After the gold rush

Why the predictions of a crib-death for the Web when its vital signs are strong?

By Scott Rosenberg

Published October 4, 1996 11:53AM (EDT)

The '90s high-tech market rides a boom-bust rollercoaster. First with CD-ROMs and then with interactive television, we have learned to recognize the arc -- from media infatuation through marketplace speculation to mockery and meltdown.

These cycles taught us that every hyping carries an equal and opposite trashing. That the same pundits who boost a new technology on the way up will kick it on its way down. And that reality is whatever's left after all the columnists' opinions have cancelled one another out and all the get-rich-quick investors have sold out and gone home.

Then the World Wide Web came along, fueled by a particularly heady brew of futuristic hucksterism. The naive quickly bought into the hilarious notion of "the information superhighway" (a label so meaningless it was easily ripped off the never-marketed "set-top box" of interactive TV and plastered onto the Internet). But experienced observers, conditioned by their previous stomach-churning rides, jerked their knees skeptically: The Web was too slow and too geeky; it could never become a mass medium.

Astonishingly, at least some of the hype, this time around, came true. The Web was an open platform, a magnet for creativity, an engine of change. It caused old institutions like Microsoft to tremble and new businesses to materialize out of thin air. Still in its infancy, it grew with spectacular speed.

But now, something in the ineffable, illogical dynamic of the media and the markets seems to be changing. The rollercoaster pauses before a plunge; the prospect of the death of the Web comes into view.

Over on the Well, the hard-core media mavens are asking questions like "Is the Web dying?" and "The coming Web shakeout -- is it coming at all?" On C|Net, a cover story titled "Net Apocalypse" outlines four Net-doom scenarios -- of traffic overload, address shortages, cyberterrorist attacks or a "millennium bug" crippling computers on the eve of the year 2000.

The next couple of months are sure to bring a torrent of "Death of the Web" headlines, so here at Salon we thought we'd beat the crowd. Actually, Wired magazine was first out of the gate, with Chip Bayers' April '96 "The Great Web Wipeout" -- a mock Time cover story dated Jan., 1997, which reported widespread Net gridlock and the closing of most commercial Web sites. But that satire seems less funny and more wan after the collapse last week of Wired's own initial public stock offering.

Before you take any Web obituary seriously, you need to ask whose Web is being memorialized: The investor's bonanza? the direct-marketer's paradise? the libertarian's "friction-free marketplace"? or the populist's hoedown? The Web is too many things to too many people to pass away gently; it will have to die an awful lot of deaths before it stops twitching and clicking.

If coverage of the Web tends to extremes of hype and gloom, the best we can do is inoculate ourselves with frequent doses of perspective. What we need is an interpreter, a kind of Java applet of the mind, to monitor the torrent of headlines and parse them for meaning, context and relevance -- so that the next time some publication screams, "The Web is dead!" we can make sense of the claim.

Here's what such an analysis might have revealed over the past week:

Oct. 25: Time Warner New Media Chief Quits -- Paul Sagan, Time Warner's new media boss, steps down, ostensibly to spend more quality time with his family. Pathfinder, the corporation's Web mega-site, is reportedly losing more than $30 million a year.

What's really going on:
Time Warner is the archetypal merger-spawned media empire. The online medium is one area in which such companies assume they can find "synergy" among their many "properties." So instead of building separate Web sites for each of its popular magazine titles and letting them find their own voices in the new medium, Time Warner built a single home page for Time, People, Entertainment Weekly, Sports Illustrated and the rest of its publications -- as if what mattered to readers was who owned the magazines, and not what was in them.

Ugly, off-putting and monstrously unusable -- a wilderness of pushbuttons and bars and ads -- Pathfinder is a case-study in how not to use the Web. When it closes up shop, as it is likely to do, somebody's sure to proclaim the death of the Web. Don't buy it. All it will mean is that one company, having made some colossal mistakes, decided to cut its losses.

Pathfinder is merely the latest in a long line of expensive corporate missteps on the Net -- from Rupert Murdoch's escapades with Delphi to America Online's purchase, repurposing and now dismantling of Global Network Navigator. At industry conferences, speakers will often depict the Web as a big money-hole. But these companies continue to dig their own ditches.

