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NetMarketing
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Marketing in the Internet - as seen from Italy


by Giancarlo Livraghi

gian@gandalf.it



No. 9 - September 30, 1997
1. Editorial: Below the radar
2. The New Economy: a networked world
3. To count or not to count
4. Large low-density countries
5. China and India
6. More numbers...
7. Hosts and Domains: the meaning of a tren
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1. Editorial: Below the radar
Kevin Kelly (I quoted an interview of his in the last issue of Netmarketing and I shall quote one of his articles in this one) has an effective metaphor for one of the key points in today's culture, choked by a gloat of information that is too often conventional and repetitive.

He says: A good rule of thumb for detecting real news is to track a fast-moving object that zooms below the radar of mainstream media.

This is one of the values of the net. It's not the only tool to track those low-flying, fast-moving objects that often are much more interesting than the front-page "news" in newspapers or the statements of "official" or dominating culture, including the "wisdom" of many universities. All good information systems have always had the ability to discover the non-obvious, to detect "microsignals" that reveal newborn trends, to hear the whispers that carry more information than the loud echo of the same old noise. But the net, if used ingeniously, can be a very effective tool for such research; and available to people and organizations that can't afford complex and sophisticated information systems.

What has this to do with marketing? someone might ask. A great deal, I think; for two reasons.

The first is that a key factor of success is to understand culture, trends, attitudes - to detect and understand relevant information before our competitors notice it.

The second is that tracking what is "different" can often be a winning tool: especially if "different" is not just a quirk but the seed of something that will grow.

This type of perception is especially useful for companies that don't have a dominating position in the market and need to find a "niche" or a new trend that the larger competitors, busy as they are holding their ground, don't have the time to understand and nurture.

But it's not irrelevant for big companies, either, because if they protect their positions statically and lose sight of trends and changes they can be left behind and lose the ground they though they could control. The history of marketing (and not only of marketing) is full of examples: of those that "miss the bus", with consequences than can be quite dramatic; and those that catch it before everyone else and force the rest to chase, sometimes panting heavily.

This is one more reason why we should not perceive the net (and generally the information system) as static and even, not try to apply to a new tool our old concepts and habits, but use it's complexity and constant change to stimulate innovation and catch opportunities. As anything that needs a change of pace and habit, this is not easy; but the rewards can well be worth the effort.

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2. The New Economy: a "networked world"
In the September issue of Wired there was a long article by Kevin Kelly, titled New Rules for the New Economy, that (as any exploration of a new environment) may be debatable; but, I think, offers some very interesting insights. Some explain known things in a new perspective; others open new and unexplored horizons.

The Digital Revolution - he says - gets all the headlines these days. But turning slowly beneath the fast-forward turbulence, steadily driving the gyrating circles of cool technogadgets and gotta-haves, is a much more profound revolution: the Network Economy.

This emerging new economy represents a tectonic upheaval in our commonwealth, a social shift that reorders our lives more than mere hardware or software ever can. It has its own distinct opportunities and its own new rules. Those who play by the new rules will prosper; those who ignore them will not.

There's an easy objection. This is written by someone living in California, and part of a community that swims in the net like a fish in water and has been used for years to electronic communication as part of everyday life. Not all people, even in America (and even less in the rest of the world) live in the "networked culture" as comfortably and naturally.

But I don't think Kelly's observations are irrelevant for us "primitives". Sooner or later, in one way or another, that's where we are going. And the opportunities of the Network Economy are open to us now if we know how to find them. I explained in another issue how the "last" can become the "first"; and why these opportunities can be especially favorable for Italian companies and organizations.

The grand irony of our times is that the era of computers is over. ............. All the most promising technologies making their debut now are chiefly due to communication between computers - that is, to connections rather than to computations. And since communication is the basis of culture, fiddling at this level is indeed momentous.

............. First, wealth in this new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown. Second, the ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of networks. Third, the domestication of the unknown inevitably means abandoning the highly successful known - undoing the perfected.

Visionary? Maybe. But this type of thinking can help us to understand how inadequate, and dangerous, it can be to doze off to the lullaby of old habits - or even new.

