis, which suggests customers and advertisers have been frustrated with Sidewalk's scattershot appeal, is hard to ignore. "Let's just say people keep their résumés polished," says one current staffer at Twin Cities Sidewalk.
Last week, though, Microsoft's 10 full-time and 11 temporary employees in Minneapolis had little time to spruce up their portfolios. They were too busy pulling up the curtain on twincities.sidewalk.msn.com--part of a nationally coordinated overhaul, unification, and expansion of the Sidewalk brand. As of October 21, users in metro areas who already had Sidewalk (residents of, say, Boston, Minneapolis, and Seattle) could still access tailor-made restaurant and entertainment listings. What's changed (and what Microsoft hopes will finally make Sidewalk a profitable venture) is that these same surfers can now access a fully loaded, highly interactive, state-of-the-art consumer guide.
According to an internal memo circulating among staffers at Microsoft, Sidewalk is now "bigger and better" than ever, mainly by way of offering visitors a Buyer's Guide which offers "objective, detailed information and useful advice on a wide variety of products and services," including home electronics, home appliances, and professional services. There's also a Yellow Pages to connect buyers to local businesses who offer said products or services; and a new home page that is not only the same in every host city, but is designed to load more quickly.
Sidewalk has also expanded its coverage. Residents in 63 additional cities can now access product and service information from the Buyer's Guide, get local restaurant reviews lifted from Zagat's nationally printed city guides, and download rudimentary information on local businesses thanks to the new Yellow Pages. These sites will not offer comprehensive, locally generated entertainment listings to compete with daily newspaper sites like those in Minneapolis and the eight other pre-existing Sidewalk sites, but there will be movie listings and short, nationally generated reviews.
What's more, according to Twin Cities Sidewalk's current general manager, Lisa Dinndorf, Sidewalk has added msn (Microsoft Network) to all of their Sidewalk URLs, signaling a coordinated effort between Sidewalk and Microsoft's other consumer-oriented online products, such as carpoint.msn.com (designed to aid auto shoppers) and expedia.msn.com (offering plane tickets and travel packages). "MSN is the third highest trafficked network in the world," Dinndorf says. "By marrying these sites together, and giving people the ability to move between them fluidly, we're giving consumers what our research tells us they want."
In effect, this move turns Sidewalk and other once-independent sites into a portal (a so-called home base) for Microsoft's larger online network (which also includes the newsy MSNBC and Web magazine Slate). Industry analysts believe the strategy marks a shift away from Microsoft's initial desire to compete directly with content-driven sites produced by local newspapers and other "traditional" media, such as the WCCO-sponsored Channel 4000. Instead, the Redmond-based computer giant seems intent on creating a kind of search engine for consumers. Bottom line: The more Microsoft can get consumers to think of using the Web to make individual purchasing decisions, the less they have to rely on a traditional advertising model--which now takes the form of slow-loading, low-yielding banner ads.
Michael Fibison, arts and entertainment editor at PioneerPlanet (the PiPress's companion Web site), says Sidewalk's new approach has convinced local competitors that another online paradigm is on the horizon: Instead of using "editorial" content to lure potential consumers, they're simply becoming a text-heavy Consumer Reportsknockoff, complete with a map to the nearest car dealer, real estate agent or record shop. "They have stepped out and done some things that will be tough for traditional newspapers to keep up with," Fibison says. "But they've also found that they're not as good at doing traditional media."
Rob Levine, a Minneapolis Web designer who helped create the clever, online critique of media Cursor (www.cursor.org), agrees that Microsoft is shifting into transactional gear, with consumers, not advertisers, as the primary source of revenue. And he believes the Minneapolis Sidewalk site, while not visually stunning, is doing a better job of giving users quick access to basic information. Still, Levine isn't sure the portal strategy makes sense in a medium where people are more likely to do a hard target search (that is, one with a single goal) than they are to meander from one Web page to the next.
"Sidewalk's early stuff was a joke. It was so cluttered. Now they've gone the other way. They've simplified things graphically," he says. "But if a main goal is to market products they already have"--Expedia, say--"they're going to have a hard time attracting an audience. People aren't going to come to a Microsoft site, because they can go to a different Microsoft site. If Sidewalk thinks they have something people want, they should let it live or die on its own. It seems like they're trying to capture that big 'S' word: Synergy. And that sounds good in the boardroom, but so far it hasn't worked on the Web."
In response to skeptics like Levine, Dinndorf and other execs at Microsoft simply reference the early numbers. Thousands of local advertisers and national promotional partners have already signed on with Sidewalk's new service, including the Twin Cities-based Northwest Airlines Corp., Visa U.S.A., and Wells Fargo Bank. Dinndorf says Microsoft has taken in $26 million for the nationwide product launch and has seen advertisers renew their annual contracts at a rate of over 60 percent. In the main, she says, their advertisers are more prone to consider online commerce and are excited about the chance to target consumers with product-specific listings and reviews. For instance, businesses can purchase different packages in the Yellow Pages section, which--depending on what they pay--can be souped up with bigger, bolder fonts and advanced graphics. They can even link shoppers to a separate home page.
Whether advertisers' newfound interest in Sidewalk will turn into long-term profit for Microsoft is anyone's guess. In the October 12 issue of Internet World, writer/analyst Nelson Wang hates to admit it, but concludes that Microsoft has "come up with an elegant model for attracting users, and thus advertisers." In the same week's issue of Editor & Publisher, in-house online analyst Peter Zollman believes the new service is trying to do too much, and predicts that it won't be long before sidewalk.msn proves itself a "useless flop."
This guessing game is nothing new to Jim Pounds, vice president and media director at Periscope Communications, a Minneapolis ad agency. He says a solid online-advertising model has yet to emerge. So while advertisers are keenly interested in the Web's marketing potential, they're spending less money on the medium than they were a year ago (in other words, the novelty has worn off). One reason behind this wait-and-see attitude is that there's no standard measurement of a Web site's performance. Some sites measure traffic based on the number of hits; some, such as Microsoft, prefer the term "unique visitors," each with a discrete user profile. And many, including the Star Tribune's online site, measure the number of pages users access per visit. "It's a fragile time," Pounds says. "Someone tells you they have 165,000 visitors a month, and what does that mean? Is that number flat? Is it exploding? I don't know. There's no way to know. It's too early to really tell." So while the analysts debate Sidewalk's utility, it will be a long time before there's a reliable methodology prospective advertisers can use to judge the reach of any Web site.
Meanwhile, Sidewalk's local employees plan to keep their references in order and surf the wave until they're thrown overboard or the waters calm. "It's funny," one says. "If this thing doesn't work, we're gone. But if this thing does really well, Microsoft might decide to focus primarily on the consumer guide and cut staff who were hired"--back in the olddays--"to write content for the entertainment guide."