Issue No 10

19 March 1997


Bill Gates thinks India has software prospects.

Bill promised Indians on a recent visit that Microsoft would help India build the infrastructure needed to develop its software potential. "To be a leader in the digital economy of the 21st century, India must invest in basic infrastructure, education, and information technology," Gates said. "These are the tools which will drive the country into the future and make India an economic and software superpower."

"We are working with some experts to extend Windows to Hindi and other languages," Gates said. India's software industry, which reported sales worth $1.2 billion in 1995-96 (April-March), expects to grow by 50 percent to $1.8 billion in 1996-97.

Non US Online Advertising

In 1996 non US online advertising was estimated at $6.1 million or 1.5 percent of the world total. Jupiter Research notes that of advertising revenues outside of the US. Japan, UK., Germany and the Netherlands had the most developed online ad markets in 1996. Japan led all non-U.S. markets in 1996 with over $1.7 million in ad revenue, with the UK, Germany and the Netherlands with about $1 million each.

By 2000, Germany and Japan will lead non-U.S. markets with over $200 million in ad spending each. The UK, Australia / New Zealand, and all of Scandinavia will follow with over $50 million each.


US Online Newspapers

According to a report more than a third of online newspapers made money last year, a figure that reflects the moneymaking potential of Web-based advertising. The survey also said 24 percent of the online newspapers run by traditional media companies expect to be profitable within four years.

Of those surveyed: 75% said their Web site contained classified advertising, 52% reported having a standard size for banner ads, 65% reported having a separate new-media staff -- and of those with a separate new-media staff, 84% report that the new-media staff help to design/produce banner ads for advertisers.

US Demographics

A new survey from SRI International reveals some interesting US demographic figures. Of the 27.6 million adults and 6.3 million children in the US using commercial on-line services only a quarter spend an hour or more on-line during a typical day. Some 65 percent of Internet users are frustrated by the Internet's slowness.

Both frequent and infrequent users are frustrated, and 45 percent say they would explore the Web more if it were faster. In 15.7 percent of U.S. households a new home PC has been bought within the past year. About 24% of computer households now have more than one PC, with many of the second PCs being purchased for children. The survey also indicated that U.S. adults using the Internet are more affluent and better educated than the U.S. population average.

More than 65% of Internet users have household incomes of $50,000 or more, compared with 35% of the U.S. population and more than 75% of Internet users have attended college, as opposed to 46% of the total U.S. population.

Insurance still a risky buy.

A Computer Sciences Corp. survey found that the majority of consumers are not ready to buy insurance over the Internet. Eighty-five percent of the 1,000 people interviewed said that they had good relationships with their insurance agents and that they valued the human contact. CSC points out that the Net can be a means for cutting the cost of insurance policies and that price is the deciding factor in insurance buying decisions.

Online Shopping

A survey from NFO Interactive predicts that growth in 1997 will have an effect on traditional retail and direct mail outlets. Fifty-five percent of on-line and Internet households participating in the survey made purchases via the Internet during 1996, with 89% of on-line holiday shoppers indicating that they were pleased with their on-line shopping experience, and 58% planning to do more in 1997.

The most popular items purchased by on-line shoppers were PC software (53%), books (37%), and CD's/tapes (30%). Other items purchased include PC hardware, airline tickets, clothes, and consumer electronics.


EDI Vs the Internet

EDI stands for Electronic Data Interchange. It permits the transfer of business documents between computers. This requires that the sender and receiver have a standard document format for transfers.

EDI has been in place for over 10 yrs. EDI is a fast, inexpensive, and safe method of sending purchase orders, invoices, shipping notices, receiving advices, and other frequently used business documents. Car manufacturers use EDI to transmit large, complex engineering designs. Multinational firms use EDI to communicate between locations. And universities use EDI to exchange transcripts quickly.

So will the Internet supersede it. Not for a while. The very large players have made the expensive commitment to setting up the software and establishing the agreements to trade with suppliers and resellers. The cost of paper and paper processing is incredibly high compared to a properly implemented EDI program.

RJR Nabisco estimates that processing a paper purchase order costs the company $70. Processing an EDI purchase order reduces the cost to a mere 93 cents. The quick transfer of business documents and marked decrease in errors allow you to do business faster and more efficient. . It can cut weeks from the order fulfilment cycle and ensures that product is always on the shelf.