The Network Economy is not the end of history. Given the rate of change, this economic arrangement may not endure for more than a generation or two. Once networks have saturated every space in our lives, an entirely new set of rules will take hold. Take these principles, then, as rules of thumb for the interim.

I shall try to summarize, as briefly as possible, the twelve "laws" (or principles) that, according to Kelly, set the framework for the new economy.

1. The Law of Connection: embrace dumb power

The new environment is fed by the deep resonance of two stellar bangs: the collapsing microcosm of chips and the exploding telecosm of connections.

Chips are getting smaller and cheaper all the time. We have already discussed smart cards in this newsletter; but there are even simpler, "dumb" devices, that can (and will) be in every object we make. The notion that all doors in a building should contain a computer chip seemed ludicrous 10 years ago, but now there is hardly a hotel door without a blinking, beeping chip. Soon... every package will be stamped with a disposable silicon flake that smartly tracks it contents. If an ephemeral package can have a chip, so can your chair, each book, a new coat, a basketball. There may be 200 million computers in the world, and Intel estimates that they will grow to 500 million by 2002. Yet the number of non-computer chips now pulsating in the world is 6 billion. Because they are easy and cheap to make, they can multiply to infinity.

These chips have no complex functions, no ambition of "artificial intelligence". Their tasks are "dumb", elementary, repetitive; their value is that they are connected. A tiny chip plastered inside a water tank in an Australian ranch transmits only the telegraphic message of whether it is full or not. A chip on the horn of each steer beams out his pure location, nothing more: "I'm here, I'm here". The chip in the gate at the end of the road communicates only when it was last opened... The combination of "dumb" nodes in a smart web creates an "intelligent" system; it's what our brains do with dumb neurons and what the Internet did with dumb personal computers.

2. The Law of Plenitude: more gives more

When all is connected to all, the nature of the "all" changes; and so does the value of its parts. Mathematicians have proven that the sum of a network increases as the square of the number of members. In other words, as the number of nodes increases arithmetically, the value of the network increases exponentially.

A fax machine, for instance, is worthless if there is only one. It has value when there are two, and from there on it increases geometrically: each additional fax machine sliding down the chute increases the value of all the fax machines operating before it.

In a network, the more things are connected, the greater the value of each. This flips the industrial lessons upside down. In the traditional economy, value came from scarcity. In the Network Economy, value comes from plenitude. This also reverses the price-value logic: as quantity grows, prices decrease, but value increases.

3. The Law of Exponential Value: success is nonlinear

In this newsletter we have already discussed the "logical" or "Gauss" curve, and how it relates to human behavior and economic process. As also Kelly points out, such curves are almost the definition of biological systems. .......... The Network Economy (or society) is often described more accurately in biological terms. Indeed, if the Web feels like a frontier, it's because for the first time in history we are witnessing biological growth in technological systems.

In the Network Economy we've entered the realm where virtuous circles can unfurl overnight successes. But we must be prepared for the slowness of initial growth, as well as the inevitable petering off (if not reversal) of the curve when a "saturation" level is reached or a new turbulence changes the environment.

Each individual case, each specific experience has its own "curve". But one principle applies to all: success is nonlinear.

4. The Law of Tipping Points: significance precedes momentum

Another biological insight comes handy. There is a tipping point beyond which what was pushing uphill against all odds goes rolling downhill with all odds behind it. This pattern is well known in epidemiology; but in the Network Economy it's faster. In biology, the tipping points of fatal diseases are fairly high, but in technology they seem to trigger at much lower percentages of victims or members. Also, tipping points are below the levels of industrial times; it is as if the new bugs are more contagious - and more potent. Smaller initial pools can lead to runaway dominance. Lower tipping points, in turn, mean that the threshold of significance - the period before the tipping points during which a movement, growth, or innovation must be taken seriously - is also dramatically lower than it was during the industrial age.

This brings us back to what I said in this issue's editorial: it's more important than ever to catch the early signals of "infant trends". Detecting events while they are beneath the threshold is essential.

5. The Law of Increasing Returns: make virtuous circles

The prime law of networking is known as the law of increasing returns. And that is far more than the textbook notion of economies of scale.