Oct. 25: Wired Ventures Cancels IPO --
Wired withdraws its second attempt this year to raise money in the public markets, after two reductions in the price of its stock fail to lure investors to the hip but unprofitable company.

What's really going on:

About a year ago this time, after the spectacular ride of Netscape's stock, a lot of people began to see gold in them thar Internet hills. Wired, which had pioneered independent Web publishing with HotWired, decided to try to cash in. But it never succeeded in persuading Wall Street to view it as a technology company that might qualify to participate in the Net boom -- rather than simply a publishing house with a lot of digital cachet.

With cutbacks or a possible buyout looming, Wired now stands humbled. And you can bet that its troubles will become fodder for Web obits that will turn the magazine's rhetoric against itself ("Wired=Tired"). But any equation of Wired's troubles with wider Web woes is a stretch; one high-profile IPO failure fed by delusions of media-empire grandeur on a single publisher's part hardly portends the death of a medium.

What the Wired story will become is a benchmark for the end of Wall Street's infatuation with anything Internet-related. It turns out that you can't simply chant "Internet" three times and make investors do your bidding. That can only be healthy in the long run.

Oct. 28-29: Microsoft and Intel Unveil NetPC Plans; Sun Introduces the Javastation Network Computer -- Competing alliances are rushing to market with their latest twist on desktop technology -- a stripped down "network computer" (NC) that's cheaper and easier to maintain than traditional PCs. Sun and its allies hope the NC will help them unseat industry leader Microsoft; Microsoft responds with its own version of its competitors' idea.

What's really going on:

The network-computer saga is a fascinating illustration of the Mobius-strip-like dynamics of the technology industry. The biggest problem with the Internet today for the consumer, everybody knows, is that you can't just plug it in, turn it on and surf. So when Oracle CEO Larry Ellison last year proposed an "Internet appliance" computer that would be $500 cheap and easy to use, people got excited.

Now it turns out that the NC isn't aimed at the home at all; it's a $1000 box for corporate managers to cut costs with, and its real purpose is to help Oracle and Sun in their ongoing battle with Bill Gates, who first pooh-poohed the NC idea and has now (surprise!) copied it.

The NC may or may not wrest a few points of market share away from Microsoft, and may or may not help shave some red ink off of some corporate balance sheets. What it plainly won't do is change anyone's world.

Meanwhile, in an entirely different arena, Sony and Panasonic are both now selling WebTV boxes that fit what was supposed to be the NC niche: They're genuine consumer appliances that are truly cheap ($300 plus a monthly fee) and easy to use. They sit on top of your TV and feed Web content onto your TV screen over a fast modem, bypassing the computer completely. WebTV still has a way to go, but it's here and it works surprisingly well. It's hard to take predictions of the Web's mortality seriously until a product as promising as this has a chance to prove itself.

Oct. 29: America Online Unveils New Pricing Plan -- After insisting for years that it would never give up the hourly charges that have provided it with the largest revenue stream in the business, AOL finally offers its users a $20-a-month flat rate. AOL will also give you access to its content for $10 a month if you already get your Net access from someone else.

What's really going on:
AOL's announcement marks the final death-knell for the old model of the proprietary online service. Like Prodigy and the Microsoft Network, AOL is now trying to reposition itself as, in effect, a truly gigantic Internet service provider with a really big Web site of its own. It just might work.

Though it may be hard for AOL to turn a profit this way, it's a shrewd move that should help the service hold on to more of its subscribers. They now have little reason to leave AOL for cheaper flat-rate local Internet providers -- that is, assuming AOL can provide more reliable, responsive and speedier service.

AOL's decision got less press than Microsoft's transformation into an "Internet company" this year, but it's just as momentous. AOL was the final holdout against the Web; now everyone in the online universe accepts the Web and its related technologies as common ground. The merging of AOL and the Web will bring the Web closer than ever before to mass-market size. It's a sign not of death but of adaptable life.

Nov. 1: Voyager Plans Staff Cuts, Suspension of CD-ROM Publishing -- The trade press reports that the leading publisher of creatively ambitious CD-ROMs will leave the business and return to its original, profitable line of videophile laserdiscs. Rumors of possible buyouts fly.