Some large companies tend to stop doing business with companies who don't comply with EDI. The result of this is a limited group of people you can do business with. The Internet is chaotic, formless but dramatically cheap. The formulation of protocols, document interface and systems on the Internet will allow small business to take advantage of the dramatic savings in cost between the electronic way of doing business and the cost of the paper trail that currently exists


Public Relations firms very pleased with Internet

E-mailing media releases direct to journalists and media disseminators has created opportunities for news-sharing that are unprecedented Companies already exist that specialise in helping other companies use Email to distribute and disseminate information to various audiences using Email as the sole method of delivery. It's environmentally friendly.

In the real world the glossy cover and the expensive graphics are expensive. It may immediately hit the rubbish bin. Wasted printing and expense. In e-mail. The receiver can file it easily, press delete and a number of little digits meet their demise. No real cost to either party. Or they can request the glossy version with a likelihood that every post out will have a result.

Who share the spoils - Travel industry on the net.

For many business the Internet is a different distribution channel with a dramatic reduction in costs. Who gets the benefit? The customer by way of the total savings being reflected in the lower price? Will the savings be split between the provider i.e. Airline and the Agent, in say the travel business? In the US the full-service travel agency gets a 10 percent commission from the airline.

But book your flight through a full-service travel agency on the Internet, and the agency may get just 5 percent for its trouble. Is the difference represent the greater efficiency of online commerce, or are airlines using the move to the Internet a way for Airlines to add to the bottom line in a new is it simply a way medium in which the rules aren't yet written? Watch out how derived margins surface in other industries.

On-line investing.

The plumbing is in place. The standards are almost here. Most large US brokerages have a Web presence already, or will soon. A Forrester Research survey of 50 investment firms showed 44 of them planned to offer Internet account access in 1997. So will it quickly supplant the current way of buying financial products.
It may but only when the change to a totally electronic system is finalised. The Internet offers faster up to the second updates not just for the broker but also for the customer. Its possible to feed live updates into the customers portfolio on their PC. You can collaborate in investment societies or in a closed usenet group and get the benefit of good advice.

The software and broker training and awareness are the current barriers to uptake of investment services.

Grab your e-mail then board the plane

San Francisco Airport now provides four notebook computers with all but their keyboards shrouded in protective Plexiglass are lodged in a small at one of their check in gates for that last minute email. Travellers can check e-mail, browse the Internet, send a fax, visit most major on-line services, such as America Online, or view travel information.

``We think it compares favourably to a pay phone. It's free the first time you log on, then it's $2.50 for the first 10 minutes, and $2 every 10 minutes after that,'' says Howard Zack, president of QuickATM Corp., the eight-person Berkeley, Calif., company installing the kiosks. Each unit averages 60 users a day, half for e-mail.

The ethereal Office

A new $US49 product from Farallon Communications Inc. of Alameda, Calif., promises the next best thing to face-to-face contact - a virtual office on the Web. Called Netopia Virtual Office ``The product is for colleagues to collaborate and is for SOHO workers who don't have the greatest technology infrastructure,'' says Allan Lefkof, Farallon president and chief executive.

Netopia Virtual Office begins by creating your personal Web page in the image of familiar office metaphors such as an inbox/outbox, messaging, conferencing, and chat. Using passwords, you choose which features to put under lock and key. A marketing manager can leave a new sales pitch in his or her private outbox for sales reps to study. Or you can chat in real time with colleagues in their virtual offices.

Payrolls over the Internet.

Virtual Payroll, Inc. claims to be the first payroll service provider to offer its services exclusively over the Internet They will also provide direct deposit, electronic tax filing services, and easy access to payroll reports for any size business.

The product has the ability to download management reports and paystubs, and the exclusive use of the Internet to send and receive payroll data. "Most payroll service providers receive their client's input by phone, fax, or client-server," said Rey Monzon, president of Virtual Payroll. "We intend to leapfrog those methods and provide a direct link to our clients via the Internet."

The advantages of doing payroll over the Internet include a much lower cost, high quality processing, full featured services, an easy to use system, instant data retrieval, and total client control of input. Small business who cannot afford high bureau charges, those in rural areas, and those wishing to cut costs are the main targets for the marketing of the product.

AT&T and Mondex electronic cash for the Internet

The big players show their hand. AT&T is launching a solution that will make "micropayments" -- under $10 -- commercially viable on the World Wide Web using the Mondex electronic cash platform and using Mondex chip card technology. This will make Internet micropayments attractive for both merchants and consumers. Mondex is currently the only system that enables the direct transfer of electronic cash between cards.

