Week 13: Taking Stock and Looking Ahead

Some of these issues are also discussed in the Special Pull-Out of the WSJ, 12/6/99 entitled "The Internet".

  1. Where Things Are: WWW & E-Commerce

  1. Numbers: 100 million online by year end in US, 160 mill projected by year 2003; average time – approx 7 hrs/week – more for students and older people.

  2. Kind of usage: big winners – email & information (search engines, research on goods & services). Low usage currently of net as entertainment source.

  3. Requirement: increased transfer speed & connection speed; security; easier to navigate; more content.

  4. Goods purchased: books & CDs, computer related, air & hotel reservations 7 toys ( >20% of consumers in WSJ survey); flowers, electronics, appliances & office supplies (10-20%); wine, health aids, groceries, cars, specialty gifts ( < 10%)

  5. Evidence of serious competition among intermediaries – financial brokerage, retail chains, groceries

  6. Evidence of product differentiation – online research, IPOs, derivatives, e.g.

  7. Evidence of network externalities & other advantages to size – auctions, job-search, online financial markets,

  1. Where Things are Headed

  1. Broadband access – cable, DSL lines; faster "always on" connections increase actual usage

  2. Content increase? Increase in breadth of offerings on goods & services but decrease in pure information content? New goods solely designed for the net?

  3. Information: Learning online? Universities increasingly irrelevant? (information creation is a public good problem…) Only true for low-level courses and lesser-known colleges?

  4. Information: A group effort? Basic research impossible?

  5. Narrowing of choices in the long-run due to market shake-out? Dominant firms or segmented markets?

  6. Disappearance of intermediaries? Travel agents, realtors, booksellers … Role as organizer of information? As certifiers?