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Citi411 (the "Company") was founded to capitalize on the substantial niche opportunities that existed in the city portal business. Just as Walmart built a large, profitable operation by providing small towns with efficient retail stores, Citi411 aimed to capture the city guide business in second- and third-tier markets by providing superior service to constituents who were under-served or even ignored by larger players. Citi411 initially targeted college and university students, who through their schools had nearly universal access to high bandwidth Internet connections, and who tended to be the heaviest users of Internet services. A survey of students conducted by Citi411 revealed that two-thirds had used local portals in the past, and found them useful. The vast majority stated that they would use a city portal tailored to their local community, on average an estimated three times per week. The Company also targeted households that had recently moved into Citi411 communities, since new residents tended to make numerous household purchases and required a substantial amount of local information to help them become familiar with the area. Building on its early success in the community of Davis, California, Citi411 leveraged its first-mover advantage and its highly service-oriented approach to become the leading community portal in its chosen markets.
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