State of the Web: The Cheapest Moment Ever

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When we first started TheStreet.com, I used to say to skeptics that the moment we began would be the cheapest moment ever to brand a new enterprise on the Web and that it would only get more expensive as time went on.

Like everything else about the Web, that was true for a couple of years, but now just seems plain stupid because if you wanted to start a Web operation now and do some branding, it would cost you almost nothing. Here's why: First of, all online advertising has gone from costing a fortune to being the cheapest medium out there. It has become the cheapest branding medium because agencies only consider it a "direct response" medium. They don't think you can "brand" something on the Web. Of course, you know how ridiculous I think that is. If you're staring at a site all day and you trust the site and consider it valuable, some of that value is going to rub off on the advertisers. I know this because I am constantly asked about our advertisers in correspondence with you.

Nevertheless, many ad agencies regard the Web as just a way to acquire clients through the complicated filling out of forms online. What a classic mistake. If you want your brand to be seen by a rich demographic of people who are in a position to do buying and selling of big ticket items -- even if they aren't about to do it at that moment because they are at work and it would be irresponsible -- the Web is the perfect venue to advertise.

Unfortunately, in a fit of insanity, Tim Koogle, the once-powerful head of Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks), came out and said that you can't brand on the Web. What a stupid and totally wrong comment! Maybe there's no branding on Yahoo! because it's such a commodity-cluttered site, but I know too many companies that have been able to brand successfully to put the lie to Koogle's mindless rap. Perhaps that's what happens after you see your market cap shrink to near your cash position, although it sure didn't happen to me.

Anyway, because of inane comments by people who should know better, coupled with an overpromised and underdelivered set of statements by people at major Web agencies, we have created an anomaly where you can create a new brand for next to nothing on the Web.

And what a great time because everything else about the Web has gotten cheap, too. We now know that you don't have to buy those expensive Sun(SUNW Quote - Cramer on SUNW - Stock Picks) machines that lock you into all sorts of high costs. You can buy stripped-down Unix machines from Intel(INTC Quote - Cramer on INTC - Stock Picks) and do much better. You don't have to pay Exodus(EXDS Quote - Cramer on EXDS - Stock Picks) an arm and a leg anymore for hosting, and you don't have to pay a fortune for back-up hosting any more either, as we did at one time.

The commerce systems still leave something to be desired -- there are not enough paid sites on the Web to be able to buy an off-the-shelf commerce system that works well, but we are getting there. The software that shows you where people come from and go to doesn't cost much anymore either, and I'm sure that I could get an off-the-shelf publishing system that's 10 times better than the proprietary one we used when we started.

People now have much faster lines, which allows you to do much cooler advertising that actually can work if you put your mind to it. And talent no longer costs an arm and a leg. You can get laid-off folks from Scient(SCNT Quote - Cramer on SCNT - Stock Picks) and MarchFirst(MRCH Quote - Cramer on MRCH - Stock Picks) to design anything you want.

So why isn't anyone taking advantage of the Web in this manner? Why doesn't someone buy up all of the independent Web sites for next to nothing and start a publishing empire? Why don't publishing houses see the steal that the Web has become? Why don't the networks solidify their cross-platform opportunities right now and stake out the Web as a good method to build revenue, especially when you can now charge for things? Simple: The Web is a huge embarrassment right now. Nobody wants to talk about it or think about it. You don't even want to be affiliated with it. It's as cold as it was hot a few years ago.

Nobody who has a Web company has any currency that can do anything with it or that anyone wants. Nobody has enough cash to do anything substantive and the advertising recession had made the possibility of launching something on the Web seem farcical, at best.

What a shame. I sure wish I were starting TheStreet.com now rather than in 1996. We could get good people in tech and editorial at relatively low cost and we have learned so much in the interim that I think we could be profitable in no time flat.

But nobody wants to hear about that now. Nobody has even six months' worth of patience when it comes to the Web.

What an incredible lost opportunity, to create a new entity for next to nothing, brand it for next to nothing, and then be ready for the economic upturn that will no doubt start in the fourth quarter of this year.

Maybe someone will see the Web for what it is right now -- an important part of the puzzle of how to reach people -- and realize that the time is very right to start something. The clutter couldn't be more toned down. The market opportunity couldn't be bigger.

I guess that's what it looks like at the bottom.