Today the Internet is already a mature medium, despite its newcomer status. It is certainly the technology area with the most significant and explosive growth ever. In 1998 and 1999, the Internet’s economic im-pact on the U.S. economy was clearly proven just by the amount of venture capital invested in Internet companies and by the number of successful Internet company IPOs launched. By early 1999, Internet IPOs had dominated the stock market, creating another round of young
bil-lionaires, not unlike the software boom decades earlier. By late 1999, it was the dot-coms that moved “offline,” dominating the airwaves, fe-verishly snapping up television time, and grabbing national magazine and newspaper space to launch their fledgling brands. By 2000, the success of the dot-coms had started to dwindle. Many merged and many more failed, but not before the Internet had permanently become part of the fabric of American business.
The Internet is very serious business, and it is an unavoidable fact of business life. A recent study by IT research firm Forrester Research (www.forrester.com) said that 98% of large businesses (more than 1,000 employees) and 45% of small businesses (less than 100 employees) will do business online by 2002.
A landmark study done by the NEC Research Institute (www.neci.nec.com) in early 1999 put the number of individual Web pages at some 800 million, with 3 million added each day. The pre-dicted rate of Web page growth is phenomenal, perhaps 1,000% over the next few years, yet the NEC Research Institute study indicated that even the most comprehensive Web search engines combined covered no more than 42% of indexed pages. That is one good reason that Internet information access services are growing at such a rapid rate. Businesses that never would have existed before the Internet are now springing up to help online visitors find what they are really looking for on the Net.
There has never been a time when a mass medium has held such potential. The Internet is more accessible to more people globally than any other medium except television. Web sites and e-mail newsletters are for the most part free.
With all this, however, there are still significant challenges facing the Internet. One of the greatest of these may be the privacy issue. With the mass adoption of external e-mail by consumers and businesses alike, this “private” one-to-one communication quickly became another pro-motional channel for IT marketers. It was not long before unsolicited e-mailings (“spamming”) were commonplace.
Now, the heat is very much on those who do not respect an individual’s privacy on the Internet. For example, the Direct Marketing Association (www.the-dma.org) launched an electronic media privacy program in 1998, encouraging organizations that use the Internet for direct marketing to post a privacy policy prominently on their Web sites.
In February and March 2000, the Federal Trade Commission (www.ftc.gov) conducted a survey of commercial sites’ information
prac-tices, using a random sample of 335 Web sites, in addition to “most popular sites”—91 of the 100 busiest U.S. commercial Web sites. The survey found the following:
• In the random sample, 88% post at least one privacy disclosure and 100% of the most popular sites post at least one privacy disclosure.
• In analyzing these disclosures in light of the fair information prac-tice principles of Noprac-tice, Choice, Access, and Security, the per-centage drops dramatically. Only 20% of the random sample sites that collect personal identifying information, and 42% of the most popular sites, implement, at least in part, all four fair informa-tion practice principles.
• The commission also looked at the number of companies enrolled in the primary industry self-regulatory initiative, online privacy seal programs. The survey found that 8% of the random sample, and 45% of the most popular sites, display a privacy seal.
The survey led the Federal Trade Commission to conclude that pri-vacy self-regulation alone would not suffice. As a result, the commis-sion recommended that Congress enact legislation that will help to ensure adequate protection of consumer privacy online.
This, of course, is only the federal perspective. There are states that have already adopted legislation that restricts unsolicited e-mail and protects consumer privacy. This increasingly strict regulatory environ-ment should be taken into consideration by every b-to-b marketer.
No less daunting is the technology of the Internet itself and access to it. On the service side, major telecommunications and cable compa-nies have already entered the Internet Service Provider (ISP) market.
AT&T, WorldCom, and Sprint provide Internet access services, as do all of the Regional Bell Operating Companies. Communications giants are lining up to compete in the massive Internet market. AT&T and cable leader TCI merged in 1998 so that AT&T could offer cable mo-dem service. WorldCom integrated its former UUNET division to make WorldCom the world’s largest business ISP. The Internet access alterna-tives available to businesses and consumers are proliferating, as are the ways access can be provided. Internet access over both telephone and
cable connections is commonplace. It’s only a matter of time before Internet access is bundled with electric service. The end result will be the same: the massification of the Internet.
One of the biggest concerns has been the bandwidth associated with delivering Internet service. As more people sign up for Internet access and actively use the Internet to conduct business, the Internet can be-come choked with traffic. The demand for bandwidth rises exponen-tially, but even the bandwidth problem is on the way to being alleviated.
Massive technological improvements are being made to the Internet in-frastructure by leading networking companies.
Innovations are coming from all sides. Most cable companies are becoming broadband enabled. Broadband is basically Internet access over cable, and it is feeding hungry Internet users with electronic infor-mation at blazingly fast speeds. Broadband is one significant advance, but it is not the only way that consumers and businesses are getting high-speed Internet feeds. Through faster ISDN (Integrated Services Digital Network) connections running over ordinary phone lines, and with the new higher-speed modems that are hitting the market every day, fast access will be a diminishing problem for even the smallest busi-nesses. ISDN is fast being replaced by ADSL (Asymmetric Digital Sub-scriber Line). Telecommunications and cable companies alike are introducing DSL rapidly throughout the United States, targeting both business and home use with the hope that DSL will be the killer Internet access application. That is because DSL can share phone lines, using modems that are 50 times faster than conventional modems.
DSL and other technologies mean that Internet access soon will be a utility. People will not even need to think about turning it on and off, because it will be like the telephone, cable television, and electricity.
Lately, talk is about the “second Internet,” an industrial-strength Net that may be only a few years away.
Infrastructures are being built today that are expected to solidify the Internet economy and make it a global reality. And those infrastruc-tures may not even be underground. Cisco Systems, the leading manu-facturer of networking devices, introduced a wireless Internet in the year 2000. The company planned to offer Internet connections up to ten times faster than DSL via low-frequency microwave transmission.
Even today, wireless connections to the Internet via cellular phones and PDAs are possible, and although Europe and Asia are on the
lead-ing edge of wireless, this market is expected to grow rapidly over the next several years in the United States. eMarketer, reporting the results of a 2001 study by the Universal Mobile Telecommunications Systems Forum, says mobile Internet access subscriptions in North America will grow from just over 2 million in 2005 to 18 million by 2010.