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05.15.2007

New Frontiers of The Online Wine World

Something very interesting is going on in New Jersey. You have to be a bit of a wine geek mixed with a little tech geek to know about this piece of news, and you might need to be both in order to appreciate it as well. But it was announced yesterday that Gary Vaynerchuck of WineLibraryTV Fame has purchased the website Cork'd. By way of full disclosure, it should be noted that Gary's company advertises on Vinography.

Cork'd is one of the many Web 2.0, or should I say "Wine 2.0" startups that is attempting to bring the power of social networking to wine lovers. Those of you who are long time readers know what I think of such web sites, and for those of you who are not, I can sum it up easily: they are doomed to fail.

However, things start to get very interesting when retail sales come into the picture, especially from one of the largest wine retailers in the country. I have no idea what Gary is thinking about -- this is a pretty big shock to be sure -- but there's a BIG difference in my mind between the business model for a community wine site, and a nationwide retail wine site with community built in.

This is certainly a move that many people in the wine industry should be watching very carefully. It will certainly make for very interesting conversation at the upcoming Wine 2.0 Conference that Gary and I will be speaking at in a few weeks.

Comments (15)

jb wrote:
05.16.07 at 2:58 AM

Hi. We have commented here before, but we have been trying to forge new frontiers ourselves combining retail and community in the wine world at domaine547 (http://domaine547.com). Sure, we love what Gary is doing. But he's not the first or only one doing it!

Alder wrote:
05.16.07 at 8:18 AM

Jill,

Thanks for the comments. I see a big difference between what you offer and what one of the largest wine retailers in the country has the power to do in the marketplace with an investment in Cork'd. Don't take this the wrong way, but it doesn't matter whether you and WineQ and WineWoot!, etc. have dabbled in retail+community before when a huge player moves in like this.

It's like a small mom and pop harware store yelling that they came up with the idea to sell hammers in the neighborhood first, when Home Depot announces they're building a store nearby.

Orion Slayer wrote:
05.16.07 at 11:06 AM

I am not familiar with Cork'd and community web sites (I'm still new to blogs.) Maybe two questions would help clear it up:

What is the difference between a site like Cork'd that is "social networking" and the forums on wine library TV?

I understand the impact of a large company purchasing a smaller entity (ability to pour in more money, able to out do the competition, change the original site to a more company focused effort) but what do you think the implications of Wine Library purchasing Cork'd will have?

Ryan wrote:
05.16.07 at 11:19 AM

I'll be interesting to see how much the wine library store will be integrated with the cork'd community. Gary is going to have to walk a very fine line so that he doesn't alienate the cork'd user base by making it too sales oriented.

jb wrote:
05.16.07 at 2:08 PM

Alder -- we'll have to take 'mom and pop' as a compliment (for the time being) since we'd rather be unique/intimate/approachable than large-scale/corporate/big-box.

We're not aiming to be Blockbuster or even Netflix when it comes to wine. Just a place to come learn, hang out and maybe buy a bottle or two. Of course, time will tell.

Joel wrote:
05.16.07 at 5:11 PM

I couldn't agree with you more Alder. The wine tasting note site is interesting and a cool feature but it doesn't have legs. Combine the tools and talented programmers that Cork'd had with the retail operation and the community that Gary has built-in ("Vayniacs" or whatever) and you've got something that Wine.com and other "Web 1.0" companies are immediately going to have to take a very close look at.

WineQ, BottleNotes, places like that are different and going for different experiences. I don't think they (including domaine547) are trying to compete with Wine.com (or the newly minted Wine Library) anymore than a third party or winery wine club competes with Wine.com. So I don't think the Home Depot/Mom and pop store analogy completely fits. I actually think that if WL is successful it will bring a measure of attention to others in this space. Gary kicked the first domino, the question is if this creates an arms race among wine e-commerce bigs...

Bottom line is this development is not surprising if you have you eyes set of toppling the online wine retailers out there and moving wine e-commerce from Web 1.0, Amazon circa 1999 to Wine 2.0 social e-commerce.

