How much is a team site worth?

You know that feeling you get when you get an idea, and you believe you’re onto something, but you’re just not sure EXACTLY how to implement it or when it will take off? That’s how I feel about our Web site. As we prepare to launch the Colts Fan Network, the first-of-its-kind, social network for NFL fans.

Looking ahead, I’m wondering how this project will be seen by sports marketing historians. Will it be seen as blip on the rader? Or as a step in the right direction, one of the forerunners of a system that eventually succeeds wildly?Or will it be an immediate success, bringing fame and fortune to all involved?

I wonder if Sergey Brin had these kinds of thoughts?

This weekend I’ve been re-reading “The Search,” by John Battelle in preparation for an upcoming Indianapolis Business Book Club meeting. ”The Search” tells the history of the search engine industry and how Google came to power. As I read it, I’m struck by the fact that, despite the wealth that has been accumulated by the likes of Google, none of these brilliant men had any idea what they were getting into!

The Yahoo boys just wanted to win a fantasy hoops league. Google’s partners were far more academic, seemingly not really trying to start a busienss at all. Then there was DEC. DEC already had a business, computer hardware, but it couldn’t grasp what it had in Alta Vista.

Battelle describes how the first really good search engine, Alta Vista, was actually invented inside DEC, before Google came on the scene. But Alta Vista never realized its commercial potential due to the culture inside DEC. It was held back from getting the funds and focus it needed because “search” wasn’t “hardware”, and hardware was DEC’s business. Eventually when it did get some room to grow, it was used as the focal point of a “portal” concept, but the dot-bomb came and blew up the IPO market.

The common thread in all these examples? When you’ve got something new on your hands, it’s difficult to know what it’s worth and even harder to actually REALIZE its full value, especially if the new idea requires that you “forget” what you already know. In the DEC example, Alta Vista might have made money for DEC if its managers could have stopped thinking like hardware guys. But that’s much easier said that done in the business world, espcially one as fast-changing and fiercely competitive as computer hardware.

It would have been easier for the Googles and Yahoos to maintain open minds since they were being created inside academic institutions, without the pressure of quaterly shareholder reports. Still, they didn’t figure out the way to make money from search until another company, Overture, showed them.

We humans tend to look around us for metaphors and models. We get an idea and we compare the concept to other stuff we’ve seen in the world. We put things in context. While this behavior is natural and necessary, it can prevent us from seeing possibilities that go beyond what we’ve seen before. And when a new idea challenges widely held beliefs, people tend to get pretty defensive of the old paradigm (just ask Galileo if you don’t believe me).

So what does this have to do with NFL team sites?

I believe that our Web site could be worth as much as $50 million on the street. That number sounds ludicrous to most people I know in the NFL. But based on our traffic and the loyalty of our audience, and based on reports I’ve read showing what such Web traffic might be worth to a potential suitor, it’s conceivable that investors might pay that much to own our site. Of course we’d never sell our site (although we’d probably license it), but that’s not the point. The point is that if the market would pay $50 million for colts.com, then maybe we could be doing more with it than we are currently doing.

But just like DEC, we need to break our industry paradigm in order to REALIZE what we have here. In fact, we may never realize the full potential for our team web site unless we stop thinking like a football team. This is not as easy at it sounds. Just like DEC, we’ve had success as a football team. Our management has been excellent. Few would question the notion that we’ve made the most of our revenue opportunities in a small NFL market.

But the Web site is an entirely different kind of animal. It isn’t limited by geography.

We see 1 million visitors every month, but only 25% come from Indiana. Our Web site has shown us our “long tail”. Now that we’ve been enlightened, how do we tap into that audience? What’s the business model? Sponsor driven? Subscription? E commerce? I’ve got my thoughts, which I’ll share in future posts. For now, I’ll take solice in the fact that smarter people than I (fill in any search name here) have wrestled this beast before and been pinned.

It’s so easy to look back now and wonder “how could all those smart people not see the opportunity? How could they not realize what they had?” On the other hand, these are some of the smartest people in the world. If they didn’t realize what they had, then I shouldn’t feel too bad about being confused myself.