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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | AUGUST 24, 2000 SMART ANSWERS Of Web Links, Licensing, and Legal Pitfalls How you link to other Web sites will vary. For generating business or revenue, you'll need a contract
Q: Is it required to close a contract with a partner in order to link to their Web site from your own Web site? If not, and your visitors use this link, can you generate a profit? -- Tina Puglia, New York A: If you're motivated by the idea that your site's visitors would find good information at additional sites, you don't need a contract to include links to those sites on your Web page. "Netiquette" -- the art of polite dealing on the Internet -- would suggest that you inform the owners of the Web sites in question that you're linking to them, but it's not required. If you inform the site of the link, they should thank you for increasing traffic to their site, and you might start a dialogue that could result in a reciprocal arrangement and perhaps a profit-generating agreement between the two of you. However, if you're interested in making money by charging for click-throughs from a Web link or making a reciprocal link agreement with another site, you most certainly need a signed contract. This can take the form of a simple partnership agreement, a letter of intent, or a special Internet-affiliate agreement. "Unless you set up a specific agreement with them, you're not going to get any money from a link. You need an ironclad contract," says Jonathan Hirshon, whose Silicon Valley public relations firm, Horizon Communications, specializes in E-commerce. "Just pointing to a Web site is not a guarantee of getting profits." Most advertising link programs (sometimes called affiliate programs) not only provide a contract but also set up a special URL for you that keeps track of the click-throughs that are generated from your site. This is how you know how much money you're owed, the way statements are generated, and how checks are eventually cut to your company. A FEW WARNINGS. Some affiliate programs also provide simple templates for building your site or adding to it, says Annie Van Bebber, an E-commerce expert and CEO and founder of Dedication Channel Inc., a new Internet company. She recommends the affiliate programs at e-news.com, carepackages.com, giftcertificates.com, and utopiad.com for starters. When signing a contract with one of these sites or with a partner whose Web site attracts an audience that complements your own, look for a truly reciprocal agreement, where both parties are getting something from the deal. "I start with the offered program, but then I always try to go beyond the agreement that's online and try to get them to the next step so they become a partner with me, and we find ways to co-brand and build out something that's bigger for both of us," Van Bebber says. A few warnings about link agreements: Most of them last for a year, during which time a lot can change in the fast-paced E-commerce world. Van Bebber looks for a 30-day out-clause in a contract before she signs it. She's also sensitive to the linked banner ads that appear at the top of her page -- prime real estate on the Web. She watches out for companies with products that may compete with those of her other advertisers -- or with her own sales department. "Make sure you look at the bigger picture so you know your sales are protected," she says. LEGAL MORASS. Hirshon's concern about Web-site links relates to the evolving area of Internet law. Initial court rulings are leaning toward assigning liability to Web sites that link to sites found to be involved in criminal activity, he says. That means if your site includes a link to a site that is found to be, say, violating copyright or defrauding the public, your site could be named in a lawsuit and potentially found liable for endorsing the linked site. What if your site links to another site whose downloadable software program turns out to contain a virus that wipes out its users' hard drives? Because you're linked to the offending site, your company could get dragged into a legal morass. While the law has not been clearly defined in this arena yet, caution is the best practice, he says. "On my site, we put in a legal disclaimer that says we are not accepting responsibility for the content on a linked site or specifically endorsing the material on that site," Hirshon says. While the legal disclaimer hasn't been tested in court and may not hold up there, he feels more secure having it. Says Hirshon: "Anyone who wants to use the language we have posted is welcome to copy it for their site. Click on the 'scary legal verbiage' link at www.horizonpr.com. Have a question about running your business? Ask our small-business experts. Send us an E-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.  By Karen E. Klein  | | |
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