Keeper of the internet flame

21 Aug 2003

Few people in Ireland were as centrally involved in the late-Nineties internet boom as John O’Shea (pictured), appointed last month as new chairman of the Irish Internet Association (IIA). O’Shea was a founding member of the IIA in 1997 and managing director of Webfactory, an award-winning web design agency, when it was acquired in March 2000 by the then high-flying Horizon Technology Group in a cash and share deal worth €10m.

The acquisition, which followed Esat’s swoop for another big web design firm, Labyrinth, the previous November, was intended to broaden Horizon’s internet service offerings, while giving Webfactory access to an international audience. O’Shea shared the €3.7m upfront cash payment with founder Simon Walsh, fellow directors Ronan MacRuairi and Marcus Lynam and the firm’s 34 employees. The timing was sweet: the Nasdaq fell to Earth barely a month later, bursting the internet bubble.

O’Shea remained with Horizon for a couple of years before finally bailing out last year when he was offered the commercial director role with Zamano, a content provider to mobile network operators in the UK and Ireland.

Looking back on the madcap internet world of the late Nineties, O’Shea doesn’t try to pretend that he could see through it. “I’d love to say that I was standing back and saying it was all madness but I was totally caught up in it myself. I was the person going around to companies saying you’ve got to do this; you’ve got to invest money now or you’ll get left behind,” he admits.

He believes that while it would be wrong to downplay the impact of the internet which in many ways “has far exceeded the most bullish of expectations of a number of years ago”, the lack of stand-alone internet businesses is a disappointing outcome of the boom. “The internet is a passive medium requiring people to go to sites and to act upon what they see there. Unless you’ve got huge access to people’s mind via traditional media it won’t work; you need a mainline business that pulls people in or pushes people to a site. Bricks and clicks seems to be the winning formula; stand-alone isn’t enough.”

How then does he explain the fact that in the US there are several very successful pure-play internet companies, from Yahoo! to Ebay, Overture to Google? “These companies established themselves a few years ago in a very large and homogenous market,” he responds. “The Irish market is not big enough to sustain a company, so you have to grow outside the market, which requires a level of investment and expense that isn’t really available at this point in time for a lot of companies.”

Providing a greater level of support to these fledgling Irish internet businesses is one of O’Shea’s key priorities as new head of the IIA. “In the past we’ve undervalued ourselves by not making the most of the tremendous richness and diversity of information that we generate from events we run, the position papers we write and things like that.”

But he also wants to offer members more reasons to join the organisation in the first place. “You’ve got to understand the selfish motivations that people have when the come to our website and decide whether they want to pay membership or not. They’ll ask themselves what they can get out of it: can they save money or make money through the organisation.”

Offering practical benefits to members is one part of the IIA’s remit. The other is to be the voice of the industry by representing members’ interests. The IIA board is currently reviewing a wide range of topics with the aim of distilling them down into three key focus areas that will form the basis of its future policy platform. The plan is to unveil these three areas at the IIA annual conference at the end of September. The decision to concentrate on certain areas is a new departure for the IIA, which in the past has tended to offer guidance on a wide range of topics. O’Shea believes that the change in tactic will be welcomed by the membership, some of whom had been voicing concerns about the IIA’s “lack of depth” on certain issues.

To be seen as responsive to members is obviously important to the IIA, whose membership has fallen from 900 during the internet heyday to between 500 and 600 currently. While O’Shea is not predicting any further substantial falls in membership, he senses continued caution among the rank and file for whom any early frivolity about being web businesses has now been replaced by a gritty realism.

“Most people feel that though the bottom has been hit, we won’t see the exponential growth that we’ve seen in the past. Everyone’s working very, very hard. You really have to satisfy every customer wish and everything has to be so much better tested and thought through before it’s put up on the web. Companies are very reluctant to spend money so everything has to be justified. Everything is all ROI [return on investment] driven now. It always was. It’s just that we had an aberration for three or four years and it’s gone back to normal.”

By Brian Skelly