The development of an industrial company is linear; a network grows with the potential momentum of a biological system. The case of Silicon Valley shows how a web of relationships can grow as a whole, regardless of the destiny of individual companies. We are headed into an era when both workers and consumers will feel more loyalty to a network than to any ordinary firm. The great innovation of Silicon Valley is not the wowie-zowie hardware and software it has invented, but the social organization of its companies and, most important, the networked architecture of the region itself where everybody knows everybody else, information leaks and flows, in an interwoven network of people: a social web supported by an agile email culture.

While all members benefit from the momentum of a network, not all are equal. The nature of the law of increasing returns favors the early. The initial parameters and conventions that give a network its very power quickly freeze into unalterable standards. The solidifying standards of a network are both its blessing and its curse - a blessing because from the de facto collective agreement flows the unleashed power of increasing returns, and a curse because those who own and control the standard are disproportionately rewarded.

Rigidity is dangerous. Withdrawing later from the wrong network of relationships is painful - but not as painful as companies who bet their entire lives on the wrong one. ....... There is no future for hermetically sealed closed systems in the Network Economy. ...... It rewards schemes that allow decentralized creation and punishes those that don't. A network system is much more than just "outsourcing"; it's the creation of a web of standards where a company is seeding the system with knowledge it gives away, engaging as many participants as broadly as possible, in order to create a virtuous loop where every member's success is shared and leveraged by all.

The road to success is to nurture open systems and make virtuous circles.

6. The Law of Inverse Pricing: anticipate the cheap

In the industrial economy, mass production made it possible to offer a substantial improvement of quality with a relatively slight increase of price. But the arrival of the microprocessor flipped the price equation. In the information age, consumers quickly came to count on drastically superior quality for less price every time. The price and quality curves diverge so drastically that it sometimes seems as if the better something is, the cheaper it will cost.

Electronics led the way. Almost from their birth in 1971, microprocessors have lived in the realm of inverted prices. In an automated and networked economy this happens more and more with many other goods and services. All items that can be copied, both tangible and intangible, adhere to the law of inverted pricing and become cheaper as they improve.

At the same time, needs and opportunities multiply. Each new invention creates the opportunity and desire for two more. ....... In the Network Economy, you can count on the best getting cheaper; as it does, it opens a space around it for something that is dear. The key to maximum gain is to anticipate the cheap: to be at the starting point of the quality = quantity = low price sequence.

7. The Law of Generosity: follow the free

The high quality - low price trend slides down an asymptotic curve that falls toward the free without ever reaching it. But there's more: it can actually "reach the free", overcoming the conventional wisdom that what is given away is worthless. If services become more valuable the more plentiful they are (Law # 2), and if they cost less the better and the more valuable they become (Law #6), then the extension of that logic says that the most valuable things of all should be those that are given away.

It's happening. Microsoft gives away its Web browser, Internet Explorer. Eudora, the standard email program, is given away freeware to sell upgraded versions. Some 1 million copies of McAfee's antivirus software are given away. And, of course, Sun passed out Java gratis, sending its stock up and launching a mini-industry of Java app developers. Netscape became the leader in the browser business by deciding to give away the first 40 million copies of its only product.

This seems absurd by conventional business wisdom. But now giving away the store for free is an applauded, level-headed strategy that banks on the network's new rules. Because value appreciates in proportion to abundance, a flood of copies increases the value of all the copies. Because the more value the copies accrue, the more desirable they become, the spread of the product becomes self-fulfilling. Once the product's worth and indispensability is established, the company sells auxiliary services or upgrades, enabling it to continue its generosity and maintaining this marvelous circle.

Of course this does not mean that everything should be given away. There is a drive towards the free... that, even if not reached, makes the system behave as if it does. A very small flat rate may have the same effects as a flat-out free.

It's quite obvious that "giving away the goods" is not a generalized option for all industries and all markets. But it's an example of how important it is, in the Network Economy, to explore strategies that would have appeared absurd in a traditional environment.

