© 2003 UMFK. 1-1 internet business models The Five Forces of Portal Competition Tony Gauvin

© 2003 UMFK. 1-2 Porter’s 5 Forces of Competition Bargaining power of Buyers Intensity of rivalry Threat of substitutes Bargaining power of Suppliers Threat of new entry

© 2003 UMFK. 1-3 Bargaining Power of Buyers –Buyers Low switching costs Little product differentiation (must be free) Sticky services –Advertisers Portals is only one of many medias

© 2003 UMFK. 1-4 Intensity of Rivalry Fierce Rivalry due to consolidation threats Imitation is easy Assumption that only a few will survive Late comers spending Big Bucks –Disney, Microsoft, NBC Hugh market valuations determined by “reach”

© 2003 UMFK. 1-5 Threat of Substitutes Any other media –Newspaper, magazines, TV Vertical Portals Manual bypass (more savvy web users) 2 nd Generation broadband portals

© 2003 UMFK. 1-6 Bargaining Power of Suppliers High Salary employees Consolidation and branding of suppliers –News –Stock quotes –Personal content (horoscopes)

© 2003 UMFK. 1-7 Threat of new Entry Large sunken costs Marketing costs required for branding High cost of customer acquisition High cost of Talent Difficulty finding Partners and content providers