by Dana Blankenhorn
Volume IV, No. XXV
For the Week of June 19, 2000

This Week's Clue: Won't Get Fooled Again

This Week's Clue: Won't Get Fooled Again

SSP (Shameless Self Promotion)

Microsoft isn't the Monopoly to Fear

TV Man Fights the Web 

Bottom Fishing

Clued-in, Clueless

The last cut of their classic album (they made them of vinyl in those days, kids) "Who's Next" may be one of the most telling in the history of rock. Peter Townsend writes that " the parting on the left are now parting on the right " and he "won't get fooled again," by getting involved or even caring.

For the most part a generation has stayed true to that call. Defenses of cynicism and libertarianism let us ignore (or buy) politicians, sticking them on a short leash of middle-class pay that means they have to either be corrupt, fanatic, or already rich. "Poor man want to be rich, rich man want to be king, and a king ain't satisfied until he rules everything." As I said at the top, rock suits alienation perfectly.

The Internet is the perfect alternate universe for this alienated generation. Government interference is just another technical glitch we route around. The power is easy to fight - with hacking, with viruses, or just some Metallica MP3 files. Do you want to flame someone, abuse someone , or destroy someone by remote control? It's all possible, right here, right now

This libertarian paradise is now meeting up with political reality. There are bad people out there - especially as you extend the Net to authoritarian nations whose governments hate ours. There are crooks and child abusers among us. Some order is called for. And our refusal to get involved in creating that order is creating cures worse than the disease, like the No Electronic Theft Act . This one would put you away for good if you download "illegal" MP3 files. 

And everywhere you look in Washington these days high-tech libertarianism is being rolled. We're being rolled on sales tax , on Internet telephony , on privacy , and on all other rights (supposedly) guaranteed by the U.S. Constitution . (By the way, this is a worldwide phenomenon ).

What's lacking from the debate are some principles (preferably set to a back beat). I don't write music, but here are some principles that might start a decent libretto.

These, I think, are principles worth fighting for, and they will be fought for, because governments that ignore these principles in the age of the Internet will find themselves under cyber-attack from all directions. 

As members of the Internet community it's our duty to help our fellow citizens and our governments understand and abide by these principles. The failure to follow them will cause real pain to real people over the next 20 years (or more). How long that goes on depends on our ability and willingness to clue-in the clueless, and their ability and willingness to adapt to cyber-reality. 

What this means is we no longer have a choice about being involved in the world, including the political world. Our presence in this medium involves us. When we realize that the battle begins. 

SSP (Shameless Self-Promotion)

At the end of this month I'll be appearing in New York, covering the ClickZ Marketing Strategies 2000 conference . If you need to become Clued-in, the speakers at this show can help.

I'm still making myself available for consulting to a limited number of clients, with an eye toward assuring their long-term success. If you're interested give me a shout at 404-373-7634.

Also, please pass this along to friends and urge them to join our list. And don't forget our new e-mail address .

I write daily for ClickZ, and weekly at Andover.News. I write monthly for  NetMarketing, Boardwatch, and  Intellectual Capital. I've been in Advertising Age and the Chicago Tribune .Once every other month I'm in CLEC Magazine. You can always buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's journalism that keeps the Clues coming...

Takes on the News

Microsoft isn't the Monopoly to Fear

Microsoft has everyone talking about monopoly, but they're a piker next to MCI Worldcomm, especially when you add in Sprint and consider the area of consumer access.

By acting through large re-sellers MCI has made itself not just the #1 consumer access provider, but it has achieved market dominance comparable to that of Microsoft in operating systems. Everyone talks about America Online's dominance in this area, but it's just a re-seller. MCI handles the service, and has since AOL bought CompuServe. MCI's UUNet unit also handles this chore for the Microsoft Network, and for most of the free ISPs.

As usual Forbes has the story wrong . Sprint - which MCI is buying - holds an option to take all of Earthlink, and already has the largest stake in the so-called #2 ISP. That's the story. Combine MCI and Sprint, get behind the re-sale contracts, and take a look at the real story. No, the real story wouldn't look good through your ideological blinders, but it's the blinders that are the problem, not this analysis.

TV Man Fights the Web

John McCain is the Adlai Stevenson of our time. Just as Stevenson was widely admired but unsuited to TV, the high tech of his time, so McCain is great on TV but unsuited to the Web.

This is scary because McCain's committee handles most Internet issues. His first principle is to avoid lawmaking if possible, so he's planning on sitting on the medium's concerns for the rest of this year while courts make it clear Congress is vital in areas like spam .

McCain is also ignorant of the limited reach government has in this medium. He supported the Communications Decency Act and told voters this year he still supports regulation of Internet content along broadcast lines . The sooner we take the halo off the man from Arizona, the better.

McCain believes government shouldn't interfere with the market, but ignores the fact that government action is sometimes necessary for the market to work. This is especially true when someone finds himself with a choke point in the marketplace that they did not earn and have not paid for. The current effort by real estate owners to shake down wireless companies is a fine example. Ignoring the shakedown limits consumer choice by preventing the construction of alternative networks. Only the law can negotiate a settlement and enable the market to make building owners richer.

Bottom Fishing

You know a market has hit bottom when smart people start picking up some bargains. We've hit bottom.

Look most closely at the prices being paid for viable companies with real cash flow, and you can see the intelligence at work among the buyers. CMGI got MediaBridge for $268 million in stock, giving its Engage online ad unit an offline component. TMP Worldwide's Monster.Com also got a bargain in buying Simpatix, which offers recruiting software using an ASP model.

What does it take to be worth buying? You need positive cash flow and a big upside. Without it you're not real, just reel . That's why market dilettantes like Nickelodeon (the late RedRocket) and Disney (the late Toysmart) have simply shut the doors. And As for that little sock-puppet's $3 million "acquisition" of Petstore.Com , look at the increased stake of Discovery.Com -- it's really just a little life raft for two.

Clued-in, Clueless

Clued-in is eToys, which bought eParties last week for just $1.6 million . This is a company that deserves to survive the shakeout. (It's good that they got a life preserver .)

Clueless is Judge Eleanor Shockett of Miami-Dade County, who accepted arguments making it open season on Internet anonymity in civil courts . This decision will do dramatic damage to the First Amendment. Tossing that principle for commercial convenience is a violation of her oath of office. Internet users would be wise to start their recall petitions circulating now.

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