Hi Ray:
I would not let illiteracy statistics impress you too
much. If only 20% of Indians or Chinese use Internet,
these numbers are more than the number of Americans
and Europeans using Internet combined. Among the
educated classes of these 2 countries Internet has
caught like fire. I would bet that each and every
engineering professor in the US gets up to 10 daily
e-mails from prospective grad students with Pdf
files attached or pointing to personal web sites.
I have several Indian friends working for companies
with dual US/Indian locations that Internet to
conduct business.
I think Mike has it right. We have used voice and
data communications networks to replace most traditional
intermediaries in the distribution system, and a tremendous
amount of revenue has been shifted to the telecom
sector. Just look at the impact of this shift on
electric energy demand on the West Coast. If you
add up what households spend on phone/ISDN/DSL lines,
cable/cable modem service, ISP fees, wireless service,
the increase has been enormous and once buildouts are
completed, these fees will represent recurrent revenue with
minimal costs for all service providers. And this
is only the residential side of the story. The business
side is even more significant.
Right now only a small number of companies or institutions
have fully integrated the Internet in their business
practices. This shift eliminates a large number of white
collar jobs used in the past to process payrolls, send
orders out to bid, process invoices, etc. Europeans
have not even started this conversion at all.
The present bear market is more a psychological
phenomenon than an objective phenomenon. For example,
looking 10 years out, is it reasonable that Schlumberger
should have 2 to 3 times the P/E of Intel, and 5 to 6
times the P/E of WCOM? We'll need oil, but it's hardly
a fast growth business.
Best regards,
Bernard Levy |
