Next month, the UK's first women's portal will celebrate its first birthday. For the publishers of Handbag and its peers-in-combat iCircle, Charlotte Street and Beme, the past 12 months have amounted to a costly and nerve-wracking experiment. Valuable lessons about this fledgling market have been learned, but huge cash piles have been used up, and there has already been one loser.
On top of the growing pains, the imminent arrival of two powerful US players into the UK later this year - iVillage, backed by Tesco, and Hearst-owned uk.women.com under the aegis of NatMags - has forced British publishers to reassess who their audience is and where their real revenue is coming from. E-commerce has not experienced the growth that was projected in the last year, and start-ups like the Ready2 network, founded by journalists Susannah Constantine and Trinny Woodall, have been forced to cut their operations back. The Americans, boasting five years of experience over their competitors, regard the British market as underdeveloped - in other words, it had better grow up fast.
The replacement of Charlotte Street's launch editor Nicola Davenport by Maria Trkulja, head of marketing at e-retailer Zoom, was the first sign that Associated News and Media's site was having an identity crisis. No one was surprised by the announcement last month that it was planning a complete overhaul of the brand (it has been lagging behind its competitors who all claim around 200,000 unique users a month). The interesting part was that it was being repositioned to a tighter "middle youth" niche of 29 to 45-year-olds, targeting Associated's more established readerships and drawing on You magazine, Femail and the Evening Standard for content.
There was palpable surprise, however, when Hilary Burden, Beme's very capable launch editor, was asked to go. Burden commented at the time: "We have all our advertising booked up and we are the envy of our competitors, but the lack of e-commerce will be the death of the women's portal." The appointment of a new commercial director, Sarah Fitzgerald, before a new editor, shows where IPC's priorities lie.
The lessons (which the analysts have been predicting for some time) are plain for all to see: women's portals have been too general in their offerings, failing to distinguish themselves sufficiently from each other and too slow to develop their commerce strategies. "Lack of clear commerce strategies is a big failure at the moment," says Rebecca Ulph of Forrester Research. "Publishing companies are used to thinking of advertising as their main revenue, but e-commerce is the only way forward."
Without online transactions, the current UK model, with overbearing editorial and marketing costs, is unsustainable. "It's still too early to tell whether UK women's portals will prove commercially successful - they've all had such limited lifespans," says Hilary Burden.
The invaders have timed their entry into the marketplace well, striking when the herd is turning and the weaklings are starting to reveal themselves. "They're getting to know the beast before attacking," says Burden.
So could the Americans beat the Brits on their own turf? "There is just no way that six generic sites could possibly survive side by side - only the fittest will survive," says Ulph, pointing to the US market where only two players (iVillage and Women.com) dominate the field. She suspects only two of the current UK players will survive. While Beme and Charlotte Street appear to be consolidating their audience in niche areas, Hollinger and Boots-backed Handbag (still the market leader with 200,000 unique users a month and 55% recognition) and iCircle are sticking belligerently to a "no change" policy and will be going head to head with the Americans.
The restructuring at Charlotte Street is not surrender but a case of adapt and survive, insists its management. Kevin Beatty, chief operating officer at Associated New Media, declares that they are "totally committed to this market as demonstrated by the significant resources and investment we are making in improving this part of our network."
Charlotte Street's main concerns are the same as its rivals. "The market up to this point has been immature," says Beatty. "Our challenge is to attract and retain the right audience in order that our women's portal becomes a powerful medium through which to advertise goods and services."
He dismisses rumours that You.co.uk will be replacing the beleaguered women's site, but confirms that they are planning a wholesale re-branding (they are consulting externally on the name), which will be targeting a woman of a "certain attitude": namely smart, at a professional level in her job, probably in a relationship, maybe with kids, who has "some knowledge of the web or is about to adopt it." The Charlotte Street site will be part of the new offering.
As for Beme - which has already firmly aligned itself with the 18 to 35-year-old market through its co-branding with the popular drama Ally McBeal - managing director Linda Lancaster-Gaye confirms: "It is too early to start defining the market, but we are getting more feedback from the users and from that we are developing our commercial strategy."
How big a threat do the Americans represent? In terms of groundbreaking creative editorial, the Brits don't have much to worry about, but in depth of content, services and tools, and sheer financial muscle the newcomers tower over them.
iVillage has 190,000 pages of editorial content, a virtual hypermarket of useful information, "expert" advice, discussion groups and community chat - everything from your son's acne to the price of Amazon shares - aggregated according to "life stage". It already has 160,000 registered users in this country, a base it hopes to build on with $18m (£12m) put aside by Tesco into the launch, with a further $25m for marketing. Women.com, which has a broadly similar offering, is notching up 7.6m unique users a month in the US.
The attitude of the newcomers seems sublimely confident but rather vague. uk.women.com, which calls itself a "destination site" not a portal, plans to become "a market leader". "We have an open-minded attitude: any way it's appropriate, any way it works. We have a good set of skills and have been around the block," says MD Lisa Riley. "We have a portfolio of magazine brands [at NatMags] to choose from and we will cherry pick the best." In terms of personality, there will be an "even tone" and "focused attitude", but she is not giving anything away.
In response to the stock criticism that cultural differences will present a serious barrier to entry, Riley says: "We are not going to foist the American content on this market, but we're using it to inform what works for audiences. The real reason for coming to us is that we are content rich." While the others are busy bolstering their commerce offering, uk.women "won't try to force shopping." With ready-made commerce partnerships, however, it won't have to try as hard.
Distancing itself from other portals, Handbag has started calling itself a "mass-market site" (the difference being that it commissions its own articles and produces content in-house) but it's a frivolous distinction. Market ing directorAlicen Stenner claims the Handbag formula is working. More tools are promised, more experts, more interaction and community, and no change to editorial policy.
iCircle likewise is sticking to its 25-35 target age range and "all inclusive voice" covering issues under subject headings, similar to the American prototype. MD Deborah Sherry believes the site's distribution via Freeserve, which enables the highest reach (1.9m compared to Handbag's 1.5m) and low marketing spend gives it the edge over Handbag, and confirms it will be "redoubling efforts" to improve e-commerce.
Beneath the veneer of corporate civility - "Handbag welcomes newcomers for the PR it brings us"; iCircle thinks "it makes the marketplace more exciting" - the Brits are battening down the hatches and preparing for battle.
The glittering prize is a sizeable chunk of the fastest-growing market on the internet. There are now around 5m women regularly using the internet and around 28% use it to shop (an increase of almost a third in a year). With women affecting most of the buying decisions in the household, the predictions for commerce in the future look very tempting indeed. "There is still an enormous opportunity because no one has got the magic formula right yet," says Ulph. "If the UK publishers don't get it right in the next few months they will be too late."
