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 emember
"Got Milk?" The latest version of the popular milk-industry
ad features a supine Britney Spears, grinning
lewdly. "Baby,
one more time isn't enough," the caption reads, " . .
. when I reach for the glass, baby, fill it up. Three more times."
Those milk-industry
ads got millions of teenage hormones pumping (which, in turn, got
millions of kids to at least try milk), and the Internet brain trust
thinks the same thing will work for e-commerce. In a bid to combat
what it calls a "lack of confidence" in the Internet,
a group of online businesses, including the web portals Excite and
iWon, has christened today, April 3, "Back the Net Day."
Chosen to commemorate
a plunge in the Nasdaq on this same day last year, web surfers are
encouraged to show their appreciation for the Internet today by
buying something online — anything — or by donating online,
or by conducting some aspect of their daily business online. It's
pretty nebulous, actually. Says organizer Michael Tchong: "We
must band together and send the world a loud, clear message that
the Net will not only survive but thrive."
It's like "gay
pride," only more obnoxious. Without this kind of garish, navel-gazing
orgy of togetherness, Tchong believes that online behemoths such
as Yahoo and Amazon.com might go bankrupt, "and everyone else
will follow." Unless the dot-coms of the world unite, the Internet,
he feels, will devolve into a medium for e-mail and personal sites.
Of all the
Luddite prognostications ever made about the Internet, this one
takes the cake. But the trouble with prognostications about the
Internet is that anyone is free to make them; and, if you're a jazzy
e-marketer like Mr. Tchong, people might think you know what you're
talking about. (For one of his earlier web ventures, Mr. Tchong,
CEO of technology consultant Iconocast Inc., bragged that he hired
the same PR firm "renowned for throwing the incredible entertainment
at Studio 54 during its heyday.")
So, lest you
be seduced by Mr. Tchong's doom mongering, bear witness to these
facts about the Internet economy:
- By one pessimistic
estimate, the Internet is expected to add up to 0.4 percentage
points to annual productivity growth over the next five years,
according to new research from the Brookings Institution. University
of Minnesota economist Timothy Taylor says that a more realistic
figure, splitting the difference between the pessimists and the
optimists, is 0.8 percent, which could cause the economy to grow
at 3.5 percent annually. Under that scenario, the economy would
double every 20 years; it would quadruple every 40 years. After
20 years of this higher growth rate, GDP would reach nearly $20
trillion. This is staggering. And this estimate doesn't take into
account the further gains that would come should broadband be
piped into every home.
- The current
economic expansion, which started in March 1991, right around
the time of the Internet's coming of age, is the longest in U.S.
history.
- Internet
usage continues to rise exponentially, and consumer e-commerce
sales are up by 67% over a year earlier, according to the Census
Bureau.
- According
to calculations by Cisco, the technology company, its savings
from using the Internet amount to $1.4 billion per year, or 7%
of sales. If, according to a recent article in BusinessWeek,
the rest of the manufacturing sector could even do half as well
as Cisco, $150 billion would be cut from annual manufacturing
costs. Only a few firms have gone through the deep structural
reconfigurations needed to become web-based organizations, but
those that have done so have achieved dizzying results (e.g.,
some have cut administrative costs by 75 percent).
These trends
are auspicious, to say nothing more. The only reason the Net has
not fulfilled its earlier promise — much of it ridiculously
unrealistic, to be sure — is that the technology hasn't caught
up with the dream. For example, we are years away from the widespread
introduction of broadband into the home.
Ironically,
the solution that Mr. Tchong envisions for the Internet — the
"pay-per-page" model — is itself an example of elusive
technology. Mr Tchong thinks Internet users should spend a few cents
on dozens of websites rather than subscribing to a few using a third-party
account. At present, however, there is no micro-credit-financing
model that has been sufficiently tested and marketed to win the
trust of e-consumers.
As Taylor points
out in the current issue of The
Public Interest "only about half of Americans had a
home connection to the Internet by the end of 2000, and most of
those connections were over painfully slow telephone modems. Business-to-consumer
e-commerce was about $30 billion in 2000, or 1 percent of retail
sales." We have, in other words, only glimpsed the future,
not lived it.
None of this
is to suggest that the Internet will change everything. That mindset
was the swamp of hyperbole into which the New Economy sunk five
years ago. But now, with "Back the Net Day," we are being
equally foolish.
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