Larry Dague, the president of Dallas-based ScubaToys, took a new look at Webcams when he decided to use the Internet to expand his company's business.

ScubaToys, which specializes in scuba-diving equipment, has only one store. Despite the fact that Dallas is usually not even remotely associated with scuba diving, ScubaToys has outperformed its competition by using the power of the Internet. Even in a down economy, the company is exceeding its growth projections by 60%, and expects to reach more than $3 million in sales by the end of 2003. In contrast, the average scuba shop in the United States pulls in $340,000 in annual sales.

ScubaToys' experience shows how powerful a Webcam can be in building a business. Webcams send video signals over the public Internet using the Internet Protocol (IP), enabling anyone with a browser can see real-time views of whatever the camera is capturing. They've become plenty popular — simply click on a site such as WebCam Central and choose from a wide variety of sites such as "AfriCam," "PandaCam," and, yes, even "KelpCam."

The use of Webcams can be as dull as video cameras pointed at cornfields or as exciting as video cameras positioned on NASA launch pads.

But Webcams aren't just a choice between science and silliness. As one ScubaToys has demonstrated, this simplest of Web-based tools can be a powerful revenue-generator. After all, when it comes to video it's all in how you look at things.

When is a security camera not a security camera?

ScubaToys' first Webcam was really "SecurityCam." What visitors to the ScubaToys Web site saw when they clicked on the Webcam were static photos of the store, updated every four seconds, taken by the store's four security cameras. To create the Webcam from the existing security system required a modest investment of $35 in a video capture card, some free software downloaded from the Internet and an unused PC.

When prospective customers would call the store with product inquiries, Dague urged them to go to the Web site and click on the Webcam while still chatting on the phone. Once they did, Dague would step into the picture and wave. The result, Dague says, was galvanizing. Visitors to the Web site could not believe that they were actually seeing the retail shop and not a canned tape. Once they put Dague through his paces — raising his right hand on command, jumping up and down — customers realized they could get a custom product demonstration over the Web. At that point, many became serious buyers.

The philosophy behind the camera

Dague views the Webcam as more than a novelty to attract people to his Web site. "Most companies treat their Web sites like an electronic catalog of their products and services that they want to get into people's homes and offices. We try to think of our Web site as a way to bring people out of their homes and offices and into our store."

For Dague, this meant designing a Web site that made visitors to the site feel as though they were visiting the store, spending time with Larry and his business partner, Joe, and the rest of the ScubaToys store team. The Webcam became one of the most important tools for creating this sense of personality and personalization.

Dague also feels that video is important for establishing the company's credibility and creating a feeling of trust with the buyer. "When people do business over the Web, they have no idea who is taking their credit card, if the merchandise exists or not, or if the Web site will be here today and gone tomorrow," he says. "The Webcam alleviates those anxieties and makes people more comfortable about doing business with us."

Keeping it fresh

One of the challenges that any business faces is keeping a Web site fresh in order to bring customers and prospects back again and again. For small businesses, this can be a particular burden — creating new content and integrating it into the site takes time.

ScubaToys' Webcam keeps the company's Web site fresh to encourage repeat visitors. "I'm the person who actually prepares the content of our site, so ordinarily I'd have to spend time each week creating, formatting, and updating information," Dague says. "With the Webcam, the content is always changing and it requires absolutely no effort on my part — other than hooking up the camera — and I can stay focused on making sales."

Seeing is buying

Once the first Webcam had proven its value, Dague decided to invest in a more sophisticated camera that would do full-motion video and let site visitors actually control the camera remotely — zoom, pan and tilt — to look at merchandise more closely.

The new cameras cost about $1,800, complete with software, but the return on investment took less than a week with the sale of a single scuba package. "This technology is extremely inexpensive for the sheer power of it," Dague says. He is confident that the video assist has often helped close a sale. "When I recommend one product over another, and then can actually hold up the two products side by side and point out the differences, I earn the customer's trust. Most of the time that's what makes the difference in the sale."

Dague now has customers who use the Webcam to check when he arrives at the store in the morning so they can call him and ask questions about products. He encourages that kind of use of the Webcam. "We don't mind if people 'tune in' to check out what we're having for lunch or watch us stocking shelves. . . . We want them to feel like they really know us. If they know us, we think they'll keep buying from us."

How it works

With the new camera, anyone visiting www.scubatoys.com will see what the camera is pointed at. If someone wants to control the camera, they click on "start-control" and this gives them remote control of the camera for two minutes. After two minutes, if no one else has requested control of the camera the session continues. If someone else has requested control, the session is terminated and the next person in line has control of the camera for two minutes.

Dague can override the user control at any time and take control of the camera in order to continue a sales discussion. He can also control how much zoom and resolution are in the user's control to prevent abuses like someone using the camera to try to read confidential information.

Currently ScubaToys is testing an underwater Webcam that will allow Web visitors to see streaming video of scuba classes in the store pool from both above and below the water. Here, too, Dague will be able to set up controls on the camera to ensure that he protects the privacy of the customers in the pool.

The network behind the scenes

One of the most important, although least visible, components of the ScubaToys Webcam is the company's network. ScubaToys has followed the typical migration of small businesses expanding their use of the Internet. The store started out with a single computer and a dial-up line for Internet connectivity. It moved to ISDN (Integrated Services Digital Network) to gain more speed and now, with the increase in its e-commerce activities, the company has upgraded to T1 speeds.

The company's Internet service provider enables a business-class router with built-in firewall protection to connect the store's internal network to the Internet. The Webcam is connected to this router and has its own Internet Protocol (IP) address so that it can be seen over the World Wide Web.

For top performance, the company upgraded its local-area network from a hub to an Ethernet switch, which connects to the four store PCs used for point of sale, inventory management and e-commerce.

In order to protect the internal network from being accessed right along with the Webcam, Dague added a second business-class router from Cisco, also with built-in firewall protection, which uses Network Address Translation (NAT) and Port Address Translation (PAT) to protect the identities of the individual PCs. These techniques assign a single IP address to multiple computers, improving security while saving the company money. The Cisco router also includes built-in Quality of Service, which enables Dague to ensure that the Webcam traffic never consumes all of the bandwidth on the network at the expense of his PC traffic.

Dague considered going down to the local retail store to buy a "network in a box," as he describes it, but he is glad that he went with business-class routers and switches instead.

"It would have been the easy thing to do and I would have made a million mistakes," he says. "It wasn't until I'd been at this for awhile that I realized the security, performance, and reliability I had with my network. We wouldn't be able to grow as quickly or confidently as we're growing if I didn't have the right network foundation in place."