Stak:
Good article, and a topic close to my heart.
With no new applications to drive sales, the box builders have to stretch. The only game in town is the internet game, so it gets the pizzazz and hype this Christmas.
My views with respect to the internet are very different than those who toil in the associated industries, perhaps even a bit heretical. From a personal point of view, it's very useful. Email is cheap (although typing is time-consuming compared with talking on a phone), and I can access info inexpensively and quickly compared with a few years ago. Since I'm an info hound-dog, it's valuable.
That said, the attitude of some (like, the Dines letter), that it is "the second coming", appears ludicrous to me. The average guy or gal got real excited about it two years ago, went out and bought a PC and a modem (remember U.S. robotics stock?) tried it out, got goose pimples on the porn threads for a week, and sent 100 emails to friends. For most, it lasted a few months. Shortly thereafter, "it got boring". I've done enough survey work on the topic to know that the average guy or gal is simply no longer agog or excited about the internet, and I guess I don't blame them. It is clumsy, and has only a few real uses. We love it because we are interested in the markets. The markets move on info, and much info related to markets is available on the net. Great for us, but we are a minority. The earlier belief that the net would displace NFL football seemed daft to me at the time and has been so proven with the passage of time.
The belief that the net will become the ultimate shopping mall is another daffy duck idea from my perspective. Every company has its web page, which means there are simply too many to conceptualize, never mind visit. Additionally, we humans like to kick tires, sniff at and try on, etc. before we write cheques. Much buying is impulse generated in any event, and the web doesn't generate much of that. Most web buying (and there is not much of it) is price related and commodity product bound. This is not the stuff of which retail fortunes are made.
Net advertising is very ineffective, and companies are beginning to see this. Most web advertising is one net company advertising with another web company. A form of incest. Most of us don't even notice the ads anymore.
Humans are basically inclined to laziness. The net takes a bunch of work. Good marketers go out of their way to make the act of buying both a pleasant experience and easy. The net does not provide crushing competition to a good catalogue, a well run mall, a neighbourhood car dealership, etc. IBM spent a fortune on its "web-mall", then closed it down last year for want of useage. (We forecast that one).
A year or so from now, the web will settle in as one of many ways in which companies advertise and peddle their wares. One of, not the only one.
Does access speed really count? Yes it does to the aficionados, but again, we are talking small minorities. When one looks at how much of our time on the net is spent reading the pages, the access speed is really not a big fraction nor is it terribly important. Slow access can be annoying, but I doubt that blazing fast access will add large fractions to the net's user community.
I've had a lot of fun asking acquaintances three questions.
Have you tried the internet? (many have....roughly half).
Were you initially excited about it? (most were,...initially).
Do you still use the net more than occasionally and are you still excited about it? (Most use it only rarely and are definitely not excited,..."it got boring"). Try this out on your friends and see what you find.
To me, the net is fabulous technology. I am in awe of the brain power that conceptualized and designed the technology and I revel in understanding at least some of its complexities. But is it the second coming? Not. The average guy and gal are the keys to big markets. If they are not interested, a big market does not exist.
The net stocks are priced on a dream. Reality will intrude.
Best, Earlie |
