Certain kinds of small business are doing well on the Internet, such as bed and breakfasts, collectibles dealers, and custom manufacturers. Essentially, niche markets. Services and products that attract sophisticated customers, or can't economically be offered on a mass scale.
Other small businesses are out in the street playing with the big boys, and many of them will be stamped into the mud like Bambi facing Godzilla.
The first group, niche businesses, were able to put up a simple Website, often designed by the owner, and begin making money -- somewhat to their surprise. Many success stories were so startling that for a magical year or two, it seemed that "being listed on the search engines" would forever level the playing field between big and small business. Build it, and they came -- without a penny spent on advertising.
The second group has been less fortunate.
The hotel industry offers a prime example of Bambi on the Internet. There might not seem to be much difference between renting out a B&B room and a small hotel room. Actually there is a huge difference, because small hotels are up against the big hotel chains, which can afford technically sophisticated tactics to manipulate the search engines.
The tactics can be highly effective. Last week a search for budget hotels in Toronto, using the AltaVista search engine (www.altavista.com), presented me with the four-star Crowne Plaza as the number one choice.
It was hardly a coincidence; the Crowne Plaza uses the services of a Belgian company called www.hotelinfoplus.com, which is in the business of boosting the search engine rankings of luxury hotels. And they're good at it.
Of course nothing stays put in the rough-and-tumble of Internet business, no matter how skilled a company is at manipulating search engines. The search engine administrators are constantly on the lookout for businesses abusing the system. If a Toronto budget hotel complains to AltaVista, the Crowne Plaza could be bounced out of the budget hotel listings in hours.
In fact, the search engines are steadily improving in their ability to deliver relevant listings. Even the pornographers have been gradually brought under control in the last year, no mean feat. A year ago a search for Debbie Reynolds could produce a listing for Debbie Does Dallas. Today that rarely happens.
So where's the problem?
From a user's point of view, there may not be one. After all, search engines want to please users. In that quest, their current mantra is "relevance."
Unfortunately relevance is in the eye of the beholder, and from a small business point of view there is a huge danger. When a business is not among the top 20 or 30 listings in its category, Internet sales die. Though aggressive big businesses have been throwing their weight around, an even greater danger now comes from the search engine administrators themselves.
The search engine companies are not shy about this trend. Excite (www.excite.com) recently announced that it would "improve relevancy" by weighting the searches towards "more popular pages."
In their example, a search for "baseball" would give the user what Excite thinks the user really wants: today's baseball scores, provided by their media partners. Meanwhile a user looking for baseball cards will suffer -- as will the business trying to sell baseball memorabilia. The user probably won't die for lack of a card, but the business might die for lack of a thousand sales.
The effect of search engines manipulating their own listings is more dramatic in a search for information on "back pain." Basic search engines such as Canada.com (www.canada.com) and AltaVista Canada (www.altavista.ca) will produce information from medical doctors, yoga teachers, chiropractors, acupuncturists, homeopaths (and of course, quacks).
Search engines "tuned for relevance" such as Excite or the main AltaVista site will first offer the user information from what they consider the most reputable sources -- in this case, Western-trained medical doctors and hospitals. Chiropractors and acupuncturists need not apply.
In short, search engines are moving to favour the big battalions. Small businesses can get an occasional "cool link" listing from a search engine, but cool links are a mighty slender thread on which to support a business.
This issue of favouritism routinely surfaces in discussions at Web promotion bulletin boards such as www.deadlock.com or www.virtualpromote.com, where frenzied small business owners shriek, "Help! Why won't the search engines list me?"
One answer is that small businesses are often being squeezed out. On some of the more restrictive search engines, they aren't even being listed unless they are cool.
Yet surfing the search engines will reveal another prejudice, one which can favour small businesses. Search engine administrators and cataloguers like groups. Groups are official. Groups are legitimate.
The prejudice is hardly surprising. Though search engines' headquarters may be in Silicon Valley, they have become big business. Though their employees may sport purple-dyed hair and inline skates, they have gone corporate.
The conclusion is fairly clear: small businesses who are directly competing with the big boys on the Internet need to consider banding together, and creating high-quality group Web sites linking to all the members. Thus legitimised, they can press the search engines for preference in the listings.
This is not to say every small business on the Net needs to panic. A fish-packing company in Nanaimo selling smoked salmon over the Internet is unlikely to find itself locked in a death struggle with McCain Foods. The gourmet fishmongers of the world don't need to unite.
Yet acupuncturists do. Small hotels do. Travel agents do. Even a narrow niche like horror video dealers may -- thinking they are secure, they could easily wake up one morning to find an Internet category-killer such as Amazon.com selling horror videos. There are many warnings to small businesses from the pre-Net era. In both Canada and the U.S., small hardware stores banded together in buying co-operatives, got better prices from manufacturers, positioned themselves as the "full selection plus advice" stores, and survived the onslaught of Home Club and Home Depot discounters, who had limited advice and even more limited selection.
Independent bookstores faced a similar threat from chain superstores and discount clubs. Individualists all, they have been decimated by larger competitors.
The Internet is not the warm happy family it was two years ago. Money is being made, and the largest battle for retail dollars is being fought on the search engines. As the American founding father Benjamin Franklin advised his fellow revolutionaries, "Best we hang together, or we will all hang separately." The same may apply to small businesses on the Net.