Business in Vancouver: News that works for you

    Thar's gold in that thar 'Net--and it's not exactly in the places where you might have expected it

    by Alan Zisman (c) 1995 First published in Business in Vancouver ,  Issue #302  August 8, 1995 High Tech Office  column

    Whenever there's been a gold rush, a few prospectors--usually the ones who got there early--have made a bundle. Hearing about it, hordes descended upon the goldfields, only to find all the best territory already staked out. They rarely made much money.

    At each gold rush, there was always another group, which never struck it rich as dramatically as the initial prospectors, but generally did just fine, thank you. These were the people who, rather than going prospecting themselves, sold supplies to the prospectors.

    The Internet mania of the past year or two has much in common with any of the classic gold rushes. Companies are being urged to drop everything and head for the 'Net, for fear that their competitors will strike it rich and that they'll be left behind. But no one's striking it rich selling on the 'Net--companies offering products for sale report lots of window shoppers, but not many actual sales. Still, several categories of businesses are doing just fine as a result of all this hype. One class of small business that's seeing a dramatic growth is the Internet provider.

    As recently as two years ago, getting onto the Internet was pretty much limited to university students hooked into the campus computer, and people with connections to a few large businesses with networks that were on-line. Now the bulk of the action comes from smaller, local service providers: a Unix computer, a bunch of rented phone lines, a high-speed hookup to the Internet, and you too can go into business.

    This business is expected to double over the next year or so, although I wouldn't be surprised to see a shakeup of the industry fairly soon, with a few medium-sized local companies surviving.

    The service providers need specialized hardware and software, and the companies that can provide these are also doing fine. Where not too long ago, there was a real sense that the high-end PowerMacs and Pentiums were going to push the Unix boxes right off the market, Unix has been revitalized as a platform for Internet providers. Network hardware providers, high-speed modem manufacturers--all are getting a boost from the 'Net prospectors.

    The Internet has had a long tradition of free software. Mosaic, the program that jump-started the current mania, was developed at the University of Illinois' National Center for SuperComputing Applications, and given away free. The current favourite Web browser, Netscape, is still given away free by the commercial company of the same name.

    But in order to use its best features, such as the security vital for future commercial transactions, users need to log on to a Web page running on a Netscape server, and that software costs $5,000. And when you get onto that Web site, you may find that the free content comes to you complete with advertising. Check out Wired magazine's HotWired site ( ads run along the headers and footers of the Web pages. The advertisers are getting a piece of the peculiar demographics of people cruising the 'Net--male, well-educated, relatively affluent--and those Web sites with the foresight to sell ads are turning a profit.

    ISDN digital phone links, which carry a lot more data a lot more quickly than ordinary phone lines, have for years been a solution in search of a problem--technically superior, but without a crying need to answer. Now the Internet is creating a demand for ISDN links. Is there an investment opportunity here?

    Finally, in order to get your company onto the 'Net, you'll probably end up making use of the new industry of Web consultants. For a fee, they'll help you design your Web pages and handle the dirty work of translating your documents into the Web's HTML language.

    Most of the companies profiting from 'Net mania are small, providing their various services on what is often a local level. Then again, Levi Strauss started out selling canvas tents to California's prospectors.

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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan