Pure Net is no sure bet

Commercial real estate broker Mitchell Wolff chose Charles Schwab & Co. over E*Trade Group as his online stock service not because Schwab had better rates or an easier interface.

Commercial real estate broker Mitchell Wolff chose Charles Schwab & Co. over E*Trade Group as his online stock service not because Schwab had better rates or an easier interface. He signed up with Schwab because he could bitch. If something went wrong with a trade or he had some other complaint about his account, he could just swing downstairs in his Lincoln Center office complex in New York and toss verbal volleys at a real live counter agent.

On the one hand, Wolff's choice is an example of the coming wave of what Krishnan Menhon of USWeb/CKS calls the "dot bam" enterprises, which will sweep through e-tailing with a vengeance. These are the traditional "brick and mortar" retailers that are finally awakening to the potential of the Net. Not more than four months ago, Target's online department store was a joke. Now, Dayton Hudson, the parent company, is getting serious.

The smartest of these retailers figured out that they have a distinct advantage, not disadvantage, that they should exploit: the people and storefronts they have invested in for years.

It was a distinction wholly lost on Barnes & Noble, which failed to integrate its popular neighborhood book megastores with its online business. It let Amazon.com become the earth's biggest bookstore, while it still was the earth's most aggressive bookstore chain. It could offer online visitors same-day pickup of books. But did it? No.

But what Wolff's choice more importantly foreshadows is the day in the not-too-distant future when there will be no distinction between Net companies and "traditional" companies. The day of the pure Net company is ending. Within another three years, five at the outside, it'll be impossible to make the distinction between a Net company and a non-Net company. Every organization of any size will have figured out what parts of its operation it has to adapt to the Net to survive or thrive. Businesses that still expect to be in business all will have integrated their operations with the Web for receiving orders, communicating with suppliers and fulfilling customers' requests.

At that point, it will be wholly unremarkable to be a Net company. In a way, the massive impact of the Net has made it inevitable that it will fade into the background.

Look at it this way: When telephones came along, did we make distinctions between Telephone Companies and "traditional" corporations? Maybe. But we certainly don't now. To be without a telephone is to be out of business. When computers came along, did we make distinctions between Computer Companies and those without? For a while. But by the end of the '70s, the digital machines were beginning to become just part of the scenery in companies of all sizes.

So it will be with the Net. All companies will be online. Two-way communications via digital packets that can be text, voices, video or graphics will be routine. And some companies will be more successful at selling on the Web, and others will be more successful selling off the Web. A handful will be great at both.

But no one will not be a Net company. And those that try to stay pure Net companies may wind up at a disadvantage, not an advantage. Let me know what you think in the talkback below.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All