Closure the final words from a lost Tribe

THE future looks bleak for Australia’s once fashionable youth portal websites after Tribe Online closed its Perth office last week.

The JP Morgan and United Vintners & Distillers-backed company closed down its operations in Perth, Adelaide, Brisbane and Melbourne and moved full-time staff onto freelance contracts as the tightened it’s belt.

Tribe is the last man standing in the youth portal game. KGrind, RushTV, SpikeRadio and Scape have all shut their virtual doors in the last 12 months.

The Channel 10 and Village Roadshow-backed Scape closed in March after a whirlwind start-up and mass media campaign.

Tribe CEO Milt Barlow says the company will maintain the Perth website from their Sydney office with contributions coming from local writers. He says the restructuring has enabled Tribe to stay afloat.

“We run a pretty tight operation and we didn’t spend anywhere near the money other people were splashing around,” Mr Barlow said of Tribe’s competitors.

“The market world wide is pretty tough right now.”

According to Curtin University marketing lecturer Leyland Pitt, the youth portals are victims of expensive marketing campaigns, rapid cash-burn and a failure to capture the attention of the youth market.

“It’s unfortunate because you don’t have a physical location, you have to drive people to the website and the way most companies do that is by mass media campaigns which are very, very expensive,” Mr Pitt said. “The cost per customer to the site is huge.”

He said the large marketing spend was compounded by the low advertising revenues and the lower than expected site traffic.

“A lot of sites are not selling anything they can charge for and unless you can do that you’re not going to make any money out of it,” he said.

Tribe was kick-started by an initial $30 million investment from JP Morgan and UVD in January 2000, with another $17 million in late 2000 contributed by the same backers, well short of the expected $25 million.

The company has closed down its international offices in London and Los Angeles and is now focusing on content syndication.

“We are very focused on making sure that content can migrate to mobile phones, to television, interactive television and other websites,” Mr Barlow said.

“The future is no different to what it’s always been.”

The departure of Tribe from Perth leaves the City of Swan sponsored Leonard’s Couch as the only locally based portal.

The only other Perth site, Maxxmm in Nedlands, closed its doors last year.

In another blow, former Victorian Premier Jeff Kennett has stepped down as chairman from Tribe. He has cited involvement in another project as his reason for quitting, rather than the precarious position of the company.

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