8. The Law of the Allegiance: feed the web first

A network is a biological entity with an existence, and identity, of its own. The distinguishing characteristic of networks is that they have no clear center and no clear boundaries. The vital distinction between the self (us) and the nonself (them) ... becomes less meaningful in a Network Economy. As John Hagel argues, a company's primary focus in a networked world shifts from maximizing the firm's value to maximizing the value of the infrastructure whole.

Networking is not mere outsourcing, but a collective process in which knowledge is spread and shared; innovation does nor come from any point in the system, but from the network as a whole.

In every network, the rule is the same. For maximum prosperity, feed the web first.

9. The Law of Devolution: let go at the top

Biology again... The tightly linked nature of any economy, but especially of the Network Economy's ultraconnected constitution, makes it behave ecologically. The fate of individual organizations is not dependent entirely on their own merits, but also on the fate of their neighbors, their allies, their competitors, and, of course, that of the immediate environment.

Rigidity and over-adaptation are dangerous. Biologists describe the struggle of an organism to adapt in this biome as a long climb uphill, where "uphill" means greater adaptation. ..... It is easy to imagine a commercial organization substituted for the organism. A company expends great effort to move its butt uphill, or to evolve its product so that it is sitting on top, where it is maximally adapted to the consumer environment. But the environment changes; it is increasingly difficult in the Network Economy to discern what hills are higher and what summits are false. The "high ground" that a company thinks it's holding may simply not be there in a few years' time. An organization can cheer itself silly on its way to becoming the world's expert on a dead-end ecology. In biology's phrasing, it gets stuck on a local peak. The harsh news is that getting stuck is a certainty in the new economy.

Flexibility is the only answer. There is only one way out. The organism must devolve. In order to go from one high peak to another, it must go downhill first and cross a valley before climbing uphill again. It must become less adapted, less fit, less optimal.

Companies need a radical culture change to learn how to let go of something that is working and trudge downhill towards chaos. Because there can be no expertise in innovation unless there is also expertise in demolishing the ensconced. In the Network Economy, the ability to relinquish a product or occupation or industry at its peak will be priceless. Let go at the top.

10. The Law of Displacement: the net wins

Not everything can be "digitized". But even those goods that are necessarily made of "atoms", such as automobiles, are becoming lighter. A heavy car takes up room and uses energy to move itself; the trend is to reduce the weight and size of everything except what matters - the passengers. At the same time, communications systems reduce the frequency of people's "physical" movement. The interlinked system of transportation (cars, trains, airplanes) becomes an integrated element of the communication network.

The Network Economy, together with the use of technology in all sorts of things at very low cost, advances continually the process where function and service prevail over objects. In the Network Economy, the net wins. All transactions and objects will tend to obey network logic.

11. The Law of Churn: seek sustainable disequilibrium

In the industrial perspective, the economy was a machine that was to be tweaked to optimal efficiency, and, once finely tuned, maintained in productive harmony. But now the economy has come to resemble an ecology of organisms, interlinked and coevolving, constantly in flux, deeply tangled, ever expanding at its edges.

This is not just "change". Change is no stranger to the industrial economy or the embryonic information economy; Alvin Toffler coined the term "future shock" in 1970 as the sane response of humans to accelerating change. But the Network Economy has moved from change to churn. Change, even in its toxic form, is rapid difference. Churn, on the other hand, is more like the Hindu god Shiva, a creative force of destruction and genesis.

There is a need for new ways of thinking. Effective churning will be an art. In any case, promoting stability, defending productivity, and protecting success can only prolong the misery. When in doubt, churn. In the Network Economy, seek sustainable disequilibrium.

12. The Law of Inefficiencies: don't solve problems

We need to abandon the traditional concepts of "efficiency" and "productivity". Peter Drucker has noted that in the industrial age, the task for each worker was to discover how to do his job better; that's productivity. But in the Network Society, where machines do most of the inhumane work of manufacturing, the task for each worker is not "how to do this right" but "what is the right thing to do?" In the coming era, doing the exactly right next thing is far more "productive" than doing the same thing better.

Minds must open to the unfamiliar. In the words of Peter Drucker, as echoed recently by George Glider, "Don't solve problems, seek opportunities".