What's really going on:
When the CD-ROM publishing boom was in full swing three or four years ago, Voyager won awards and led the industry. It's still the only company to produce consistently interesting, worthwhile "multimedia." But it was never able to make much money in the business -- whether because of CEO Bob Stein's determination to subsidize unprofitable but intellectually adventurous projects, or simply because the entire CD-ROM marketplace never took off.

The lesson here for the Web is that high-quality publishing can only survive on its own merits for so long; sooner or later, somebody has to start making money. Right now the Web is flush with ambitious original ventures like Hotwired, Slate and Salon; they could all go the way of Voyager unless they figure out how to transform users' attention into dollars -- whether through advertising, as most sites hope to, or through subscription, as Slate keeps promising to try.

That even Slate -- backed by Microsoft's fortune and technology -- hasn't yet dared test its readers' loyalty by slapping on a subscription fee is a sign of just how daunting this step remains. Microsoft blames the delays on billing bugs. But it's hard to believe that, if everyone at Slate were gung-ho to start charging, the most successful software company in the world couldn't make billing work in a hurry.

Nov. 1: British Telecom Announces Plan to Purchase MCI for $20 Billion -- As C|Net reported it: "The combined company, to be called Concert, will have sales of $42 billion, 183,000 employees, and 43 million customers in 72 countries. The global giant will provide long distance and local phone service, wireless phone connections, Internet access, videoconferencing, and multimedia services, among other offerings."

What's really going on:

A story like this reminds us that the growth of the Web is taking place in one small corner of a much larger picture of telecommunications deregulation and globalization. We stand only at the beginning of a long, accelerating spiral toward what technologists call "increased connectivity" in the form of digital telephony, wireless communications of various kinds and other developments we can't even imagine.

Just as the rise of the online world is beginning to force change upon older media like TV, radio and print (as those media in turn changed their predecessors), the Web will inevitably change as other technologies leapfrog it. Still, the arrival of each new medium has never meant the death of the ones that preceded it. Even if the Web finds itself forced into a niche by some whizzier, more profitable network that supplants it next year or next decade, it's unlikely to disappear. Too many people and companies have put too much of themselves into it.

The biggest cliché in the book of online-industry wisdom is that old consultant's standby: Define your goals. That's what executives are always told to do before entering the uncharted Web waters. The funny thing is, the Web itself has no defined goals. We don't yet know something as basic as whether it's primarily a publishing or a communications medium — or some novel hybrid.

As a result, two very different groups are emerging with different ideas of how to drive the Web forward: call them the information peddlers and the community builders. The former see the Web as a conduit to distribute information and sell products on a few-to-many pattern; the latter see it as a place to exchange information, many-to-many — to yak.

The information peddlers are certainly getting better at what they do. When the New York Times and the Wall Street Journal launched Web sites they didn't repeat Time Warner's mistakes (the Times, for instance, didn't wrap its home page together with the Boston Globe's simply because it owns the paper), and both papers have made provision for interactive forums. Users are still unhappy with the experience of reading on screen, and rightly so; the you-can't-take-it-to-the-bathroom argument remains irrefutable. But screens will continue to improve, eyestrain will fade and sooner or later — in 20 years if not in five — we will have a portable electronic document reader that puts these complaints to rest.

Digital publishers also dislike the Web's "browsing" model, in which users go out and get information rather than waiting for publishers to ship it to them. Thus the rise of a whole wave of "push" technologies like Pointcast or Marimba's Castanet, which deliver customized information at regular intervals to your desktop. "Push" is convenient all right, but it sacrifices one of the Web's great strengths: Today, when people come to a Web page, the odds are good that they want to be there — that they're interested in the material. With "push" delivery, people may request a service, but who knows how much attention they're paying? Anyone who's ever subscribed to an e-mail list and then let the messages pile up unread in his mailbox will understand how quickly "push" can come to shovel.

