Local portals gear up for online battle

Local portals gear up for online battle

Dotcom mania, established vehicle for business and
entertainment in the developed world, is now on the move here,
The Jakarta Post's contributor Rudy Madanir observes the trend.

JAKARTA (JP): In this wired world where millions are hooked to
the Internet, have you heard the story of a little boy who asks
his mother if she knows a cow that likes to play with computers?

Like the mother, most of us would shake our head. And the boy
chuckles and says: "Mom, it's the cow dotcom."

Oh yes, dotcom mania has begun to sweep our country. We now
have many local websites offering various kinds of goods and
services. Some celebrities have also opened personal homepages
(check out www.ruthsahanaya.com).

The number of Internet domains surged by nearly 80 percent
throughout 1999, reaching 4,685 sites in December from only 2,624
sites in January. And the number has surely soared higher within
the past few months.

The Internet, one of the greatest inventions of the
millennium, connects some 200 million people worldwide. And
serious computer viruses like the "ILOVEYOU" that took one tenth
of the world's mail servers down a few days ago do not discourage
them.

Despite the fact that the Internet bubble of investor
enthusiasm has burst in the U.S. as indicated by last month's
sharp drop in share prices, here in crisis-hit Indonesia people
are still busy attending the noisy launching parties of Internet
businesses.

Hosting an impressive party is just part of the off-line war
among the general portals, like the massive advertising campaign
conducted in all media types, from the large ad in various
newspapers and magazines to flashy street billboards to TV
shorts.

It was not a coincident when Detik.com and Astaga.com held
their launching parties on the same day in early February; though
fortunately not at the same place. Last month, their rival
Satunet Group responded by launching five websites with big
splashes in a national newspaper. One of the websites,
satuwanita.com, is dedicated to career women, with the horoscope
page as its main attraction. The group "threatened" to launch
another five websites in a couple of months.

They all compete to provide a portal with the best content
possible. However, the results of the online war are similar
facilities and content in each portal -- from news content and
chat rooms to entertainment, health, sports and attractions
designed to appeal to women.

They make claims like artillery barrages. One claims to
receive hundreds of thousands of page views or hits a day.
Another claims hundreds of thousands of registered users;
harmonizing with the bombastic daily growth rate of unique users
claim. Detik.com claims that they have grabbed about Rp 120
million from advertisers and expect to receive Rp 200 million a
month starting from June.

Overall, it seems to be a very prospective business. But so
many questions need to be answered -- future growth, source of
investment, the prospects for generating revenue when Indonesian
e-society is still in the infancy stage and the prospect of e-
commerce linked through portals. One frequently asked question in
the industry is whether there is a serious concern among the
start-up internet players in Indonesia about the expected fall of
the stocks of internet related companies, cynically called "the
burst of the babble".

"It's a good thing. Because good companies will survive and
bad ones won't," said Robert A. Eskapa, CEO of the Satunet group.

Jonathan Morris, CEO of Indonesia On Line, the parent company
of Astaga.com, shared the same view with Eskapa, adding that only
the top tier of each market will be successful.

"We are now viewed as the consolidator in the market, so if
there is a tough economic period, investors will see us as a
company that will end up consolidating the others and be the
survivor in Indonesia," he said confidently.

And it is obvious that the three internet portal companies are
eying the opportunity to be listed on the Jakarta Stock Exchange
with an Initial Public Offering (IPO).

So far, portal development has been helped by more than eager
investors such as Batavia investment for Astaga.com and Tech
Pacific of Hong Kong for Detik.com. Money has also been spent to
launch an aggressive brand awareness campaign. All of these
contribute to Indonesia's economic recovery, no matter how small.

A.B. Susanto, managing partner of a Jakarta consulting group,
supports the involvement of foreign investors in domestic
internet businesses to move the wheel of economics, but he
underlined that they should not just rely on the IPO. "They
should have a certain and clear revenue stream," he said.

The Indonesian Advertising Association has no figures on
online advertising yet, but Yusca Ismail, director of Perwanal
advertising agency believes it has a bright future.

"As the economy grows, it (online ads) will be a lucrative
market," he told The Jakarta Post.

He said that he has many clients who are interested in placing
their ads on the Internet, but they are still pondering the
effectiveness.

"The problem is that the users cover only a selected group of
people, and there is no tool (independent agency) to measure the
users' growth and the consumers' spending," he said.

Shopping

While investors put high hopes on the future of e-commerce,
they are facing the reality that it will take quite some time
before they can reap any profits because it's not easy to build
an e-culture.

Linda Mangunsong, who works at PT Sapora, an IT solutions
company, is not interested in online shopping. "I prefer to go to
the mall, where I can see and touch the items I want to buy.
Besides, shopping at the mall is quite relaxing for me."

Even the bank is not ready. Linda, one of the 1.5 million
Credit Card holders in the country, related that once she wanted
to pay her credit card bill online, but was told that the form,
which was available on the Internet, must be signed manually.

The Association of Indonesian Internet Service Providers said
that Indonesia's internet subscribers will reach around 200,000
with an estimated 1.5 million users this year, and the number of
users is projected to grow to almost two million next year.

International Data Corporation (IDC) estimated that the number
of Internet users in Indonesia making purchases through e-
commerce will grow from about 70,000 in 2000 to 600,000 in 2003.
It predicts that the personal computer population will be more
than two million units by then. PC sales have jumped from a mere
29,000 in the first quarter of 1999 to 85,000 units in the same
period of 2000. Unfortunately, today there are only six million
telephone lines for a population of over 200 million.

If you belong to the majority who do not have a PC or
telephone line at home or who cannot afford the Internet
connection, you can become part of the e-society by dropping in
at any Internet cafe in the country's big cities. Some white
collar workers are lucky as they can enjoy the facilities for
free in their office.

War

The market may be small at present, but the potential growth
of internet users will eventually boost e-commerce and revenues
from web ads, so, many businesses want to be on the supply side.
In the meantime, companies engaged in e-business, including the
three portals, have to struggle to be the fittest.

To attract loyal users, portals have invited noted columnists
to write for them, and their reporters are urged to provide the
fastest story possible. As a result, online media reporters are
among the aggressive ones in press conferences, reporting to the
desk even before Q and A sessions have begun, disturbing fellow
journalists in the conference. This rapid reporting can also put
accuracy at risk.

The three portals, used to tough battles with one another,
have to face competition from other tough players as well -- the
financial portal, IndoExchange, has been touted as the best
financial site in Asia. And do not expect other media giants like
Tempo and Kompas to keep silent during the war. Kompas, with many
readers of its online edition, recently launched its own webstore
and other steps seem to be in planning.

The war has just begun and it will obviously take time before
it ends. But victory will be decided by the users.