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Getting personal with Net Perceptions

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Way back about an Internet lifetime ago (actually it was April 14, 1999) this newsletter featured a personalization solution called e.Monogram Personalization Server from Axtive. (see Network World Fusion Focus: Web Applications archive at

I suggested that no matter how good the Axtive system is, expecting users to download a 200KB chunk of code just so you can sell better to them isn't an incredibly defensible proposition.

Today, we're going to look at a vendor that is arguably the leader in the personalization market: Net Perceptions. There's no code download, it's all done by cookies and tokens.

NP's flagship is Net Perceptions for E-Commerce, which the company describes as an "integrated combination of technologies, including collaborative filtering, neural networks, fuzzy logic and genetic algorithms." Whew, makes the head spin.

Despite the flurry of ten dollar words, the proof can be seen online at the likes of CD NOW ( where the Album Advisor ( is built with Net Perceptions for E-Commerce. I have found its recommendations surprisingly accurate (just enter three albums you have and if you have a large music collection, don't be surprised if you already have some of the suggested albums).

Net Perceptions have also been clever -- they have adapted their product to other environments. For example, Net Perceptions for Call Centers and Net Perceptions for Ad Targeting.

On its Web site the company states that, "During the first year, a suggestive (sic) selling strategy based on our technology can conservatively contribute 34% of total Web site sales revenue by (1) increasing the conversion of browsers to buyers by 2% each month, (2) increasing order size by 4%, beginning at $35 per average order, and (3) growing the percentage of orders from repeat customers from 30% to 35%." [I think the company must have put all of its money into software development because it is obviously not paying its copywriters much ... ]

That's a good story and it goes further to claim that many customers have recouped their costs in seven months! When you consider that Net Perceptions for E-Commerce starts at $60,000 and can easily cost $150,000, that's an interesting pitch.

The product has a very sophisticated foundation: an Open CORBA-based API that runs on NT, Solaris and AIX with Vignette Story Server, Microsoft Site Server 3.0 Commerce Edition, IBM Net.Commerce, Cold Fusion and Broadvision One-to-One and supports Oracle, SQL Server and DB2.

If you're trying to build a serious personalization system for your e-commerce site or your intranet (just think of the potential), Net Perceptions should be very near the top of your list.

Company: Net Perceptions, Inc.
Product: Net Perceptions for E-Commerce
Pricing: Starts at $60,000
7901 Flying Cloud Drive
Eden Prairie, MN 55344-7905
Tel: 612-903-9424 / 800-466-0711
Fax: 612-903-9425

Mark Gibbs is an consultant, author, journalist, and columnist. He writes two weekly columns, Backspin and Gearhead, in Network World and authors frequent features for a number of publications.

Gibbs is also a principal of Change Council and affiliated with a number of high tech ventures including Netratings, Inc., the most advanced Web audience measurement firm. Contact him at

Net Perceptions Web site

Take it to the edge
Network World, 02/22/99

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