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A Desert Island: 1

A Desert Island: 1

March 24, 2005
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" Like adult on the Internet, gaming in Las Vegas has been elevated by its most elite practitioners to the zenith of profitability. "

In 1835 Charles Darwin visited a tiny cluster of moss-covered islands in the middle of the Pacific Ocean. They were later named the Galapagos, after the giant land tortoises once abundant there.

At just 21, Darwin could scarcely have guessed the enormity of the idea his observations on these unique islands would inspire.

Later generations of zoologists have come to understand that evolution through natural selection had expressed itself on the Galapagos like no place else on Earth. Geographic isolation and a unique combination of weather and ocean forces created an environment where animals could evolve and take advantage of the many available ecological niches, in apparent defiance of the many natural laws that govern other ecosystems, and ignorant of their reliance on the global-scale movements of water and air needed to keep things exactly as they are.

The parallels to our industry are undeniable and should compel a clear course of action.

The metaphor of an isolated island brings into clarity not only the proliferation of business models and products within our industry, but also the external forces that keep us contained, separate and, therefore, vulnerable.

We've done an excellent job at diversifying our offerings against the demands of our markets, and an excellent job of optimizing our sites for maximum revenue and profit.

But we have not taken the evolutionary steps necessary to protect ourselves from the sort of legal and political disasters we must all agree could overwhelm us at any moment.

As an industry, we have quite rationally responded to the many legal and political dangers we face with an assortment of legal and political defenses. Our efforts to self-regulate in light of issues such as 2257 and to form outward-facing advocacy organizations such as ASACP are absolutely essential and must continue with even greater energy. But there is a strategic response we have neglected almost entirely.

We're already making so much money doing exactly what we have always done. But so long as the coffers are full and the clicks continue to arrive by the billions each day, why should we look outside the traditional bounds of "adult"?

Answer: Because we have arrived at an unprecedented moment in our industry's history, when the most significant things we can do to protect ourselves from looming illegality and the largest opportunities for even greater wealth are to be found in exactly the same place — just off the coast of our island.

The "isolated island in the middle of the ocean" metaphor was useful to illustrate where we are as an industry and how we got here. But to paint a picture of where we should be going, I'm going to hold up an island of a very different sort, one that provides a nearly perfect model for us to emulate.

Las Vegas Comparison
Las Vegas is an entirely invented place. It exists, like an island, in the middle of the Nevada desert. Just as our business always has, the business that serves as the economic engine of Las Vegas has been squeezed by morality and by the law throughout its own history.

Like adult on the Internet, gaming in Las Vegas has been elevated by its most elite practitioners to the zenith of profitability.

But in the way that Sin City engages the greater marketplace and delivers customers to its most profitable "products," it is light years ahead of adult.

The fact that today it is almost impossible to compare the moral acceptability of gambling to that of pornography in American society says a great deal about what has been achieved by the gaming industry in Las Vegas.

That this once-legally embattled industry has transformed itself in the public perception and insulated itself from legal vulnerability should inspire us in the general sense.

But more than that, in Las Vegas we can observe the application of a basic strategic principle that suggests to our industry a quite specific roadmap for the immediate future.

What Las Vegas has done so well, and what we must also do, is blur the line between vice and legitimate business, between that which our culture tolerates and that which its judicial benches and religious pulpits are compelled to criminalize and condemn.

If being an "island" makes us vulnerable, it is only because an island is easy to distinguish from that which surrounds it. "Hard edges" make absolute moral positions possible and empower the law to act with a minimum of process. If Vegas were just craps tables and prostitutes, it would have been shuttered a long time ago.

Concealing its most taboo, its most morally questionable, its most insanely profitable commerce deep within successively more acceptable layers (working from the inside out), it has both shielded its core business from the law and expanded the revenue scope of the industry to gargantuan proportions.

Gambling and hookers begat hotel rooms, which begat restaurants and Gap stores, which begat 300 commercial jetliner arrivals per day from points all over the world. As an "island," Las Vegas has not only expanded its borders but has also made those borders less distinct against the backdrop of mainstream commerce.

We must do exactly that, except in our case, the expansion of and the blurring of borders relates to the nature of our content and to the ways in which we acquire our traffic.

To find these opportunities and understand how best to engage them, it is necessary to consider the various content and traffic "edges" that define and contain our business as it exists today. It is upon and against these edges that we must invent and innovate as furiously as possible.

In Part 2, we'll examine content, traffic, and lessons learned. Stay tuned!

Jack Mardack is general manager of the FriendFinder Network. He is responsible for traffic acquisition for the company's 17 personals sites, and marketing and conversion optimization strategies.


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