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January 2000, Week 2 -- If Everybody's Shopping on the Web, How Come it's so Hard to Park?

 

 
Will Rogers

 

   Normally I resist the siren call to make predictions at the start of a new year. After all the chances of being right are slim, the chance of looking like an idiot, great. But once every thousand years I indulge myself. This will be about e-commerce. I thought it might be worth a few words.

   As the cowboy comedian Will Rogers put it many years ago: "It's always risky to make predictions, especially about the future." The following will be more in the line of observations about the madness of crowds and the speed of the technological revolution, which is not nearly as fast as everybody seems to think.

   It was the mail that started me thinking. I get 50-60 press releases a day. That's well over a thousand messages a month from companies wanting attention for some product, process or service. All of them feel they should be featured prominently in this column. Since only a handful will ever be mentioned at all, and some not favorably, many are disappointed. But there is a trend in all this.

 

 

   Most of the current clamor concerns e-commerce. In fact, we recently did a count and found that more than 95 percent of the mail had to do with selling something on the worldwide web. An observer from Mars would reasonably conclude that nearly all the commercial activity of this planet takes place through electronic transactions on the Internet. Yet when I go out, the stores are all occupied with active businesses, the parking lots are filled with cars. If we're all sitting home doing business on the Internet, how come there's so much traffic?

   In fact, the amount of business done over the Internet is an extremely tiny fraction of commercial activity, barely a footnote. Yet it currently receives enormous attention. Almost every news journal I pick up has stories about the wonders of e-commerce. Two weeks ago TIME magazine devoted most of its coverage to the topic, and a picture of Jeff Bezos, the founder of Amazon.com, graced the cover. Why is all this attention being devoted to what is close to a fringe activity? It's because it's slightly different, that's all. As Samuel Johnson noted more than two centuries ago: "All the world is mad for novelty, and people speak of little else." And I'm sure he wasn't the first to make this observation.

 

   What does it all mean, as any prophet worth his salt might ask. It probably means we're looking at the top of the trend, that's what, and it's likely to be all downhill from here. At least, temporarily.

 

   A lot of people aren't going to like that conclusion. I don't particularly like it myself. But I'm not here to wave another banner in the parade, I'm just making some observations. It is the nature of news organizations that they only report what's happened. A trend has to have already taken hold to be worth noting, or be called a trend in the first place. For something to be considered a significant trend, a certain amount of baggage has to have been strewn along the road. It must reach critical mass, a physicist would say. Of course then it blows up.

 

   For news magazines like TIME, Fortune, Business Week, etc., which require time to muster enough facts to document a trend, and then face a lag in publication as well, the acknowledgement of a major trend is almost always late, often spectacularly late. This is so well known to stock market traders and speculators, for instance, that the appearance of a company or executive on the cover of a major publication is often considered a contrary indicator and they will make their financial play in the opposite direction. Many such cover stories have become famous for marking the top or bottom of trends, the publication usually appearing within days or weeks of the turning point. Several magazines in August of 1982 questioned whether the stock market could ever recover from its depressed state, and concluded there was little hope. That month marked the beginning of the longest bull market in U.S. history.

 

   So if we look at the present mania for e-commerce, the record of history has not been kind. Every innovation has been assured to change our lives forever. When airplanes became practical, many publications assured us we would all have a personal plane in our backyard some day, ferrying us quickly to and from work. Automobiles would be guided along highways by buried cables that controlled their movements and took us safely to our destination while we slept or watched television. The television would be on our wristwatch, of course.

 

It's not that these things were not technologically possible. They were possible. They just weren't feasible. High costs, inefficiency and inertia all said it wasn't going to happen soon, if ever. So to, I think people will shop in stores for many decades to come; they'll still want to handle the merchandise.

 

   Perhaps it's worth recalling a few other forecasts for our future. At the turn of the last century the Washington Post confidently predicted that we would travel between cities on trains moving 600 miles per hour. Earlier in the 19th century the London Times pointed out that no train could ever go above 20 miles an hour, since at such great speeds the air would go by too fast for passengers to breathe. Well informed businessmen at the turn of the 20th century predicted the telephone would serve no useful purpose, and the President of the United States publicly agreed! Well into this century the New York Times predicted that no rocket, no matter how powerful, could ever leave the Earth, because it would have nothing to push against as it went up. Prediction is a risky business, as I said to somebody recently over my satellite phone.

 

   Readers can browse more than three years of columns at the On Computers web site: www.oncomp.com. Bob Schwabach can be reached by e-mail at bobschwab@oncomp.com or bobschwab@aol.com.