The other development information-peddlers welcome is the arrival of easy, high-bandwidth Net access. Whether you get it through your TV cable, as @Home plans, or through faster phone or digital connections, the result will be the same: better, faster video and audio on the Web. Once the Web looks and sounds as good as TV, the argument goes, it will become as profitable as TV. The trouble is, the more you make the Web like TV, the less reason people have to leave their TVs for the Web.

To the community builders, the Web's most important trait is not that it's digital or that it's multimedia but that it's two-way. They see it as a platform for distributing personality as well as information. For years now they've worked at a disadvantage, since the people who invented the Web were in fact scientists who wanted to share research information. As a result, the Web has only laboriously adapted itself to chat and conferencing. That it has done so at all is a tribute to the strength of the desire to connect, commune, gossip and quarrel.

Now we're on the threshold of a boom in new, graphical chat rooms — like the Palace, Worlds Away, Worlds Chat and V-Chat — where people can play around with sound and pictures as well as words. The new version of the VRML standard for three-dimensional Web worlds finally allows for avatars, little iconic projections of the self onto the screen; and when the VRMLites and the Java coders put their heads together, you can expect some amazing innovations.

Three-dimensional worlds will attract a lot of energy at first, through novelty alone. But in the long run, they will survive only if they can make the technology less clumsy, give people reasons to contribute and make it possible for those contributions to last over time. Right now these worlds are stuck in a rut of "Where are you now?" pleasantries, which is all that their awkwardness and anonymity allow.

Inevitably, the most exciting places to be on the Web are those where the information peddlers and the community builders are working together. That's one reason so many different companies are busy launching sites devoted to specific cities and regions. The Web may be world-wide, but communities tend to be local. Sites like CitySearch, AOL's Digital Cities, Yahoo and Microsoft's Cityscape aim to peddle useful local information like events listings and restaurant guides while building communities of local interest — supporting it all, logically, by selling classified ads. It's a promising idea. It also places them in direct competition with local newspaper sites, and they will quickly learn what newspaper people already know — that high-quality local information is expensive to produce.

Howard Rheingold's soon-to-launch Electric Minds is a different kind of experiment at yoking information and community, more international and cerebral, closer in spirit to existing Web magazines like Feed and Salon but with a more determined emphasis on connecting professionally written articles with open-mike discussions. If Electric Minds' forums on technology can whittle down the distance between the Web 'zine and the Web bulletin board — which will require breaking down barriers that are both technological and psychological — it will be a site to watch.

Neither Electric Minds nor most of the other producers of original Web content aim for an audience on the scale of TV. The Web remains a "niche market," with anywhere from 5 to 10 million regular users, depending on whose numbers you believe, and no one knows whether it will ever evolve into a true mass medium. If it doesn't, though, that's no reason to close up shop — unless your business plan requires a TV-sized audience.

Nonetheless, the Web's health is directly tied to the number of people plugged into it. As Netscape founder Marc Andreessen likes to put it, "Every time a new user arrives, the whole Net gets more valuable to everyone on it." Considering how important such numbers are, it remains remarkably difficult to nail them down. There is, at least, a small cadre of Internet demographers like Donna Hoffman and Tom Novak who are doing the important spadework of figuring out just who is on the Web — and how we can measure where they are. If the Web does start to ail, they'll be the first to know.

The Web is the great mutant baby of the technology industry; look at the pundits' forecasts from, say, 1990, and it's nowhere on anyone's horizon. As it grows, it continues to mutate in ways that are sometimes disturbing and sometimes wonderful. As for reports of its death, they remain, as Mark Twain would have said, greatly exaggerated. A thousand separate dreams of what the Web might become will unfold over the next few years, and almost as many will fade. But the Web itself can't and won't die until the number of people connected to it begins to drop — and that day is nowhere in sight.

Links to sites mentioned:

C|Net's "Web Apocalypse" piece

Wired's "The Great Web Wipeout"


Global Network Navigator





The Palace

Worlds Away

Worlds Chat


Electric Minds

Donna Hoffman and Tom Novak's Project 2000

Scott Rosenberg

Salon co-founder Scott Rosenberg is director of He is the author of "Say Everything" and Dreaming in Code and blogs at

MORE FROM Scott Rosenberg

Related Topics ------------------------------------------