The Best Companies Online: Web Business 50 Awards Overview

Among the footnotes to the year, 2001 will be remembered as the time the Internet lost its get-rich luster. Hundreds of dotcoms failed. Billions in venture capital vanished. And the prevailing wisdom that once said the Internet would radically change the business world has sobered with time. “Few innovations in recent business history have promised more but deliv-

ered less than e-business,” write authors Joel Kurtzman and Glenn Rifkin in Radical E: From GE to Enron?Lessons on How to Rule the Web. The companies and individuals that have succeeded on the Web aren’t necessarily those that jumped in first or developed the most novel strategies. Instead, many have focused on simplicity and on applying traditional business thinking to a new channel.

This return to reason makes the success of this year’s Web Business 50 winners all the more instructive. Despite the dotcom debacle, they show there are still organizations that are using the Web to improve business and create valuable services.

Excelling online isn’t easy (in retrospect, it never was). Now the uncertain economy adds to the challenge. So, unlike previous years when profitability wasn’t in the picture, we focused this year on tactics that give these sites staying power.

Consider Web Business 50 winner South-west Airlines. Southwest takes pride in the ease of use of its Web offering, which reflects its no-frills approach to business. Last year, the airline generated 31 percent of passenger revenues?or $1.7 billion?through Southwest.com. Not bad for a company that invested $5 million to launch the site and spends $21 million a year to maintain it. The airline industry has taken a devastating blow this year, but Southwest’s Internet strategy will no doubt give the company an advantage over its competitors.

Sites dedicated to customer service also rose to the top of our 288 Web Business 50 contenders. (We changed the name from Web Business 50/50 after deciding that the distinction between Internet and intranet sites had blurred.) The Atlanta-based American Cancer Society recently spent $7 million to redesign its site, Cancer.org?an effort that included sending six employees of Web consultancy Sapient to spend a week with cancer patients and their families. The result is a more personalized and interactive site for the nonprofit group that addresses specific questions and concerns of cancer patients. “It doesn’t matter what your tax status is,” says James Miller, ACS’s director of Internet strategy. “Customer expectations continually evolve, and you have to meet those expectations.” In order to improve its customer service, mail-order giant Lands’ End, another Web Business 50 winner, partnered with My Virtual Model, a Montreal-based software company whose virtual modeling engine gave Lands’ End visitors a chance to “try on” clothes without having to order them first.

Apply Business Basics

Many companies fail to apply basic business principles to online ventures, notes Senior Writer Steph-anie Overby in our story on vertical industries suited to Web business (see “Categorically Successful,” Page 62). Not so for Kingsport, Tenn.-based Eastman Chemical, which listened to its customers by monitoring its site activity and found that they wanted more technical information on the company’s 400 chemical, fiber and plastic products. In response, Eastman Chemical created online tools that help customers compare and select solvents.

Intranet winners this year also showed an increased awareness of the needs of their customers, in this case employees and company business partners. Ford’s intra-net, Myford.com, gives 175,000 employees access to personal information and company news, as well as more personalized data relating to each division. GE Capital Fleet Services invested $20 million in developing its intranet site, which in turn has helped the company move a large portion of its vehicle-ordering business to the Web.

This year’s list of Web Business 50 winners is by no means a definitive list of the world’s greatest websites. Online innovators such as Amazon.com, Dell and eBay would surely make the roster if it were. As in past years, the applicants were primarily self-nominated. This year, we also opened up the competition to nominations from our staff, who added first-time winners Google, Mary Kay and Washington State’s website, among others, to the mix. For a two-week period, our judges immersed themselves in their task, clicking on every link, debating design and comparing functions, customer service and navigation. To determine the winners, we relied on the following criteria: usefulness, ease of navigation, business value, survival prospects, design and credible content. We then closed ourselves in a conference room, and debated and lobbied each other for hours, finally settling on our list of 50 winning Internet and intranet sites.

Our varied list of winners ranges in style and mission from the National Center for Missing and Exploited Children, which helps parents search for lost children nationwide, to game site Shockwave.com. Throughout our judging discussions, we consistently returned to the theme of survival tactics and found that our winners, in their diversity, shared several more traditional business strategies for keeping their heads above water. Returnme.com, which returns lost items to their owners, formed a crucial partnership with FedEx instead of spending $100 million on a custom-built infrastructure. Similarly, Drugstore.com joined with General Nutrition Centers and RiteAid to boost customer trust and recognition and help it outlast Web competitors (see “The Right Fit,” Page 72). In addition to forming close partnerships to stay alive, some of our winners, including K2 and O’Reilly & Associates, are successfully promoting community on their websites in order to boost sales and increase customer loyalty (see “People Who Need People,” Page 80). And sites of companies such as Harrah’s Entertainment and The United States Mint are taking advantage of Web surfers’ love of games to keep them coming back (see “Play & Plug,” Page 88).

Through it all, our winners?though certainly not all profitable yet?are keeping an eye on the bottom line. Southwest.com, which has made money from the start, has helped the company continue to keep offering cheaper fares. Another Web Business 50 winner, Glasgow, Scotland-based Global Recycle?a trading platform for the recycling industry?controlled its costs even as it watched its competition overspend. For eLance, which helps freelancers and those seeking services find each other, making money has meant a round of layoffs last October and switching to a subscription model at the beginning of the year.

Given the ups and downs of the past year, do we have a better idea now of where the Internet’s future lies? Mohanbir Sawhney, who this month debuts his Net Gains column (see “Patterns of Progress,” Page 52), invites us to look at the history of other popular communication networks as a means of looking ahead. Newspapers, radios and TVs have challenged each other in succession but have ended up coexisting, Sawhney points out. The future of the Internet, he argues, won’t be radically different. Though not as flashy or society-transforming as we thought, the Internet isn’t going away. To glimpse its future, we need only look over our shoulder.