The cash value is transferred immediately without centrally routing and collecting each point-of-sale transaction, making it the most cost-effective electronic cash system for merchants and card issuers. "Transaction costs make low-value Internet sales too expensive for merchants to accept using traditional payment methods like credit cards," said Keith Kendrick, senior vice president-smart payments, AT&T Universal Card Services. "But Mondex on the World Wide Web changes all that.

While Mondex also works for large transactions, it makes sales as low as a few cents commercially viable for merchants." AT&T will test its Internet Mondex solution with selected on-line merchants beginning in the summer of 1997. Upon completion of a successful trial, AT&T expects to integrate Mondex payment services with its SecureBuy Service beginning in the first half of 1998


New shoes for old businesses.

The Internet has been in it's commercially useful state for a mere three years. At the same stage of development people were working out how to greet others on the telephone and the telegraph replaced the pony express for short messages.

The Internet ran for about 12 years as a place that scientists and academics could exchange information, chat to one another and update documents.

It's to remembered that the Internet is merely a conduit for the digital age. The real event is the digitising of the economy. The Internet simply makes this change more possible, cheaper, widespread and commercially viable.

Some speculations.

Stepping up from the box brownie.

You took your film to the chemist and they processed it. You went to the mall and they did it in an hour. You put it in the post and it came back in an envelope.

What say you post and a little later get e-mail asking you to drop by an Internet site and your pictures are on there in digital form. Download the best, delete the rest.

One step more. Click your digital camera, download it to the PC which then prints it on glossy paper. By Internet you can load it to a web site, send it attached e-mail to your granny, a modelling agency, add to your online CV or send it to a dating agency.

This is then the final solution to the slide show. Instead of locking the relatives in a darkened room after the Christmas dinner you can tell them by e-mail to check out the photo album on line.

So new businesses are set up and old ones wither. Selling the software for the albums, the scanning services to capture all the photo images are growth areas.

Losers may be the chemical companies making developing fluid, the makers of those complicated developing machines in the Malls. The first printer with an option for glossy photo printing will do well. Transforming digitally captured images into glossy output has been the meat and drink of the printing industry for a while now.

When price of digital cameras hits the retail magic number of $69.95 its a whole new industry.

The Public Typist - aka - Business Bureau.

A stern woman sat guarding the clanking typewriter and for a fee documents could be transformed from scratchy pen scrawl to pristine typed pages all neatly laid out according to the style manual handed down from Queen Victoria's time.

Later came photocopying, fax services, binding, typesetting, and as many business services and could be drafted under one roof as possible. The first digital steps were the computer and the fact you could get your copy on disk and do some minor modifications yourself.

More digital would be to send your Dictaphone tape by courier to the bureau. The stenographer captures it digitally and the file is sent attached e-mail back to your computer ready for a final window dressing. Or it could be put up on the Internet for a bit more instructions, placing pictures or diagrams.

The next step is the taking of your recorded input directly on the Internet to your office secretary wherever they may be. At that point you have a virtual office but with a human lurking in there someplace. With voice recognition working in a few years the stenographer may simply do the layout and interpret the tricky bits. It will present opportunities for the cabin bound stenographer in Alaska or the Alice Springs business bureau to compete in the same arena.

The music shop

The winner of the Newspaper the Australian contest for the best use of the Internet was the do it yourself CD.

Simply e-mail or select from an Internet site the songs you would like on your "best of" collection. The supplier collects your selection from the digitised archives and they are burnt into the CD for dispatch to your eager hands.

Its all to do with capturing the product digitally and delivering it by Internet or on CD.

Lets view dinner.

Capturing the menu's of a city restaurants and co-ordinating the delivery of the meals means that you could off a real choice of Al la carte dining to your dinner guests. From the Internet select which courses from which restaurants each prefers. The deliverer picks up the two tandooris, three Italian delights and the deserts from the chocolate palace. You serve the wine.

Really ready to wear.

Clothes designers might not be restricted to selling their wares in Paris or in the closed circles of the ready to wear markets of 42 St. A designer might make offers to Brazil, Malaysia, Madrid. All that is required is the ability to three dimensionally depict the garment as finally worn, elaborated with text, comment and make up instructions. Patterns can be printed at locations world wide.

The essence of this new business service is capturing information digitally and turning into a real event and adding value. A picture, a document, your favourite tunes, a dinner and the latest dress from Brazil.