Finally... The wonderful news about the Network Economy is that it plays right into human strengths. Repetition sequel, copies and automation tend toward the free, while the innovative, original and imaginative al soar in value.


I don't think Kevin Kelly's observations (or those of many others writing on the same subject) can be taken literally as unquestionable "truth". All of this is too new for any "rules" to be established. His comments are, I think, intentionally provocative; but they are no less "real" than any of the established notions of economy or society. Things are changing; nobody can "predict" exactly how the "biome" will evolve. But I think it's important to have a new perception of our society. We should not be afraid of change; we should not run away from turbulence to seek refuge in old and crumbling notions. We should listen and explore, seeking with courage and (why not?) amusement the new opportunities.

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3. To count or not to count?
Once again, the opinions of readers are divided. Some think hostcounting and number-crunching are useless. Others think they are important and ask for more.

The solution, I think, is to do both: continue with qualitative reasoning but also try to learn from numbers, especially when new data are available. Not just for "balance", but because I think some analyses based on numbers can help to understand the situation, and therefore have qualitative value.

In this issue of Netmarketing the part dedicated to data analysis is about countries where net penetration is low. I don't think it's a "marginal" problem. Because no "global" analysis can ignore countries (and markets) as huge as China or India - nor the rest of Asia, Latin America and Africa (where we may be seeing the early signs of radical change). But also because, as I said before, not always the most effective strategies are directed to the most advanced countries. Being "pioneers" where the path is still to be traced can be remarkably rewarding.

Also... the spreading of networks (that is, knowledge and exchange) can be one of the fundamental tools for "sustainable" development of these societies and economies. And the contribution of individual companies and organizations, selfish as it may be, can do a lot to set the wheels in motion.

There are many Italian (or, more broadly, European) companies that export successfully in technically advanced and fiercely competitive markets. Many that win by discovering new markets. And many that do both. All of this can be started from scratch, or done better, by using the net - whether it's for commerce or other forms of communication.

To avoid loading this issue with too many charts and figures, I shall limit the analysis to "large, low-density countries"; in following issue I shall get into a more detailed analysis of large areas, such as Asia, Africa and Latin America.


I shall also deal briefly with gee-whiz numbers that are more confusing than useful - and with some interesting lessons that can be learnt from the global trend of hosts and domains.

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4. Large low-density countries
There are 16 countries with over 50 million inhabitants and internet host density under 1 per thousand (the world average is 3.8). For the sake of readable charts, and also because of substantial differences, I shall divide them in three groups: six with density over 0.1 per thousand, six below that level and four that are practically isolated.

Six low-density countries

Hosts per 1000 inhabitants - density between 0.1 and 1 - analysis based on data by Network Wizards, August 1997

low-density countries

The picture is clear. There are big differences and unbalances also at the low end of the scale; and there is a sharp separation between this group and the one in the next chart (where the "scale" is less than one-tenth of the one above).

Six "very low" density countries

Hosts per 1000 inhabitants - density between 0.001 and 0.1 - analysis based on data by Network Wizards, August 1997

very-low density countries

The green slice of the bar for China shows the large impact on average density of the annexing of (proportionally tiny) Hong Kong.

Four "large countries" are not included in the chart because their presence would be "invisible". Six hosts are reported in Nigeria, that has over 90 million inhabitants (more on Africa in one of the next issues). Iran has only one, and it's state-controlled (I imagine there must be special connections available to organizations doing business internationally, but they are not accessible to "ordinary people"). According to the Network Wizards census there are no internet hosts in Ethiopia; and Bangladesh, with over 100 million inhabitants, isn't even listed.

If we consider how many people in "accessible" countries are de facto excluded from net connections, we find that over two thirds of the world's population are completely isolated from the net and could not be connected even if they could afford the equipment. There are countries (neither few nor small) where an attempted connection may cost years of imprisonment - if not worse. Under these circumstances, talking about "global" networks is a quaint euphemism.

There is no technical barrier preventing the "information have-nots" from connecting to the net. Financial problems could be overcome, if only partly. With the expansion of wireless connection (which is happening) and low-price, low-bandwidth techniques (that are not spreading) there is no corner of the planet that can not be reached. The obstacles are political, cultural and administrative.


