"The Desktop Global Marketer" (tm)

   A free on-line newsletter of Sidereal Designs, Inc.,
   for Internet Entrepreneurs, and those who are
   considering becoming one.
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                 August 2000

In this issue: "what exactly is the current state 
of affairs, and how rapidly is this future coming 
upon us, and in what form?"


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The State of The Web - 2000

A few years ago now I wrote piece for our web site on the
(then) current impact of the web on society and business and
its expected growth. We had some statistics and some 
forecasts then, but it was anyone's guess how reliable they
were. There was, at that time only a few short years ago,
realistic controversy over the real impact of the web on 
business and commerce, and the uses it could serve.

Today we have much better statistics and it's clear to 
everyone that the web is the future of commerce, simply
because it is the future of communications, but what exactly
is the current state of affairs, and how rapidly is this future
coming upon us, and in what form?

In the last month several interesting new studies have
appeared that shed light on these questions. First, the present
penetration of web usage was included in its surveys by the 
Neilson rating firm. According to Nielsen, which collects 
real-time data from more than 65,000 panel members in the 
United States, 52% of the home population in the U.S. was
surfing the Web in July, and nearly 144 million people in the 
U.S. had access to the Internet from home, up 35% from a year 
ago.

"Internet access is growing dramatically each day due to 
cheaper access, making it possible for the mainstream consumer 
to log on," says Sean Kaldor, VP of eCommerce at NetRatings. 

These figures are probably as reliable as we can get and reflect
actual patterns of use rather than simply potential users who
have access.

Other measures of specific uses of the web are consistent with
these numbers. For example, 50% of Americans use the web to
look up medical information according to recent surveys.

A surprising recent study indicates that the growth of the web
in terms of available pages of information is very much larger
than had been supposed. Traditional "spider" methods used
by search engines may actually access only a tiny fraction of
the web according to these studies. For example, much of the
best information on the web is contained in academic and
institutional databases and must be accessed by methods on
the home page of the provider and is not directly linked and
hence not findable by the search engines. 

About one third of the web according to other studies is not
linked from other pages but must be accessed by knowing the 
URL through other means. The current amount of information 
available on the web may be as much as 500 billion pages.

One implication of these findings, which has been more or less
known by anyone connected with the web for some time, is
that the search engine approach is failing miserably as an
enabling technology for data retrieval on the web. We do not
yet know what technology will replace it, but the person who
invents it is going to become ridiculously wealthy.

One area of internet commerce that is booming is business-to-
business, or "B2B" sites. These are vertically-organized
within industries and enable a market place of suppliers which
is efficient and fast and is resulting in enormous savings for
businesses in time and effort to conduct efficient purchasing.

Such sites are one response to the problem of locating
information rapidly on the ever-expanding web. Similar ideas
are beginning to appear to assist providers of professional
services to market to the consumer.

In its earlier phase e-commerce on the web was principally 
a collection of billboards used by businesses as advertising.
Advertising is still an important aspect of commercial web use
but the focus is increasingly shifting to presentation, selection
and purchase of goods and services.  "Perfection of the market-
place" and savings in time and efficiency for consumer and
businesses alike are the obvious drivers. Some industries whose
product is purely information which can be delivered over the
web are likely to vanish altogether in their present form and
become totally web-based. We see the beginnings of this trend
in the securities and travel industries.

We expect that increasingly web site development will be 
focused on provision of on-line databases and the means to
interactively develop web-page content from them. This, and
on-line credit card billing, are the principal things needed
to move from the billboard era to the transaction era in web
commerce.

Currently, according to the statistics, the principal non-com-
mercial use of the web is for entertainment. This is not 
surprising considering that up until now the greatest 
information-bandwidth medium available, television, consisted 
of more than 95% entertainment programming. 

The future here is clearly with broadband and multi-media. In 
theory we can today bring you the equivalent of cable tele-
vision and more from any web site. In practice, if the technol-
ogy is here, the scale is not and we are some years (but only 
a few) away. We can however currently bring some very 
creditable sound, slide-show, and limited video presentations 
to most web sites at a reasonable cost, and the use of these 
methods will increase dramatically soon.

Web radio is currently quite acceptable as an entertainment 
medium and streaming audio and video clips are effective as
adjuncts to commercial web sites. As the penetration of DSL,
cable-modem, and other broadband technologies is rapidly
increasing in the home-user market, there will be a corres-
ponding shift to streaming multi-media in all web sites.

Finally we are currently seeing the rapid emergence of 
"wireless" web appliances that free the delivery of web infor-
mation from the PC tied to the line.

In sum, looking at the landscape of the web from the year 2000,
it is evident that the optimistic projections for the web of a
few years ago were not overly optimistic. The growth shows
no signs of abating, and the implication is clearly that current
technologies such as telephone communications
will merge into the web, but also broadcast technologies such  
as television, with the amazing implication that everyone may 
be their own originator of content as well as a simple consumer 
of  information.

Best,

Jamie


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