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FYI: The END of the NET

>>#: 20815 S16/International  (CIS:DTJOURNAL)
    26-Nov-98  14:03:02
Sb: The END of the NET
Fm: Roger Harrison 106220,2150

                By Tom Steinert-Threlkeld

The merger of Netscape Communications Corp. and America Online Inc. calls
into question the bedrock notion that the Internet will be an inherently
democratic medium, uncontrolled and uncontrollable by any central

That was the promise of the World Wide Web as it burst upon the
consciousness of the world's computer users in 1994 and thereafter. Anyone
with a computer became a publisher, and the sheer number of participants
meant -- and still means -- that the Internet will become the preferred
medium for discord, discontent, underground action and communication
between parties of all kinds of ideological, political, cultural and
entertainment persuasions.

But what the absorption of Netscape by AOL tells us is this: The Web is not
immune to the normal forces of consolidation that almost inevitably bring
"efficiency" and uniformity to new media and new industries. Indeed, the
only thing different about the Web is that the opportunity -- a new
trillion-dollar-plus worldwide economy in four or five more years -- is of
such a large scale that the consolidation is occurring at warp speed, the
Web's typical pace. 

For the great mass of consumers, the Web will not look that different from
prior communications media. A handful of well-known brands will determine
the nature and content of the majority of what is seen and heard on a daily

Yes, there will be more splintering. Broadcast television has bid farewell
to the days of three dominant networks. Cable television still is
gravitating toward scores of channels. And the Web always will have
thousands, and even millions, of media outlets. 

But the high-traffic, commercially viable sites increasingly will come into
the hands of a few. Why can AOL pay $4.2 billion for Netscape and not even
feel the sting? Because it is playing with unreal money. Its stock has
picked up more than $20 billion of value in the past few months. To spend
$4 billion of newfound value to leapfrog past Yahoo! Inc., now worth $21
billion itself, to become the biggest portal site on the planet is a
no-brainer -- especially when the future of electronic commerce is at stake
and the chance to wrap up pole position on the consumer side comes into the

What you're seeing is nothing different, really, than what has happened in
any number of more prosaic industries in the two centuries or so of the
American free enterprise experiment. Mom-and-pop stores give way to
regional and national chains; then, someone emerges to become the category
killer that sets a pace that everyone else must match, or they will become
commercially extinct. 

It's the tale of Wal-Mart Stores Inc. in discount retailing or Blockbuster
Entertainment in the video rental business. Sure, there always will be new
players and lots of players. But there always will be a defining player.
And that leader won't change that often, no matter how "democratic" the
rest of the industry looks. 

AOL has made it clear that it intends to define the Web, for better or
worse. Its reach now will extend to 70 percent of American Web users every
month. How the Web will react bears close watching. 

There will be many sites and individuals that  fight day-in and day-out to
provide the Web fierce independence and individualism. But, the game has
now changed, irrevocably.  The number of players who will have more than $1
million per day in profit flowing into their coffers just from online
businesses -- $1 million per day to further their Web ambitions -- will be,
for the foreseeable future, counted on one hand. 

Indeed, one finger. 

That finger is tagged: America Online Inc.