Three new portals threaten to heat up competition
Polish cyberspace got a little more crowded last week with the introduction of two new portals and the announcement of a third to be launched at the beginning of this week. But some of the biggest players were quick to dismiss the mounting competition.
"We are not afraid of competition," said Grzegorz Urban, spokesman for Optimus Pascal's Onet (www.onet.pl), the country's most popular Polish-language web site, which has 80 million-100 million page views per month. "Competition makes us do better work and create a better portal."
Internet Ventures Poland (IVP), a tech-oriented incubator a company that offers internet start-ups tech support as well as strategic advice launched its Arena (www.arena.pl) search engine last Wednesday. On the same day, Erada, an IT company that began operations this year, introduced Pilot Finansowy (www.pilot-f.pl), the country's first financial portal. Pilot Finansowy offers information on stocks and financial news as well as special electronic calculators with data about pension funds. TP Internet, the online arm of state telecom company Telekomunikacja Polska (TPSA), said last Thursday that it also would launch a financial portal (www.portal.pl) on May 1. TP Internet will incorporate news from the business daily Parkiet, in which it purchased a 33% stake last month.
Leading portals raised doubts about the potential of the new kids on the block, and about Arena in particular.
"(Arena) is just starting, but there are some obvious shortcomings that have to be improved in two to three weeks if not, they'll be a huge drawback," said Tomasz Basarabowicz, the advertising manager of Interia (www.interia.pl), the third most popular domestic search engine, owned by computer systems integrator ComArch. "I'm afraid if it doesn't equal the three to four (leading) portals (in quality), it will not be successful."
The main deficiency of the portal was a development gap of about six months between Arena and Interia, he said. However, he credited the newcomer for its more powerful Infoseek search engine software that Interia lacks.
Onet also was critical of Arena. "Arena is a search engine and nothing more," Urban said. He added that although both sites operate with the same Infoseek search engine, Onet's search capabilities are more extensive since its search function knows the different grammatical variations of Polish words and displays related material accordingly.
While IVP's site will compete directly with the major domestic search-engine portals, the Erada and TP Internet portals will likely find themselves competing with each other in addition to another financial portal to be launched later this year by media group Agora and computer software manufacturer Softbank. The date for the Agora-Softbank financial portal has yet to be announced.
But even though the competition has brushed off the online upstarts, they should keep a watchful eye on them, analysts said.
"Arena.pl has a good strategy and great potential to be among the top two or three (leading) portals," said Jacek Radziwilski, an IT analyst at Deutsche Bank. "Onet and Wirtualna Polska have the first-mover advantage, but (now) must work harder to keep their positions."
Radziwilski said Arena might have a good shot at sliding into the No. 3 slot behind Onet and Wirtualna Polska (www.wp.pl) because its staff includes some veterans of the internet industry. Two of IVP's co-founders are former employees of Wirtualna Polska, the internet subsidiary of software company Prokom. "If you don't have good people who know what to do, you won't be successful (with a portal)," Radziwilski said.
While the leading Polish search engines may have nothing to fear from the start-ups at the moment, competition will heat up by the end of the year once the new entrants have had time to enhance their online offerings and develop other services, analysts said. As a result, horizontal and vertical portals alike must incorporate electronic commerce functions to distinguish themselves online, they said.
In web terminology, horizontal portals, such as the Arena portal, are gateways to the internet that cut across a spectrum of topics. Vertical portals, such as Pilot Finansowy, are gateways that focus on one specific topic, such as health or personal finance.
"In the next three years, the dominant revenue from portals will come from e-commerce," said Radziwilski. He added that portals, and in particular financial portals, will need to allow their users to conduct transactions with local banks and brokerages as competition in this area grows.
Benita Mikolajewicz, an IT analyst at ING Barings, said that Pilot Finansowy eventually will have to sell financial services and act as an intermediary for transactions between users and financial institutions.
Pilot Finansowy will be ready to offer e-commerce in six to 10 months, according to Daniel Walas, Erada's director of public relations. He said he could not provide details of the service because the plans were still in the developmental stages.
Michal Ciesielski, the marketing director of IVP, said Arena plans to offer business-to-business electronic commerce but could not give specific details or a starting date since the project is still being developed.
But whether the new portals will actually implement e-commerce services now more of a trendy concept than a reality in Poland is another matter that may depend on how money-hungry the companies' owners are.
"It depends on the owners' appetites for earning and revenues," said Mikolajewicz, adding that many professionals worldwide, including Poland, have left lucrative internet concerns to start their own ventures in hopes of reaping a big profit. "If (the portals) probably provide just advertising, they will be able to earn something, but not a lot."
