Net May Reach Huddled Masses, Maybe Even Some in Montana

Executives of multinational corporations and the leaders of rich countries love globalization--almost as much as they love traveling to conferences in Davos, Switzerland, to listen to America Online’s Steve Case and Amazon.com’s Jeff Bezos proclaim the Internet to be the greatest equalizer of all time. Everyone on Earth will enjoy a higher standard of living sometime between now and when Amazon achieves profitability, no doubt. Or perhaps even as soon as the next millennium.

The insufferable Nortel Networks TV commercial may capture the message best. Set to a plodding rendition of the Beatles classic “Come Together,” it asks Asian peasants and other have-nots, “What do you want the Internet to be?”

Yet somehow the economic benefits of globalization, Internet style, have mostly accrued to the likes of AT&T;, Yahoo, AOL, Microsoft and a handful of other giants moving rapidly to capture foreign markets. No wonder their executives’ remarks might sound to some like a hostile takeover dressed up as technological progressivism.

Cross-cultural chatter among Web surfers from Vladivostok to Cape Town to Guatemala City is a hopeful sign for human communication. But I’ve often wondered how those individuals will ever make a buck off newfound friendships with Internet talkers in San Jose, New York, Austin and other magnets for Web-based wealth in the global village.

Sunnyvale, Calif.-based start-up Elance.com offers a hint at an answer. Elance positions itself as a global market for the buying and selling of freelance services that can be delivered online. It features computer work, of course, but also vacation planning, marketing, legal and medical advice, custom love poems, and feng shui (the practice, invented in ancient China, of harnessing or balancing “life energies” in a home or work space to promote health, prosperity and harmony).

Co-founder and Chief Executive Beerud Sheth said the site has registered users in 140 countries; 40% of transactions are cross-border and 40% of users are from outside the United States.

Take Tatiana Korablina, proprietor of Tatiana’s Place in Russia. For $150 she connects Western men to Russian women, screening out “gold diggers, prostitutes and undesirables,” she says. Tatiana, who claims several impressive-sounding language-related diplomas, also offers English-Russian translation services to fall back on--at 6 cents a word, considerably below the rate charged by many U.S.-based services.

Tatiana and thousands like her are attempting to tap into the lucrative, labor-strapped and--until recently, for small foreign entrepreneurs--inaccessible U.S. market.

Elance features reverse auctions: Buyers post notices of jobs they want done, and service providers bid on the jobs. Buyers weigh providers’ experience and skill and may not accept the low bid. Jobs have sold at prices from $5 to $500,000.

Users provide feedback on their experience of each transaction--similar to online auctioneer EBay’s approach--creating a public record designed to build trust.

“We’re making geography irrelevant in the buying and selling of service,” Sheth said.

He overstates the case, but the combination of online speed and convenience, network-based peer review and competitive bidding offers the potential for a kind of globalization that doesn’t require a few hundred million dollars to get started. And given the increasingly panicked tone from businesses that can’t find anyone to hire in today’s superheated economy, the potential seems real indeed.

To be sure, the fledgling service is far from attaining an EBay-like critical mass that would create a genuine network effect. Elance could easily fail or be absorbed like so many other fledging e-commerce sites. For starters, competitors with overlapping services (such as Aquent.com, Niku.com and Guru.com) are adding Web-based business tools, and that’s not even taking into account Yahoo Careers and Monster.com, two potential category killers. In addition, if Elance does have a lead in internationalization, bigger competitors will not ignore a ripe market.

And peer-review rating systems work great when you’re selling old comic books on EBay. But Laurie Orlov, a Forrester Research analyst, views Elance’s approach with skepticism.

“How likely are people to evaluate services in public forums where their opinions are viewable” and therefore subject to legal action if they are negative? she asked.

There also are limits to trust. It’s one thing to hire a Bangladeshi Web designer; transnational medical advice would entail a monumentally greater leap of faith.

Yet Elance has drawn attention from the godfathers of Silicon Valley. John Doerr and Joe Lacob, partners at the venture-capital firm Kleiner, Perkins, Caufield & Byers joined the Elance board last week and tossed $12 million into the company’s coffers. It’s worth noting that Doerr and Lacob have guessed right on Amazon.com, Netscape, Excite@Home, Healtheon/WebMD and Intuit, among other tech titans.

But even if Elance fails, its concept seems sure to catch at least a moderate wave. If so, some analysts believe that cyber-globalization could exert downward pressure on this country’s wage rates as freelancers in Russia or China increasingly undercut U.S. competitors.

Such fears seem unfounded in the foreseeable future because the online world has yet to solve a nagging problem: Most businesses--even the most far-flung and technologically sophisticated--still value face time. Most buyers still prefer to see to see the whites of contractors’ eyes, at least once in a while.

I’d guess that freelancers in the highest-priced, most supply-constrained fields (read: technology workers) may be affected by international competition the most.

And it won’t be just the Russians who cash in. Rumor has it that a few small fry in such far-away places as Nebraska and Montana and Maine are developing computer skills. If an Elance-style economy develops, it might just drive up wage rates in such remote areas--not to mention the inner cities--that have so far missed the high-tech gravy train.

That’s what I call a meaningful contribution to closing the digital divide. And it might even help make honest men out of Case and Bezos.

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Times staff writer Charles Piller can be reached at charles.piller@latimes.com.