Doing Business on the Internet - Part XII

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Doing Business on the Internet - Part XII

By Sam Vaknin Author of "Malignant Self Love - Narcissism Revisited"

These essays were published by the Israeli (Hebrew) edition of PC Magazine back in 1996, when the Internet was in its formative epoch. I have left them essentially unchanged, except for a few minor errata I corrected. I find time travel fascinating. It is interesting to recall the mainstream view, ten years ago, about the Internet, its goals, its role, and its future. So, here goes:

The Bloodbath

This is the phase of consolidation. The number of players is severely reduced. The number of browser types will be limited to 2-3 (Netscape, Microsoft and which else?). Networks will merge to form privately owned mega-networks. Servers will merge to form hyper- servers run on supercomputers in "server farms". The number of ISPs will be considerably cut.

50 companies ruled the greater part of the media markets in the USA in 1983. The number in 1995 was 18. At the end of the century they will number 6.

This is the stage when companies - fighting for financial survival - strive to acquire as many users/listeners/viewers as possible. The programming is shallowed to the lowest (and widest) common denominator. Shallow programming dominates as long as the bloodbath proceeds.

>From Rags to Riches

Tough competition produces four processes:

1. A Major Drop in Hardware Prices

This happens in every medium but it doubly applies to a computer- dependent medium, such as the Internet.

Computer technology seems to abide by "Moore's Law" which says that the number of transistors which can be put on a chip doubles itself every 18 months. As a result of this miniaturization, computing power quadruples every 18 months and an exponential series ensues. Organic-biological-DNA computers, quantum computers, chaos computers - prompted by vast profits and spawned by inventive genius will ensure the longevity and continued applicability of Moore's Law.

The Internet is also subject to "Metcalf's Law".

It says that when we connect N computers to a network - we get an increase of N to the second power in its computing / processing power. And these N computers are more powerful every year, according to Moore's Law.

The growth of computing powers in networks is a multiple of the effects of the two laws. More and more computers with ever increasing computing power get connected and create an exponential 16 times growth in the network's computing power every 18 months.

2. Free Availability of Software and Connection

This is prevalent in the Net where even potentially commercial software can be downloaded for free. In many countries television viewers still pay for television broadcasts - but in the USA and many other countries in the West, the basic package of television channels comes free of charge.

As users / consumers form a habit of using (or consuming) the software - it is commercialized and begins to carry a price tag. This is what happened with the advent of cable television: contents are sold for subscription and usage (Pay Per View - PPV) fees.

Gradually, this is what will happen to most of the sites and software on the Net. Those which survive will begin to collect usage fees, access fees, subscription fees, downloading fees and other, appropriately named, fees. These fees are bound to be low - but it is the principle that counts. Even a few cents per transaction will accumulate to hefty sums with the traffic which will characterize the Net (or, at least its more popular locales).

Adverising revenues will allow ISPs to offer free communication and storage volume. Gradually, connect time charges imposed by the phone companies will be eroded by tough competition from the likes of the cable companies. Accessing the internet might well be free of all charges in 10 years time.

3. Increased User Friendliness

As long as the computer is less user friendly and less reliable (predictable) than television - less of a black box - its potential (and its future) is limited. Television attracts 3.5 billion users daily. The Internet will attract - under the most exuberant scenario - less than one tenth of this number of people. The only reasons for this disparity are (the lack of) user friendliness and reliability. Even browsers, among the most user friendly applications ever - are not sufficiently so. The user still needs to know how to use a keyboard and must possess some basic acquaintance with the operating system.

The more mature the medium, the more friendly it becomes. Finally, it will be operated using speech or common language. There will be room left for user "hunches" and built in flexible responses.

4. Social Taxes

Sooner or later, the business sector has to mollify the God of public opinion by offerings of political and social nature. The Internet is an affluent, educated, yuppie medium. It necessitates a control of the English language, live interest in information and its various uses (scientific, commercial, other), a lot of resources (free time, money to invest in hardware, software and connect time). It empowers - and thus deepens the divide between the haves and have- nots, the knowing and the ignorant, the computer illiterate.

In short: the Internet is an elitist medium. Publicly, this is an unhealthy posture. "Internetophobia" is already discernible. People (and politicians) talk about how unsafe the Internet is and about its possible uses for racial, sexist and pornographic purposes. The wider public is in a state of awe.

So, site builders and owners will do well to begin to improve their image: provide free access to schools and community centres, bankroll internet literacy classes, freely distribute contents and software to educational institutions, collaborate with researchers and social scientists and engineers.

In short: encourage the view that the Internet is a medium catering to the needs of the community and the underprivileged, a mostly altruist endeavour. This also happens to make good business sense by educating a future generation of users. He who visited a site when a student, free of charge - will pay to do so when made an executive. Such a user will also pass on the information within and without his organization. This is called media exposure.

The future will, no doubt, witness public Internet terminals, subsidized ISP accounts, free Internet classes and an alternative "non-commercial, public" approach to the Net.

(continued)

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AUTHOR BIO (must be included with the article)

Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Until recently, he served as the Economic Advisor to the Government of Macedonia.

Visit Sam's Web site at samvak.tripod.com