Before leaving (for the time being) the subject of low-density areas, I think it's appropriate to add a few comments on the two gigantic countries where 40 percent of humanity lives.

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5. China and India
China has 1200 million inhabitants; but there is a "Chinese universe" that is even larger. If we consider Chinese people living in many other countries, the "Chinese community" in the net could already be one of the ten largest in the world. But if we wander around the net we don't meet many Chinese; and when we do, we generally find they are living in Singapore, Hong Kong or the United States (a Chinese friend of mine joined the net recently; she emailed me from London). The "Chinese use" of the net appears to be mainly financial or commercial, a closed world of big business with few openings for "little people".

Inside China, networks are concentrated in a small part of the land. If two thirds of the hosts that we must now count as Chinese are in Hong Kong, we can assume that the rest are mainly in Peking, Shanghai and a few other cities.

There is no need to discuss here the well-known "Chinese paradox". If the strategic choice of the Chinese government is to open up trade but not culture, the consequences reflect directly on the net. Time will tell if, as thousands of Hong Kong junks carried information along with "approved contraband", also the commercial opening of the net can become the tool for the contraband of ideas; first with the Chinese communities outside the borders and then with the world (where the biggest obstacle is not the alphabet, but the fact that few Chinese speak "globalese"). The problem is that Chinese authorities are well aware of this - and do all they can to prevent it.

In the meantime, for those who want to trade with China the door is open, in spite of countless complexities; let's hope that this will help to exchange a few fragments of culture.


India has 900 million inhabitants; if we count the "separate Indies", such as Pakistan, Bangladesh, Sri Lanka etcetera, there is an "Indian universe" almost as large as China. But India in the net is smaller than Estonia - and it's not easy to understand why.

On the 50th anniversary of India's independence, we read many interesting articles on "the world's largest democracy". A country of great tradition, history, civilization and culture - with a remarkable ability in using the most sophisticated modern technologies. If multinational companies place their financial headquarters in India, that's not just because it's "cheap", but because of the competence of Indians in accounting and in the use of electronic technologies (not only in Bangalore).

In India there are only 7 million telephones. As many as in Switzerland. But Switzerland has 160,000 internet hosts and India 5,000. Many Indians are poor; but there are enough "well off" Indians to be a market, even for "western" products, at least as large as France. There is less illiteracy is India than in Latin American countries that have a low internet density by European standards, but 100 times greater than India. More people in India speak English than in Britain or in all of continental Europe. Technicalities are no problem: it's proven with many technologies (including electronics) that Indians can use much more complicated equipment than is needed for internet connection.

There is no insurmountable reason why India's presence in the net should not be equal to that of large European countries.

The Indian government has stated repeatedly that it intends to solve the problem. That means improving the telephone systems, adding wireless connections, liberalizing access, encouraging the proliferation of providers. The intention is clear, but so far the facts aren't there.

I think here are three stumbling blocks. The complexity of the slow and cumbersome political-administrative machine. The structure of the economy: large companies are in the hands of few groups and the development of medium-small companies is stifled. The culture: in a country with such a strong sense of community, electronic communities did not develop. Hardly any Indians on the net seem to know about BBSs or community networks (nor do people I met in India, that know more about computers than I shall ever learn).

There seems to be the need for a "titanic" effort (but it could be much easier if broken down in thousands of micro-solutions) to improve access; to open spaces for small businesses or, in any case, organizations that are not part of the large monopolies; to spread a culture of the net as a community resource as well as a window on the world. How and when will this happen? I don't know. But if the "virtuous circle" started, the growth of India in the net could indeed be "exponential".

In the meantime, can we do business in India using the net? Yes, even if that means "inventing" our own networks - as some have done.

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6. More numbers...
I don't want to repeat again my doubts about the numbers of internet users in Italy (or elsewhere) being announced every now and then - nor the reasons why the fancy numbers and delusions are not doing any good.

But we can't ignore reports in leading newspapers that according to an estimate published by Alchera on September 22 there are 2,348,000 internet "users" in Italy.

