January 10, 2002
Leading historian Francis Fukuyama wrote in 1989, on the eve of the fall
of the Berlin Wall, that we had reached the end of history. Events may have
tarnished his theory, but as 10 years of economic boom started, the
business of predicting the future took off. When the Internet came to the
fore in the mid-1990s, the predictions business just got bigger and bigger.
So here's a little review of some of the predictions made so far for the
interactive economy. 'Adventure capitalist' Esther Dyson said in the last
NMA of 2001 (20 December) that we should expect more paid-for content
online this year. Well, er, yes. Given that only the top 10 most popular
sites in any market you care to name get about 80% of the ad revenue, that
means no more free lunch for users of the other 90% of sites. The
alternative is closure or a slash in costs for those advertising-based
sites. Hell, even Yahoo! is madly running around looking for alternative
business models, like - bizarrely - consultancy.
She also said online marketing would hold its own in a results-obsessed
recession. Sure, but this would be happier news if the whole marketing
industry hadn't already been cut in half and clients weren't so cowardly -
a point almost made by i-level's Charlie Dobres. So take that one with a
grain of salt.
Simon Murdoch of Episode 1 Partners said VCs would shrink back to pre- 1997
levels and that it's all a waiting game now until things pick up. Julia
Meyer of Ariadne Capital echoed this sentiment. Of course,
this is hardly a prediction, more a reasoned assessment. What few VCs will
countenance is the idea, put about by a handful of industry people, that we
may be heading for another bubble in less than 18 months' time. While it
seems laughable to even consider such a thing, it's worth remembering that
the Internet business has been through a cycle of several mini bubbles
since 1995.
The difference is that today we have broadband and 2.5G mobile phones added
to the mix. Prior to 2000, the price of oil was cheap - a time we have
reached once again following the events of 11 September. Well, perhaps it's
worth keeping just half an eye on that little prediction.
Also in NMA, Bertelsmann's Dr Klaus Eirhoff pointed to the growth of
subscription-based file sharing services like Napster and multi-channel
retailing. Again, good assessment but not a prediction.
Dr Ian Kearns of the IPPR said government will lead the drive towards a
more secure online (for who, them or us?) and more content services. He
neglected to mention that with an ailing transport infrastructure, an NHS
on the verge of collapse, and costly foreign wars, it seems doubtful they
will be subsidising the broadband roll-out.
So much for living in glass houses. As for chucking a few stones myself,
alas there isn't the space this week. Suffice it to say I'll be outlining
why 3G will come to mean gambling, gaming and girls, and why the BBC should
launch its own instant messaging software in future, prescient, columns.
Copyright 2002 Centaur Communications Ltd.
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