Get SF Weekly Newsletters
Pin It

Webbing Out 

Wednesday, Dec 20 1995
Infoworld columnist Bob Metcalfe cracked the whip of the Web backlash earlier this month (Dec. 4), predicting that the Internet "will soon go spectacularly supernova and in 1996 catastrophically collapse," leaving behind millions of World Wide Web ghost pages. Metcalfe is no Luddite, having invented Ethernet and founded 3Com (the company, not the ballpark), so all those San Francisco Webtrepreneurs at Salon, the Gate, HotWired, and c|net should pay attention to his dire prophecies.

The media, which has hyped the Web well beyond its ability to deliver, should listen up, too, especially Joan E. Rigdon of the Wall Street Journal. On Dec. 8, Rigdon wrote this sprightly lede for the Journal: "It may be years before the World Wide Web takes off as a massive shopping mall. But the ad revenues are rolling in now."

Rolling or dribbling in, Joan? Citing a study by WebTrack Information Services, Rigdon reports that 270 companies (Fortune 500 concerns and others) purchased $12.4 million worth of ads on 175 Websites in the fourth quarter of 1995. But the number of actual advertising dollars collected is much lower, she acknowledges, because the WebTrack numbers don't account for ad discounts and barter, both of which are commonplace on the Web.

WebTrack disclosed that the big spender on the Web for the quarter was AT&T, dropping $567,000 of its $1 billion ad budget on Websites -- that's a whopping .0567 percent of the media giant's total ad spending for those of you familiar with long division.

Meanwhile, the paper billionaires at Netscape collected $1.8 million in ad revenues while spending $556,000 on other sites to advertise the company's industry-leading browser and server software. Likewise, c|net spent $237,000 on the Web and took in $540,000. I think these are examples of what frat boys call circle jerks.

It may sound like a lot of money, but $1.8 million in national advertising revenues is nothing to shout about -- unless what you're selling is ad space on, say, urinal walls in Los Angeles bars. But the big bucks are coming, say the Web businessmen, contending that it's only a matter of time before Web advertising takes off for real. Indeed, Forrester Research says that annual Web ad revenue will rise from an estimated $37 million today to $727 million in 1998, while Alex. Brown & Sons estimates that Web ad revenue will leap to $1.4 billion in 1998.

But Metcalfe demurs. How many of those sites will even be around in two years? he asks. Millions of dollars were invested in Web start-ups during 1995, and he predicts that when the green eyeshades learn in 1996 that huge amounts of money are being lost rather than made, they'll pull the plug. Eric Utne of Utne Reader is one Web publisher who has already gagged on the red ink. He went digital this year, spending hundreds of thousands of dollars to establish a new site -- the Utne Lens -- and publish original material on it. But for all his efforts, Utne attracted just one paying advertiser -- Saturn cars -- and by October he'd gone analog again, republishing Utne Reader material on the moribund Lens site.

Utne isn't the only digital publishing pioneer losing faith. Over at Time Warner, the inside name for the company's ambitious but money-swallowing Pathfinder Website is "the black hole." But Pathfinder isn't an absolute failure. This year, it attracted $2.5 million in revenue, the amount of advertising you could sell on, say, urinal walls in New York bars.

The Web isn't going to drive significant dollars onto the Internet until it drives tens of millions of users to popular sites and creates a mass audience -- an audience that can be measured. A survey of Internet users conducted by Nielsen Media Research and released on Oct. 30 found such an audience congealing on the Internet. Nielsen deduced from its interviews with 4,200 respondents that 37 million adults (well, 37 million people over 16) had access to the Internet, 24 million had taken advantage of that access in the last three months, and 18 million had browsed the Web. It further claimed that the total hours of Internet usage in the U.S. and Canada were equivalent to the total playback of rented videotapes.

But faster than you can say "black hole," one of the study's academic advisers, Donna L. Hoffman of Vanderbilt, disputed the numbers, telling the New York Times (Dec. 13) that the survey was skewed because it had polled too many older, affluent people. Professor Hoffman re-estimated the number of Internet users at fewer than 10 million, and while she didn't adjust the Web numbers, given her downward estimates of commercial on-line users (from 40 million to 10 million), we can guess that there are fewer than 9 million Websters out there.

(Hoffman's discouraging words were not repeated by San Francisco's two dailies, perhaps because they're too busy publishing computer-industry puff. To its credit, the San Jose Mercury-News reprinted the Times piece.)

Metcalfe offers other bad Web news. Web security is rotten, he writes, transaction costs are too high, and the ongoing war of control over Web standards is sure to damage compatibility and future growth of the Web. Millions of potential users who are wired to anything slower than a speedy ISDN line are deterred from browsing because today's Web is a matter of hurry-up-and-wait; that's not going to change soon, because the telephone companies aren't rushing to make their systems Web fast.

And if that isn't enough, Metcalfe insists that the Web isn't going to have the capacity to carry the great volumes of electrons that its promoters have in mind. "[The Internet's] circuits choked ... by the reaction to one measly jury verdict in Los Angeles," he writes. What's bad is going to get worse as the coming wave of Web video swamps the system.

Too few users, not enough advertising, too much hype, too goddamn slow, not enough capacity -- SF Weekly has no alternative but to join the stampede onto the Web in early '96.

About The Author

Jack Shafer


Subscribe to this thread:

Add a comment

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed
  1. Most Popular


  • clipping at Brava Theater Sept. 11
    Sub Pop recording artists 'clipping.' brought their brand of noise-driven experimental hip hop to the closing night of 2016's San Francisco Electronic Music Fest this past Sunday. The packed Brava Theater hosted an initially seated crowd that ended the night jumping and dancing against the front of the stage. The trio performed a set focused on their recently released Sci-Fi Horror concept album, 'Splendor & Misery', then delved into their dancier and more aggressive back catalogue, and recent single 'Wriggle'. Opening performances included local experimental electronic duo 'Tujurikkuja' and computer music artist 'Madalyn Merkey.'"