Death of the dot-com?

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Let me just get this off my chest.

Despite what you’ve heard lately about the “dot-com downturn,” the Web isn’t a fad doomed to disappear overnight. Next year at this time, you won’t be deleting your browser software and tossing the install discs into your parents’ attic (next to that mint-condition CB radio you bought and used for two weeks in 1978).

No, the Web is still the biggest deal any of us will likely see in this lifetime. So regardless what the stock market and news reports say, the Web will eventually be a blockbuster success.

Here’s why:

First of all, old media has good reason to report enthusiastically on the death of the dot-com — even if it’s not entirely true. See, the dot-com demise makes great copy for newspaper articles and TV news segments. I’m a newsman myself (chuckle), so I know.

Truth is, we media types are always looking for something new and unexpected to tell you. A few years ago, it was great fun to write endless copy about the Spice Girls and wealthy dot-commers. Now we’re all about boy bands and disappearing Web companies. You see what I’m getting at? Our patience with a topic is mercilessly short — and we spin on a dime. Thank God Gore lost the election. At least now we’ve got something fresh to report on.

While we’re on the subject, did I mention we also love tragedy and impending doom (can you say Y2K)? As long as it’s not our own doom, that is. Old media is deeply afraid that the Web will mean the end to its monopoly on setting public opinion. After our brief (and clearly misguided) flirtation with Internet boosterism, we’d love to see the whole digital thing crash and burn. At least then we’ll still have jobs.

However, the Web is not going to go quietly into the night. Yes, Web companies have been vanishing right and left — more than one per day since late last year. Desperation sure seems to be in the air.

But do the math: At his final meeting with shareholders last week, outgoing CEO Tim Koogle reminded the nervous throng that Internet use is estimated to grow to nearly 1 billion users by 2005 (from last year’s count of 400 million).

Think about that number for second. A billion users. That’s nearly everyone on Earth who can afford to pay for electricity and a decent e-mail account.

To be fair, the Web’s problem isn’t users; usage rates have been growing steadily for years. The problem is profitability. For example, you may have heard that online advertising doesn’t work very well. According to Nielsen/Net ratings, the click-through rate of Web banner ads clocks in at an anemic .5 percent.

However, as bravely pointed out last week, banner ads — the Web’s most prevalent form of advertising — are probably no less effective than TV or print ads. In fact, the horrible response to Web advertising may simply mean that advertising itself is flawed.

“If the first direct measurement of consumer response to advertising yields results this poor,” notes Suck’s Tim Cavanaugh (writing under the pseudonym La Vache Qui Rit), “can’t we just as easily conclude advertising itself doesn’t work?”

So the cat’s out of the bag. Advertising rarely works. Unless, of course, someone already wants the product. And, God bless them — Web marketers are doing more than anyone else to figure out what the people want. They have to … only on the Web is advertising held up to such a high standard of proof.

And as Web advertising improves, so will the results. Permission-based marketing — where Web users “opt-in” for e-mail offers in product areas they are truly interested in — are already showing success rates as high as 40 percent. Take that, old media.

But the real reason the Web is going to succeed is simple: It’s still fun. Anyone with a cable modem knows it.

Wired young people know it (a recent Arbitron study revealed that Internet users between the ages of 12 and 24 would give up TV before they pulled the plug on their Web access). Heck, I’m still having fun online. Which is more than I can say about any form of old media.

And it’s only going to get better. As technology improves and connection speeds increase, we’ll get full-length movies on demand, Web radio on cell phones and in cars, brand-new delights we haven’t even thought of yet.

Here’s the rub: All of this will take time. It’s just not going to happen as fast as we were led to believe by all the media pundits. And people don’t like to wait, especially news reporters and stock analysts.

So while everyone else writes off the Web, this is your in. Buy stock in Web companies, because they’re a bargain right now. If it helps, pretend it’s 1995. Or better yet, form your own Internet start-up. Funding is a bit scarce, but so is the competition.

The Web boom may be over. But stick around. The real Internet explosion is about to begin.

Adam Druckman writes about the wired world for Metro Times. E-mail [email protected]
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