"The end of the Web as we know it" or Can CBS.MW become the WalMart of Internet Investing?
"...The merger of Netscape Communications Corp. and America Online Inc. calls into question the bedrock notion that the Internet will be an inherently democratic medium, uncontrolled and uncontrollable by any central authority...But what the absorption of Netscape by AOL tells us is this: The Web is not immune to the normal forces of consolidation that almost inevitably bring "efficiency" and uniformity to new media and new industries. Indeed, the only thing different about the Web is that the opportunity -- a new trillion-dollar-plus worldwide economy in four or five more years -- is of such a large scale that the consolidation is occurring at warp speed, the Web's typical pace...Broadcast television has bid farewell to the days of three dominant networks. Cable television still is gravitating toward scores of channels. And the Web always will have thousands, and even millions, of media outlets.
But the high-traffic, commercially viable sites increasingly will come into the hands of a few. Why can AOL pay $4.2 billion for Netscape and not even feel the sting? Because it is playing with unreal money. Its stock has picked up more than $20 billion of value in the past few months. To spend $4 billion of newfound value to leapfrog past Yahoo! Inc., now worth $21 billion itself, to become the biggest portal site on the planet is a no-brainer -- especially when the future of electronic commerce is at stake and the chance to wrap up pole position on the consumer side comes into the bargain.
What you're seeing is nothing different, really, than what has happened in any number of more prosaic industries in the two centuries or so of the American free enterprise experiment. Mom-and-pop stores give way to regional and national chains; then, someone emerges to become the category killer that sets a pace that everyone else must match, or they will become commercially extinct.
It's the tale of Wal-Mart Stores Inc. in discount retailing or Blockbuster Entertainment in the video rental business. Sure, there always will be new players and lots of players. But there always will be a defining player. And that leader won't change that often, no matter how "democratic" the rest of the industry looks.
AOL has made it clear that it intends to define the Web, for better or worse. Its reach now will extend to 70 percent of American Web users every month. How the Web will react bears close watching.
There will be many sites and individuals that fight day-in and day-out to provide the Web fierce independence and individualism. But, the game has now changed, irrevocably.
The number of players who will have more than $1 million per day in profit flowing into their coffers just from online businesses -- $1 million per day to further their Web ambitions -- will be, for the foreseeable future, counted on one hand.
Indeed, one finger.
That finger is tagged: America Online Inc..."
source: © ZDNet Wednesday November 25 11:23 PM ET
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