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To: burner who wrote (386)	6/25/1999 9:07:00 PM
From: burner	Respond to of 488

Meanwhile..... 3. PAINTING THE INTERNET BY NUMBERS by Mike Ogburn Some folks just don't get it. Their words certainly don't tell the story, and the only numbers they seem to understand are "this quarter's profits." Maybe, just maybe, a few other numbers will help them get the picture. Today, for instance, the Internet has 100 million users. It is adding more than 80,000 each day, and will reach 200 million users sometime in 2002. The Internet took only four years to reach 50 million users – television needed 13 years to reach that audience, radio 38 years. This usage isn't just to get sports scores, stock quotes or download "The Spy Who Shagged Me" screensavers. Real business – generating real revenues – takes place on the Net everyday. A recent University of Texas study, for example, estimated that the Internet Economy generated $301.4 billion in U.S. revenue and was responsible for 1.2 million jobs in 1998. About $6 billion in software is expected to be sold and downloaded via the Internet by 2001. And Forrester projected that inter-company trade of hard goods over the Internet will hit $43 billion in 1998 and surge to $1.3 trillion by 2003 – an annual growth rate of 99%. Fad? Of more than 500 CEOs surveyed by Booz Allen & Hamilton, 92% believe the Internet will reshape business strategy and the marketplace. Half of the homes in the U.S. now have PCs, and others are gaining access to the Net through palm machines, a new generation of phones and Web TV. More than 60 million Americans are expected to purchase something over the Internet by 2002. We're using the Net to shop, bank, invest, find a mortgage, communicate long distance, place bets, order groceries, download music, go to school, book vacations and dozens of other reasons. These and other facts paint a picture of an industry that is growing like no other industry in history. And that growth is translating into amazing revenue growth for Internet companies. With this high growth comes high stock valuations, something that eats at the Internet critics. The truth of the Internet undoubtedly lies somewhere in between the doom-and-gloom predictions of the bubble theorists and the unbridled optimism of the full-blown Net enthusiasts. A lot of these companies are overvalued, and a lot won't make it – a blanket statement that can be made for any new industry. But some Internet companies are going to continue changing the world, and who knows what premium that will command? Many Internet companies simply aren't profitable because the Net model demands heightened, up-front marketing expenses to capture market share. Unlike traditional businesses – which expense their principle costs of facilities and equipment over time – the Internets must show their mammoth marketing charges at once. The result: no earnings, little book value and a balance sheet that draws the ire of those who only measure a business by traditional means. So, in essence, what we've got here is a failure to communicate. One side believes the Internet growth numbers speak volumes. The other has trouble getting past the word "profitability." Here's one more number – 21st: as in we'll find out who has the last word sometime in the 21st century.