THE CUTTING EDGE: SPECIAL REPORT / HOT TIPS : What’s Coming, When, and Why It’s a Big Deal : Next Year Could Bring Start of On-Line Profits
If 1993 was the year businesses figured out what the Internet was and 1994 the year they learned how to use it, 1995 will be the year corporations actually make some money on the global computer network. With the emphasis on some .
Electronic commerce--currently crude and not yet secure--will come of age next year as entrepreneurial firms such as Vienna, Va.-based Cybercash and Mountain View-based Netscape Communications team up with banking heavyweights the likes of Wells Fargo and Bank of America to ensure secure transactions.
By early in the first quarter of ‘95, analysts expect consumers will be able to make purchases over the network without exposing their credit card numbers--a turning point in the evolution of the Internet that will lead to perhaps 30,000 electronic “storefronts” opening by year’s end--a tenfold increase over the current number.
The volume of traffic over the World Wide Web portion of the Internet, which allows for graphics display and audio, is expected to catch up with and exceed fax traffic in 1995.
At the same time, federal law enforcement officials are getting ready for a wave of digital terrorism far more sophisticated than anything the teen-age “hacker” has wrought, as corporations and whole nations begin to engage in on-line espionage.
With the added capability of digital cash and credit transactions, the Internet increasingly will compete with major commercial on-line services, which will be forced to lower prices and reorient their core businesses. Experts differ, however, as to just how they will be reshaped.
Most look for increasing integration of the services into the Internet itself and, via new cable modems that will be available to consumers beginning next year, over the cable network. The commercial services together have about 5 million subscribers now; by the end of next year several forecasts have that number more than doubling.
The largest, Prodigy Services Co. with 2.3 million members, has made the deepest forays into the cable industry and is expected to offer its service over several systems in 1995. America Online, the fastest-growing service, aims to leverage its experience with the less technically literate consumer to reposition itself as a friendly Internet access provider and a packager of on-line entertainment and information.
All the major services will come out with new user interfaces, which will likely incorporate the language of the World Wide Web--an acknowledgment that they must be compatible with the broader Internet, whose user base is expected to reach 45 million, in order to be competitive.
Still, some analysts say, that will not be enough.
“In 1995 we’ll see the death knell of commercial services like CompuServe,” said Michael Strangelove, publisher of the Internet Business Journal.
Microsoft’s sally into the on-line services business will dramatically affect the year for everyone else. The Microsoft Network, packaged with a new version of Windows, is expected to wreak havoc with the structure of the on-line services industry. But most do not expect to see it until late in 1995. Interchange, the on-line service developed by Ziff-Davis before it was sold, may or may not materialize, depending on whether it finds a buyer.
And the degree to which business prospers on-line anywhere ultimately will depend on the quality of the goods offered--and their presentation.
In the meantime, young techies may be the only ones spending their money on line.
Says Bruce Ryon, an analyst with the San Jose-based consulting firm Dataquest: “The Internet will be a great way to sell in 1995--to college kids, mostly.”
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DIGITAL SHOPPING
What: Secure electronic transactions
When: Early next year
Why it’s important: Will make the Internet safe for commerce.
