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Web Lotto: It Ain't Pretty


Business Week e.biz -- Clicks & Misses

Web Lotto: It Ain't Pretty

Those online jackpots sites are so lame, they ought to be paying you to visit

Say what you want about the struggles of Internet advertising: Smart marketers know that for a buck, a Web surfer will sit, beg, and bark like a dog. So site operators have figured out that if they offer giveaways, contests, and games of chance--in short, a shot at a lot more than a buck--you'll sit still long enough to view lots of ads. Then they'll have lots of business.

Sweepstakes sites, which rely on million-dollar drawings to attract an audience, are the fastest-growing segment of the consumer Internet. Reports are popping up of how they're even becoming a threat to office productivity, so naturally I poached Business Week's time to see for myself. iWon.com, which otherwise is a portal like Yahoo! and Excite, gives away $10,000 a day, $1 million a month, and $10 million each Apr. 15. (The $10,000 is paid at once, the bigger prizes over 25 years.) It has seen its monthly audience jump to 6.9 million people in March from zero a year earlier, according to Media Metrix Inc. FreeLotto.com, a simple lottery-like site that offers $1 million prizes for those who pick the right numbers, has boosted its audience to 7.4 million monthly. That puts it 28th on the Web, just ahead of the search site GoTo.com, the travel site Travelocity, and iWon. From there, the audiences fall off. LuckySurf.com has a daily drawing for $1 million that lures 3.5 million visitors, and iWin.com, a game site tricked up with big giveaways, attracts about 3 million.

Why the mania for these contests? Lucky Surf calls itself a win-win business model because the sites give you incentives to watch the ads. To send the seven numbers you pick (from 50) in LuckySurf's daily drawing, you click on one of several ads and are taken to the advertiser's site, however briefly. At iWon, you get points for extra chances to win for each ad-bearing page you click on. The most points come from clicking pages that show you visit iWon often. Checking your iWon e-mail account is worth 10 points, because that e-mail can only be found at that site, so you'll probably come back looking for more mail. Clicking on the day's news is just 5 to 7 points, apparently because you can do that anywhere. To hear the marketers tell it, you win because you might be rewarded for sticking around. Advertisers win because they get you.

On the surface, it's smart business. You can see how iWon can justify spending $25 million a year on payouts to get 7 million monthly customers (and rising fast). Better to pay you than to buy more TV ads. And LuckySurf provides a pretty definitive answer to the problem of consumers ignoring online ads: no click, no contest entry.

To make sense over the long haul, though, the sites have to do more than bribe people for their attention: They have to be good at what they do. iWon's pitch is that it's as proficient as Yahoo and that the money is just frosting on the cake. By the same logic, FreeLotto and iWin ought to be as good as other game sites. The trouble is, not one of them is--at least not yet. The money--and the attention it commands--does no more than give them a window of opportunity to fix the problems I found.iWon: Make no mistake: iWon is no Yahoo. Web portals work by forging tons of partnerships so you can get the best of the Web all in one place. It takes time, and some discrimination, to assemble the best content and services. It's tough to give users something they can't get everywhere else, but the best do it. iWon is not yet at that level.

At Yahoo, a check on a typical weekday turns up links on the top news page to 16 news organizations, and the site repackages thousands of newspapers and magazines. At iWon, you can pretty much have any brand of news you want as long as you want Reuters. There's also a lot from CBSMarketwatch.com and CBSSportsline.com. (CBS Corp. owns stakes in iWon and both namesake sites.) In iWon's auto section, pretty much everything is from Autoweb.com, while at Excite there are at least five or six major partners. And in the all-important personal-finance section, iWon has a lot of the basic tools other portals have. But it has nowhere near the range of investment research of America Online Inc.'s personal-finance channel or the giant community Yahoo has generated for exchanging investing ideas.

It's not that iWon is a terribly weak portal. It's just that the market for portals is probably the best-served, most competitive on the Web. Over time, iWon will have to raise its game to match the leaders once the novelty of its giveaways wears off.iWin: It's hard to be even that nice about this gaming site. I was prepared to like iWin, but the goodwill wore out fast amid a flood of ads and a desert of creativity. iWin lists 44 games: Lycos Inc.'s Gamesville has 2,863 board games alone. And iWin lacked variety. Exhibit A: only four kids' games. (When I came back days later, the kids' section was gone. One of its math games, whose first question was "Blank divided by 2=1", was found under "Brain Busters." Speak for yourself, Bucko.) It had no strategy games; few, if any, board games; and nothing really fast-moving or eye-pleasing. Instead, it had six kinds of solitaire, seven trivia games, and at least 15 casino games such as cards and dice. Games like these have been bundled with new PCs forever, but without iWin's ubiquitous ads connecting you to offshore online casinos that offer similar games with a little money--yours, this time--on the table. Eventually, you see what this "free" contest site is really about.

And. The. Site. Is. Slow. It's disappointing enough that iWin gives you the same old games. At least they could make them fast enough to enjoy.FreeLotto: Ugh. It's designed to serve advertisers I wouldn't do business with for all the money in the $1 million daily pot. As at LuckySurf, you pick numbers and click on an ad for a chance to win. But the places FreeLotto sent me to! To a stock-offering prospectus for some company with no visible Wall Street backing. To get-rich-quick schemes. My favorite: the teaser for the "proven" cookie-cutter Internet business model. (Omigosh! There is one?) Only the most naive consumers work with such businesses. Building a site to promote them is just plain cynical.

The bottom line: You can win at these sites and some people value that enough to part with a few minutes. But the odds aren't great, and time is money, too. Just as Lotto usually isn't worth your money, sweepstakes sites usually aren't worth your time.By Timothy J. Mullaney, Tim_mullaney@ebiz.Businessweek.comReturn to top


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