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By Miguel Fiol
Posted Monday, December 6, 2004

As if the Nasdaq news weren't bad enough, Forrester Research (FORR) said most Internet retailers would be out of business by 2001. Retailers find themselves being forced from the market by depleting bank accounts and saturated markets. The story quoted Mark Doll, a consultant for startup companies at Ernst & Young, who said, "There are 30,000 e-tailers out there, and probably 25,000 will have to go away."

While alarming to many, this consolidation serves as a fundamental benchmark to change. Or a wake-up call for your company. The scope of the countryside is changing, not only in focus but in infrastructure and applications. So how are companies who find themselves pinched in the saturated landscape suppose to survive, much less thrive? A look at the future of the Internet should provide some insight.

VoIP - Voice-over Internet Protocol (VoIP) is a simple idea: utilize the inexpensive infrastructure of the Internet to create a convergence of voice and data. Already, you can make free long distance phone calls on the web via or Soon, you'll actually be able to call the Internet from any telephone and ask for website information, stocks, weather, make reservations, etc. The system searches the Net for the information you seek and reads it back to you in a calm, friendly voice. While both fast emerging industries, VoIP will not achieve critical mass until a few kinks are worked out.

For long distance, the unreliability of the Internet and the instability of browsers and applications are concerns. Consumers will likely still be willing to pay 5 cents a minute for something they KNOW always works the way they need it to. We've used telephones all our lives and that will be difficult to change especially if it sacrifices reliability. For voice portals, the question is not only who wants to surf the net on a phone but of the security issues involved. V-commerce or Voice commerce will likely replace e-commerce but, again, the bugs are in need of innovation but the implications are tremendous. Imagine asking your database a question while conferencing with a partner on your mobile phone. Or visitng a website and asking product questions or ordering.

WAP - Wirless Application Protocol (WAP) is the standard language developed by the WAP Forum (a consortium of major telecommunications, Internet and software companies) to bring the Internet onto wireless devices such as smart phones and Personal Digital Assistants (PDA). WAP is the language used to convert HTML websites into sites that are viewable on the small, text-only screens now available on most mobile phones. While still in its infancy, great strides are being made in infrastructure, quality, security and applications. International Data Corporation has even predicted that there will be more wireless web subcriptions than PC Internet subscriptions by 2003. It is further believed that at some point after that, the PC will simply become a peripheral to the PDA or phone.

Services, not products - With the emergence of Application Service Providers or ASP's and the downfall of the e-tailer, it is becoming increasingly clear that the Internet will primarily provide services and applications in three areas: information, entertainment and communications.

Despite its flaws, the Internet still serves as the best way to find and collect information on any topic. Currently, this is the primary use of the Web, but for entertainment, we still rent videos or turn on the TV, for communications, we still pick up the phone.

In communications, the growth of VoIP, v-commerce and wireless Internet technologies will ultimately pull us into using the Internet as our primary source of communication. For entertainment, the Internet already offers gaming, streaming video and downloadable audio, but these suffer from slow download times and Internet, application or browser bugs. Yet, higher bandwidth and broadband will ultimately make them as smooth and quick as a broadcast signal. Further, with the merger of AOL and Time-Warner along with the proliferation of cable modems and set top boxes, the Internet will consume a greater chunk of the entertainment pie. On demand movies, games, music, even Internet "television" shows will rival networks, video stores, satellite TV, merchandise, etc.

Simply understanding the emerging trends in technology can be a competitive advantage. But building that knowledge and further applying it to your strategy, website or company can help you adjust, position and succed in the changing, chaotic landscape.

About the Author
Miguel Fiol is the founder of F&A, Inc. in Minneapolis, MN. F&A, Inc. is an "idea factory" or consulting firm which specializes in the development and servicing of ideas.


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