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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Follies who wrote (6630)	12/31/1997 2:32:00 PM
From: steve lipson	Read Replies (2) \| Respond to of 13594

Exactamundo! The Internet eliminates some middlemen, but it creates opportunities for new ones at the same time. The idea that the Internet's value proposition was in eliminating all middlemen was a popular prediction a year or two ago, at that embarrassing stage in the life cycle of new technology when it's far too early to see how it will really be used. Still, some people have to make predictions for a living, so they end up saying some pretty stupid things. There's ample historical precedent for disregarding that kind of black and white prediction. People are always tempted to see the impact of new technology as coming directly out of the hide of some traditional business. The impact is usually much more subtle, as well as far reaching. The whole point of investing in new technology infrastructure is usually because it allows us to do things we never could do before, creating new demand, rather than a substitution effect. The fax did not eliminate Fed Ex, or even the Post Office. While there are examples like buggy whips and slide rules, think how many generations ago we first heard phrases like "the cashless society," or "the paperless office." Technologically feasible, but not consumer friendly. No sale. You can make a better case that the Internet reduces demand for physical infrastructure. How many bookstores did Amazon.com not have to build in order to serve consumers nationwide. But wait, why didn't each publisher simply put up a Web site and eliminate the bookselling middleman? Now perhaps we're on the same page.