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Northern business, shake hands with Google (12/05)

Let’s assume the web is here to stay. Is there any way to make it benefit the North? One way is to apply the Golden Rule of Google: link and be linked.
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Let’s assume the web is here to stay. Is there any way to make it benefit the North? One way is to apply the Golden Rule of Google: link and be linked.

Dave Robinson-editorial columnist-Northern Ontario Business
ROBINSON

Earlier this year, Karen Lacasse was named Exporter of the Year (East Region) at Northern Ontario Business’ annual Influential Women of Northern Ontario luncheon. In 2003, Lacasse Fine Wood Products was named Company of the Year (1-15 employees) at the Northern Ontario Business Awards (NOBA). It pulls in $150,000-$200,000 a year from the USA. Karen says

Earlier this year, Karen Lacasse was named Exporter of the Year (East Region) at Northern Ontario Business’ annual Influential Women of Northern Ontario luncheon. In 2003, Lacasse Fine Wood Products was named Company of the Year (1-15 employees) at the Northern Ontario Business Awards (NOBA). It pulls in $150,000-$200,000 a year from the USA.

Karen says that she gets almost all that export business through the web. Karen is proof that the web can benefit the North. Amazon.ca uses the web to suck money out of Northern Ontario, but Karen uses it to suck money in.

Karen visited me at Laurentian University to tell me how other Northern companies can use the web to build their export business.

The basic idea is to make a “sticky” Northern web. When a customer visits one Northern business, they should be passed from one to another until they decide to buy. It is actually a very old strategy. Families with several businesses always try to pass customers on to relatives.

The trick is to keep as much business in the family as possible. Members of immigrant groups often refer customers to businesses owned by people from the same background. By building up members of their own group, they indirectly help themselves.

Unfortunately, Northern businesspeople don’t seem to understand the principle. Very few northern companies make web links to others in the North. I am told they are afraid that other companies will steal their customers, steal their ideas, or steal their workers. These companies are ignoring the Golden Rule - they won’t do for others what they would like others to do for them. The North suffers because of these missing links.

To get business through the web, customers have to find you. In a recent survey, 93 per cent of respondents said they would use the Internet to research a business-to-business purchase decision. Sixty-four per cent of these would use a search engine. An amazing 83 per cent of those would choose Google as their first step. That means that jobs in Northern Ontario depend on how well Northern businesspeople understand Google.

Now, Google finds for sites by looking at the words in your site, but it ranks a site by counting the number of pages that are linked to it. In other words, when lots of other sites are connected to yours, your site will get more traffic because Google will put it near the top of the page. If 50 forest product companies in Thunder Bay are all linked to each other they would all go up in the Google ranking compared to the 50 companies in Sudbury that are not linked together. The Thunder Bay firms would get more U.S. business than the Sudbury firms.

For those of you who know a little game theory, the linking problem is a perfect example of the Prisoner’s Dilemma. The prisoner’s dilemma is the game that shows that you can have a bad result if everyone acts sensibly. In this case, everyone is better off if they all make links, but each individual is better off if the others make links and they don’t. As a result everyone in the North makes too few links and they all get less business.

There are tricks that help get around the problem. Experts call a site with lots of links to other sites a “hub.” A site with lots of links from other sites is called an “Authority.” Hubs are like the train stations of the web - they provide a path to many other sites. Authorities are more like experts. People are sent to authorities to get advice.

A sticky region of the web usually has both hubs and authorities.

If a group of Northern companies set up a special site that links to all of them it and if they all link to that site, then they get the benefit of a strong hub and an authority without having to link directly to each other. The Mining Supply and Services companies in the Sudbury Area provide a good example. They introduced an “authority” when they created the website for the Sudbury Area Mining Supply and Services Association. The SAMSSA site links to the web sites of every SAMSSA member. The organization works hard to attract potential customers that may jump on the sites of other members.

The web could bring customers to Northern Ontario but it will succeed only if northern businesses have a good web strategy. A really good strategy might mean cooperating to develop a set of hubs and authorities that will attract business for everyone.

Dave Robinson is a professor of economics at Laurentian University. He can be reached at drobinson@laurentian.ca .




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