Warning signs as CDNow goes into a dotcoma

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The Independent Online

It's hard to believe that CDNow, the grand-old-daddy of online retailing, is in trouble. Doom and gloom merchants are already writing its obituary - and some are going as far as to say that its troubles are a foreboding sign for the fate of other online retailers. The news is not good. CDNow is reported to have only enough money to keep it afloat until October, so drastic cost-cutting measures are having to be applied throughout the whole company. It's staggering to think that even such a giant could go into dotcoma.

CDNow has already been through several rounds of funding and with its share price in free-fall, it's difficult to see from where further investment could come. Unless, of course, it considered a buy-out. The only problem with this is the possibility of losing its carefully cultivated brand name, which, after years of battles with Music Boulevard before finally stumping up the cash to buy MBvd, has now become the dominant online music brand.

If anything should ever scare venture capitalists, then the situation with CDNow should. It's all very good crossing your fingers and investing in a dotcom with a five-year profit plan, but what if the company doesn't make it to its fifth birthday before the money dries up and the revenues are too pitiful to support the business?

The word recession springs to mind.

What's in a name?

Strange things are afoot in the marketplace right now. First we had food retailer Iceland adopting a very dubious rebranding strategy; where it decided to add "co.uk" to its brand and effectively rename itself Iceland.co.uk. Apparently, this is part of a campaign to show that it is an internet-focused brand.

Meanwhile, at the other end of the scale, Gameplay.com, dropped its dotcom and told everyone it just wanted to be known as Gameplay (except at weekends, when it likes to be called Mandy). Oddly enough, Freeserve is doing the opposite and is about to reinforce its dotcom status by running a new campaign, pushing the Freeserve.com brand. Strange goings on indeed.

Why so much fuss over a name, you ask? Because a strong, memorable brand could mean the difference between success and failure. People spend thousands and thousands on devising a name and designing the brand in the vain hope that it will have mass-market appeal and will bring them some form of success. Some are clumsy and pick a name, only to realise that someone else already has it and that all the URLs are already registered. Marbles, for example, is just one case that springs to mind, but there are others.

Going back to Gameplay and Iceland.co.uk, which of these diametrically opposed approaches is the better strategy? In the greater scheme of things it has to be Gameplay. As well as evening out a fluctuating share price, a dotcom-less Gameplay is a much more generic name that can open up new areas of business for a company that started out in life as just a games website. Why Iceland has decided its future lies with a superfluous and confusing dotcodotuk moniker beats me. Surely someone in the marketing department thought to question and veto the move?

It's peculiar that Iceland's founder and chairman, Malcolm Walker, denied that the initiative was just a cynical way of boosting the retailer's share price and then, in the same breath, pointed out that if the company was measured as dotcoms were measured, its internet division could be worth £500m. The City, funnily enough, wasn't too impressed and the shares dropped. Now Iceland.co.uk is stuck with the name, which will take 18 months to roll out to its 760 stores and cost the company a mere £8m, while Gameplay is advising others to drop the dotcom tag or face being pigeonholed. The only ones left smiling will be brand consultants.

Interactive TV rage

"Interactive TV is pants and the operators just want to piss people off." This was just one viewpoint I heard last week from someone working very closely with the different interactive TV operators.

I wholeheartedly agreed, because not only am I a frustrated journalist banging on about why the market is still waiting for decent interactive TV services, I am also a frustrated paying (Cable & Wireless) customer still waiting for the interactive TV services I was promised more than a month ago. I'm now told I have to wait until June, and that, yes, the glitches in the service will iron themselves out... eventually.

But if you thought that interactive TV would change the way people use TV, think again. Demos I've seen have not yet managed to convince me that people will find all the services useful, and most developers I speak to don't seem to be overly thrilled by the current incarnation of interactive TV.

While many sing and dance about its potential, most are restrained by clients with tunnel vision who are convinced that they need to have an interactive TV strategy but haven't the faintest idea why. These are the same clients who keep throwing the word "WAP" into conversations.

The sad thing about it all is that most clients these days are only interested in one thing - how to boost their kudos and their share price by going "interactive" with a "multi-platform" approach.

Armed with a budget of millions, most are happy going with the one with the biggest profile - Open - even if that means parting with, say, £3m for a three-year tenancy. It's got to the stage where Open is getting all the business because developers no longer advise clients that cable is the better option. The developers and, by extension, the market, have got bored of waiting. What they really want is for NTL to stop worrying about consolidation and to start worrying about how SkyDigital is managing to sign up so many new payTV subscribers.

Until that day, we are all going to have to endure this interactive-TV rage.

Tim Jackson, man in tights?

Talking of names, it seems that Tim Jackson (Mr QXL) wants to be known as "the Robin Hood of the internet" by backing NamePlanet, a company that will bring "democracy and sharing to the web".

But why stop there? Someone must be able to come up with something that can bring about world peace, or end poverty and famine. Jackson should be able to manage it, if the QXL share price continues to soar as it did last week.

amy@wagswell.co.uk

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