[12046] in Commercialization & Privatization of the Internet
The internet will kill us
daemon@ATHENA.MIT.EDU (Tom Limoncelli)
Tue May 3 08:16:39 1994
To: com-priv@psi.com
From: tom_limoncelli@warren.mentorg.com (Tom Limoncelli)
Date: 26 Apr 1994 07:59:36 -0400
The internet will end our ecomomy as we know it as soon as digital cash
is accepted and purchases can be made via the internet. It will bring
all competition down to price. With sufficient purchasing automation,
it won't make sense to have a contract with a single supplier that
averages the cheapest. Instead you can order each individual item from
whomever is cheapest at that moment. Don't worry about all the
paperwork from having 15 suppliers rather than 1, DigiCash handles all
of that for you.
Think about it:
Run Mosaic 6.12. Go to the Global-Super-WAIS query screen and search
through the index for "Office Supplies, Pens". Click on it.
Now new fields appear and you enter information about exactly what you
want, what color, what quality, felt or ball.
Click "search best price".
In 2 seconds you are told the best price, displayed a picture of it,
and you click on "Purchase now".
Office World, Staples, Boise Cascade, even the tiny self-owned office
supply store around the corner all make their serious money by becoming
the sole supplier for large companies and local businesses. Sure some
of their prices are low, but some of them are not... that's where they
make their profit. They lock you in.
These major "single supplier contracts" are what keeps most large
companies in business.
DigiCash will change that. There would be little incentive to make
such a contract and consumers would demand "best price per item" and
would buy wherever WWW tells them that best price is.
When you can only compete on price (because all other factors are the
same) you are now in the "Commodity Market". The problem with selling
a commodity product is that you reduce your profit to just barely what
it takes to get by.
Cars, stereos, floor wax, makeup, soap, food, videos, etc. You name
it. If all of these things turned into commodity items, our current
economic models would stop functioning. Storefronts would rarely be
able to compete against a warehouse with a T3 line and an automated
shipping system. Massive layoffs as salespeople are no longer needed.
...and our economy would be ruined.
Just a totally pesimistic thought for the morning,
-Tom
--
Tom Limoncelli -- tal@warren.mentorg.com (work) -- tal@plts.org (play)
"Psst! Hey, Anthony! Y'know what I | Disclaimer: I do not
like about existing?" "Uh... uh... what?" | speak for Mentor Graphics.
"Possessing a physical extension." -TSA |
