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business news and analysis by Dylan Tweney
| 30 August 1999 | |
Deep linkingIT CAN ONLY HELP: I'm not the type to get giddy over mergers & acquisitions, but one happened last week that I was positively delighted to hear about. The Bank of America/Nationsbank conglomerate sold its car-loan subsidiary, CarFinance.com, to online mortgage broker E-Loan [1]. CarFinance.com, as longtime readers of my column will remember, is the customer service-challenged company that I spent several months struggling with back in June of 1998 [2]. I ran into persistent and frustrating miscommunications between CarFinance.com and the dealer from whom I was purchasing my car, and it took over a month to straighten that out and get the transaction closed. (In a followup column, I pointed out that much of the problem was due to the dealer's inability to handle an unusual loan, but CarFinance.com's customer service department didn't make the process any easier [3].) The story didn't end there, however. Once my loan had gone through, it disappeared into the bowels of NationsBank, which was so busy merging with Bank of America that it didn't send me a payment booklet for months, lost checks I had sent, and couldn't find any record of my loan when I called. After four months of this customer service nightmare -- and just when I was starting to hope that all records of my loan might have been lost for good -- they finally straightened things out. That's why I was so happy to hear that CarFinance.com would be getting out from under the bureaucratic deadweight of Bank of America / NationsBank. By moving into the fold of an e-commerce startup, there's at least a glimmer of hope that the company will now begin to deliver good customer experiences. In fact, I see hopeful signs of an online, service-oriented banking and finance revolution afoot. E-Loan is clearly looking to expand beyond mortgages and car loans, as a recent interview with CEO Chris Larsen suggested [4]. Silicon Valley hotshot Elon Musk is hard at work putting together a company called X.Com, which will offer a full menu of financial products to consumers -- all online [5]. And a recent debut, PayTrust.com, offers an intriguing service that lets you receive and pay all your bills through a single Web interface [6]. I just signed up for this service and will report on how well it works in a future column, after I've had a chance to test it. What's common to all these online startups is that they're addressing a huge customer service vacuum in the financial services industry. Sorting through paper bills, throwing out all the advertising, and paying by check? I'd rather go to the dentist. Waiting in line at the bank? Spare me. Filling out form after form just for the privilege of giving a lender my monthly interest payments? There's got to be an easier way -- and no doubt the Internet can help. Now, in auto financing, the dealers will always be a barrier to smooth online financing -- since dealers make money by handling financing themselves, there's always a disincentive for them to play ball with third party lenders. But there are many other financial product areas where online startups can compete effectively with banks. And to do so, their first job will be to make banking easier, simpler, and more pleasant for ordinary people. [1] Bank Of America To Swap Online Unit for E-Loan Stake [2] How I tried to finance my car purchase online and nearly went crazy [3] To
open the portal to big Web revenues, offer unique value [4] INTERVIEW- E-Loan CEO looks beyond online mortgage [5] Fast track [6] PayTrust OH, ALL RIGHT THEN Amazon proudly unveiled a feature they call "Purchase Circles" last week, which lets anyone see what the most popular books are in their town, county, state, or company. But then a crop of news articles came out pointing out how this might, just might, be infringing on some basic principles of privacy. Most of the concern centered around companies: Did they really want their competitors to know what their favorite books were? I thought it was a bit of a tempest in a teapot (who really *cares* what the most popular book at Apple Computer is), but Amazon responded in a surly way for the first few days, with spokespeople saying "It's a fun feature!" and not addressing the privacy issue. Naturally, this only added to the furor. Eventually, Amazon had to back down -- the Purchase Circles feature is now optional, and you can keep you purchasing data from being added to a circle if you so choose [7]. [7] Amazon alters purchasing data list policy FORGET TOYS, LET'S TRY SHOES Hot on the heels of its failed Toys-R-Us Internet commerce play, Benchmark Capital jumped right into a partnership with another big bricks-and-mortar retailer: Nordstrom [8,9]. The venture capital firm will pour $15 million into Nordstrom.com, with the retailer ponying up another $10 million to build what Nordstrom.com General Manager Bob Schwartz called "the world's biggest shoe store," at www.nordstromshoes.com. Of that $25 million budget, $17 million will go to an advertising campaign slated to begin this fall. That's what it takes to build a high-traffic destination site these days -- millions and millions in marketing dollars. Now, Nordstrom is no Net newbie, having already spent $200 million building an online and mail-order commerce infrastructure around its Web site, which launched in early 1998. That's why I give this partnership much better odds than the one with Toys-R-Us, which collapsed due to the toy company's inability to figure out the dynamics of Internet commerce and Internet culture. [8] Benchmark Finds a New Online Retail Partner [9] Nordstrom to spin off Internet subsidiary JUST DON'T CALL IT "SNAIL" MAIL Right around the time last week's issue went out, the Tweney Report got a nice recommendation from the folks who put together the Internet Tourbus, a useful and highly readable twice-weekly newsletter pointing out sites and lists of interest around the Internet [10]. The newsletter is especially good for people who are new to the Internet -- it's jargon free and friendly -- and goes out to over 90,000 readers. Thanks to that mention, the Tweney Report nearly doubled in size during the past week, to over 2,100 subscribers as of this mailing. One of the new subscribers was quick to take me to task for using the term "snail mail" in last week's issue, however [11]. A 26-year veteran of the U.S. Postal Service, this reader pointed out that the employees of the post office work hard to bring hard-copy mail, like greeting cards and packages, that just aren't the same online. What's more, the postal service is affordable by all, in contrast to e-mail, which requires a computer. True enough. For some things, like postcards, birthday cards, checks, and gifts, the postal service is just what I want. And small businesses around the world still use hard-copy mail for flyers, invoices, bills, brochures, and a hundred other instruments of communication with their customers and suppliers. The postal service isn't going away anytime soon, nor do I want it to. But I still prefer to use e-mail for much of my communication needs. For me, e-mail is still quicker, more useful, and easier to recycle than most of the stuff that comes in my physical mailbox each day. [10] The Internet Tourbus [11] The Tweney Report - Electronic Snail Mail NET
PROPHET: Ticketmaster: Put down that link or we'll sue If someone wants to link to your Web site, do you have the right to try to stop him or her? Ticketmaster thinks you do. ... click for more ... ~ Back issues ~Toy stories: Toys-R-Us proves "clicks and mortar" isn't so easy; electronic snail mail; technology no substitute for customer service (8.23.1999). Still waiting: WebVan problems continue; easy search with Searchbutton.com; learning to spell the new e-conomy (8.16.1999). What's in a name: General incompetence surrounding DNS; AOL steps up the pressure on Microsoft; Amazon.com and the Times settle; Webvan delivers logistics lessons (8.9.1999).
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