Got Web?
Today is “Back the Net” day. Who says the Net needs backing?

By Neil Seeman, NRO associate editor
April 3, 2001 10:10 a.m.

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.