One interesting (and I blogged about this on Vivi's, is something you mention here. Cork'd built up a community but Gary took it down for the tools. Yeah the community was nice, but if he can enable more sales to his existing community (and maybe add a few more) using the technology that is the real value. So your thesis that these sites are doomed to fail (the ones without a retail component) I think is right on. I don't think Gary et al paid much of a premium for the user community. In fact, if e-commerce alienates the existing Cork'd community who cares, really. If Gary can convert 10% of the users of Cork'd into paying Wine Library customers then WL wins out. So basically Gary and WL have proved that the value of the community is very very low! Interesting no?

Alder wrote:
05.16.07 at 7:39 PM

Orion,

Forums are about dialogue, social networking is about making connections with other users that are less about conversation and more about links of trust that can be used to "discover" new things, or build an identity by recommending things to others. Just a different paradigm.

As I'm not sure exactly what Gary plans to do with Cork'd, I don't know what the implications are, for sure. I do know however, that Wine Library seems to be on a bit of a marketing binge, and is clearly becoming a very visible brand in the wine retail world. There are a lot of different directions that Gary could take the venture, as some other readers have commented, from simply utilizing some of the technology that Cork'd developed to trying to create the killer combination of community and retail, to something new entirely.

Alder wrote:
05.16.07 at 7:43 PM

Joel,

Thanks for the comments. Where are you getting your information that Gary bought Cork'd just for the technology/tools ? That wasn't clear to me from my reading.

I'm not sure I entirely agree that the value of the community is low, by the way. The value of the Cork'd community may indeed be low, but community can be a very powerful force if tapped correctly. Just ask eBay.

Joel wrote:
05.16.07 at 8:33 PM

I don't have first hand knowledge, that is speculation based on reading his interview Q&As. The Cork'd community is secondary, a bonus. From reading Gary's posts and interviews he's had this view/vision of a community built around buying wine and he saw Cork'd and thought they built what he wanted for his community. He said he heard about it last May and started trying to figure out how to buy it almost immediately. That implies he DID NOT put a value on the community. The fact they built one is a bonus but not at the core of the value to Wine Library.

I don't remember the post where he said that, I think it was on Cork'd or one of the other myriad of interviews with blogs he's done to date.

Rumors had it that Cork'd was being shopped around and didn't go to the likes of CNET and other online conglomerates. I'm sure they shopped it, whether it was to that big of a company I don't know.

If you were to evaluate that company in terms of its following (20,000 registered users I read somewhere, maybe 1000-2000 active) its not very large when you compare it to eBay, Amazon, etc... even in their early days. Even to compare it to more established notes sites like CellarTracker (you point that out in your own post). I say 1K-2K because its pretty well established that these social sites are dominated by 5-10% of the users.

Now, Gary has created a pretty healthy following, without the Cork'd community,that he can leverage the tools that Cork'd has and make a good value add to his core business (wine retail). One that, if they set their sites high enough, should be a significant challenger to the aging Web 1.0 wine e-commerce companies...

David Scott wrote:
05.22.07 at 12:03 PM

I agree that this will definitely be an evolution worth watching. I have to admit, however, I have to raise an eyebrow anytime someone attempts to mix an industry powerhouse with the general population. For me, this is along the same magnitude as a company like Dell buying CNET.com - is it out of genuine love and concern for the industry or a move to purchase a ready-made promotional tool? What if Microsoft bought MySpace? From a technology prespective, it would have been cheaper and easier for Gary V. to develop and integrate his own community feature, but he didn't because he wants the audience and everything they bring to the table - including but not limited to their wallets. I applaud him for his business sense and hope that his intentions are truly loyal.

Tina wrote:
05.25.07 at 8:33 AM

Even better that Wine Library is www.tastoria.com They hold live wine tastings over the internet that are fun and interactive. You can purchase your pack of wine for each event online or over the phone and have it delivered to your home. Then invite friends over to your own wine tasting party. The next one is on Friday, June 22, 2007, and the theme is "Sommertime Sip 'n' Sizzle" with great grilling food suggestions to pair with the wines.
It really is a good time. You can talk to the expert wine panel in the chat room and ask them questions about the wines you are tasting, they will answer you live during the broadcast. Or you can chat amongst the other participant. It is entertaining and educational!

Anonymous wrote:
10.26.12 at 12:38 AM

Perfect!

10.31.12 at 1:21 AM

Hi there!

Anonymous wrote:
01.15.13 at 4:38 AM

Hello!

cialis_black wrote:
03.24.13 at 1:31 AM

Aloha!

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