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To: Glenn D. Rudolph who wrote (56356)	5/11/1999 5:12:00 PM
From: Rob S.	Respond to of 164685

Glenn, thanks for the info on BarnesandNoble.com now also www.bn.com - I thought they needed to do something about that name and now they can be reached at several. ----------- Business History 101 text book, year 2020: The Tree Phases of Internut Development and Stock Speculation: Phase 1: Stupendous initial growth was propelled by the 200+ million base of existing PC owners. "Early adopter" quickly climbed on board encouraged by an eager media. Also fueling stock speculation was the rapid rise of Internet stock brokerages. Fed chairman Greenspan characterized this phenomena as the "Exuberant speculation leading to on-line gambling via the markets". Phase 2: Initial growth rates declined. Starting in late 1999, many new companies entered into campaigns to gather Internet market share through aggressive pricing, contests and product give-aways, and cross-marketing agreements. As the new media proliferated and advanced, it attracted "traditional" media companies and the content of the Internet also shifted. Ecommerce was increasingly tied to rich media and entertainment sites. when the frantic rate of growth declined, investors started looking "under the hood" at bottom line rates of return. The "Internet Darlings" tremendous valuations declined to a fraction of their peaks. Phase 3: Competition on the Internet plunges the world economy into the greatest "deflationary collapse" ever known. Far exceeding the turmoil caused the laughably titled "Great Depression" Price competition becomes so pervasive that profit margins are commonly only a fraction of what was typical "BI" -Before the Internet. More than one third of companies went bankrupt: Commented Mark Phillips, former CEO of Oxnard Industries, "We had a decent Internet effort but over half of our sales had remained in our physical stores. The Internet caused our hard store sales to lose money as well - it was just too convenient for our customers to shop on-line and if we didn't offer near the same prices in our local stores, they just paid the shipping and got it at the cheapest reliable source. We tried cutting costs and finally shut down our local stores, but by that time pricing on the Internet was at less than a sustainable profit level. Who knows who will be left standing when this whole thing straightens out." World governments reacted to the calamity by returning to isolationist trade policies. Many severely limited Internet commerce - often labeling it as "Against the better nature of mankind and prosperity of nations."