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To: Maurice Winn who wrote (21260)	1/13/1999 3:17:00 PM
From: Jon Koplik	Respond to of 152472

O.T. - Floyd Norris piece (from NYT) on Internet and stock prices. January 13, 1999 EDITORIAL OBSERVER What Will the Internet Economy Look Like? By FLOYD NORRIS he Internet is the wonder of the era, the tool that is expected to change everything. On Wall Street, Internet stocks are superstars. Amazon.com, the bookseller, now trades for more than 50 times the price at which it went public in 1997. Ebay, an auction house, is valued at 13 times what investors paid four months ago. These prices reflect huge amounts of money. Amazon.com is valued at around $26 billion, about the same as CBS and nearly three times as much as Federated Department Stores, the largest department store chain. Yahoo, the Internet search engine that went public almost three years ago, is valued at about $39 billion, nearly 100 times its valuation when it went public and more than Boeing or Anheuser-Busch. There are two possible explanations for those valuations. The market might be telling us that economic activity will soon come to be dominated by the Internet. Or the market moves could be evidence of speculation gone wild, of a great bubble that will inevitably burst. Those two explanations are not mutually exclusive. The Internet could be all that its fans expect, and some stocks could still be ridiculously overvalued. But what would the 21st-century economy look like if only the first explanation proves accurate? Retail activity would increasingly be dominated by Internet sales, to an extent hard to imagine. Federal Express would be an immediate beneficiary, assuming that Star Trek technology -- "Beam me up, Scotty" -- will not be perfected for packages. But while its stock did well last year, FedEx has slipped a bit this year, even as Internet stocks have zoomed. While Amazon.com fell 12 percent yesterday, it is up 53 percent for 1999. Deflation would be likely in the new Internet economy. It is much easier to compare prices on the Internet, a fact that will tend to force prices -- and profit margins -- down on items that are easily comparable. One of the wonders of the performance of Amazon.com is that it specializes in just such products. A book from one store is no different than a book from another. To be sure, service will also count. Getting a great price on something that does not get delivered for months is hardly a bargain. Brand-name images of quality could, if anything, become more important in a world where shoppers cannot examine the item before buying. Some stores no doubt will continue to prosper. Lettuce does not age well, so food stores are an obvious candidate. For clothes, where fit is important, many will prefer to shop where they can try on before buying. No one will want to wait for mail delivery of a new car battery. But over all the demand for stores would fall, creating a glut of retail space and falling rents as Internet sales represent transactions not made in stores. So far, the stock market does not seem to have anticipated that. While companies that own shopping malls have seen their stock prices slip a bit, the falls have been nowhere near the magnitude that would be expected in the Internet economy. Nor has the market anticipated the economic dislocations that would come along with such a huge change. A recession could easily result just from the upheavals created by failing retailers and plunging commercial real estate values. To say the least, the overall level of stock prices now does not reflect a recession risk. The most likely outcome is that the Internet will grow to be a much larger economic force than it now is, but that the stocks of Internet companies will nonetheless prove to be horrid investments for those who buy at current prices. Those who are buying do not really expect such an economy. They are just betting that this mania will not end soon. There is a precedent. In the 1920's, the great speculative stock was Radio Corporation of America, which took six years to rise 100-fold, twice the time Yahoo required. As the bulls forecast, R.C.A. became a dominant player in an industry that revolutionized American life. But those who bought the stock in 1929 still lost nearly all the money they invested. Copyright 1999 The New York Times Company

To: Maurice Winn who wrote (21260)	1/13/1999 3:21:00 PM
From: Ramus	Read Replies (2) \| Respond to of 152472

Mquarkce, Exactly the point! George see's that new "spectrum" will be created out of the old. The very act of "creation" will by definition impose an order on the use of that spectrum. In these new "smart" networks individuals may use "spectrum" as needed according to that need and of course according to what is allowed by their "driving permit". When this day comes we won't have archaic cell networks or TV stations operating on specific frequencies. Instead, we will have an ever changing amorphous web of interconnected "spectrums", RF based data networks operating in cooperation to the benefit of maximum spectrum usage and throughput. Tim Shepard and companies such as Parkervision and others involved in smart "soft" radios and adaptive antenna arrays are working toward this. Regards Walt

To: Maurice Winn who wrote (21260)	1/13/1999 4:03:00 PM
From: Maurice Winn	Respond to of 152472

Oooooops, I mean noise-to-signal ratio by increasing the number of boxes causing network epilepsy. Just a spot of technical dyxlexia! Meanwhile Jon, while shopping will be big on the Web, and WWeb transactions will be ubiquitous, the main value will come from communication and getting information. Yahoo! might be lucky and be a super bargain. A $50bn market capitalisation is trivial for big time Web providers. There will be hundreds with such value before this is over. Then again, all the current Net stocks might go bust and new ones be the successes. Maybe Q! On China and WCDMA - anything which benefits people in China benefits China militarily. Anything which provides an improved economic success rate improves military opportunity. The solution is to avoid the need for military 'solutions'. Military strength derives from economic success. You can't have one without the other. When you buy something "Made in China", you are supporting China's military development. Same when you sell them something. Be it a car or computer or rocket launching technology. Selling them a fighter plane is much more direct and timely military support, but they can invent their own if they have time and the economic base to do it. So unless you are planning an immediate war, it doesn't much matter what economic support is given. The quandary is that the economic support flows both ways. If you don't trade, you lose economic and therefore military power! Others WILL trade, so they get ahead of you economically and militarily. Oh the dilemma. By selling the military stuff, paradoxically you retain more military power by being the inventor and producer of it. They won't need to develop their own military stuff if it is supplied to them ready to roll. So they won't have the people who are good at doing it. If they are willing to buy something, such as soldering techniques, it probably doesn't matter. If they aren't willing to buy, it is because it is more important that they develop their own rather than be dependent on foreign technology. Something like that anyway. Mqurice

To: Maurice Winn who wrote (21260)	1/13/1999 5:09:00 PM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

Maurice - Also, George Gilder isn't really saying what can be done now in the way of "Keep a good lookout, don't shout or fart and you can drive your nanobox on any frequency you like", he's talking about what's possible instead of the frequency management rules used at present. Which will need the development of software radio, with fast chips, huge solid state memory, and all the drama. I can agree with this generally, although there are some aspects that may turn out to be impractical (the equivalent of the near/far problem has to be solved, and the solution is far from obvious - perhaps there is some form of distributed control that would work, or maybe central control, but it is a hard problem and in fact it may have no solution that is any more palatable than the FCC central control. IP routing is probably comparatively simple.) What I was disagreeing with, more than anything else, was the use of the present tense: Quote from GG - So you have a situation where the assignment of these specific frequency channels just no longer makes sense. Just FYI and in the interests of further interesting discussion. Clark