Some press reports include a statement by Roberto Liscia, managing director of Anee (national association of electronic publishers): «The number of people who have a contract with a provider has increased, but it's still quite low, approximately 300,000 people». Other newspapers say 250,000. Those figures, as all such data, are uncertain; but even if they were true the unsolved mystery would remain of how there can be eight or nine "users" for each person that has an internet access.

Skepticism on such figures is widespread; but they continue to be echoed (with mild reservations) by the press. And by "sources" that have something to sell. In private they say: «Of course I know these figures are not reliable, but quoting them helps my business».

I think the number of Italians on the net is growing - as in most countries. We don't know their number; but that information is not very relevant for doing business on the net. It's obvious (though not understood by everyone) that the internet is not a "mass medium". Unlike broadcast media, the number of people who "can be connected" is not an "audience"; nor a "market", except for directly related goods and services, such as communication hardware and software.

What matters is the community with which we have a dialogue; and for many activities, including marketing, a few hundred (or even less) actively connected people can be very valuable.


And, there is the world... where we are nowhere near the "billion" projections that were fashionable a few years ago; there are, as we have seen, enormous differences and unbalances; but there are millions, maybe tens of millions, of people connected. The net is not, as the legend goes, "doubling twice a year"; but it is growing fast, as shown by the figures we saw in the last issue and by those that follow.

 

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7. Hosts and domains: the meaning of a trend
The Network Wizards census shows a peculiar trend. The number of domains is growing much faster than the number of hosts (while for both the growth rate is decreasing).

Internet hosts (worldwide) % change Domains % change Host/Domain
January '93 1,313,000
21,000
62.5
July '93 1,776,000 35.3 26,000 23.8 68.3
January '94 2,217,000 24.8 30,000 15.4 73.9
July '94 3,212,000 44.9 46,000 53.3 69.8
January '95 4,852,000 73.1 71,000 54.3 68.3
July '95 6,642,000 36.9 120,000 69.0 55.3
January '96 9,472,000 41.9 240,000 100.0 39.5
July '96 12,881,000 36.4 488,000 103.3 26.4
January '97 16,146,000 25.3 828,000 69.7 19.5
July '97 19,540,000 21.0 1,301,470 57.2 15.0

The remarkable fact is that since 1994 the ratio of domains to hosts has decreased from 70 to 15.

It seems quite obvious that the driving force behind a fast increase was the birth and growth of the World Wide Web - and that the momentum is wearing out.

That development was followed by a proliferation of domains, which is probably due to the overlapping of several causes.

There was a "rush" by companies to register domains, to protect their brands as well as to own other names and words related to their businesses. But this trend is not large enough to explain a change of such magnitude.

There was also the coming onto the net of many smaller, or more diversified, organizations, that unlike the "historical" leaders (such as universities) don't organize their sites with several departments and divisions under one domain with a hierarchy of pages or subdomains.

Also many, that initially had somewhat timidly placed their homepages under the domains of the services hosting them, discovered that they could own their own domains; and the proliferation of hosting services, making it possible to have one's domain handled by someone else's server, made it much easier, and less expensive, to own an independent identity. With the added advantage of being able to move from one supplier to another without changing address.

This may have increased the number of ephemeral presences (but several were already there) and contributed to the crowding that is making it less and less easy to find what we are looking for; but overall I think it's a positive trend, because it adds to the diversity and complexity that is the vital force of the net's "biology".


Many, of those 1.3 million domains, are the identity of someone who has come on the net to stay, and has a clear idea of direction - or maybe intentionally doesn't, but is well aware of the learning that can come from exploration. Many others are attempts that don't take off, because they lack ideas and nourishment - and sooner or later will wither in loneliness. From a broadly ecological point of view, all diversity is useful; but when seen from the angle if the individual company, organization or person, the perspective is quite different.

If we want to thrive in the Network Economy, we can't be like those short-lived little butterflies that burn out on a lightbulb or just fly around until they die. We need patience, consistency and determination; and we must develop those rather special qualities that lead to growth and success in the complex and turbulent reality of this environment.



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