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On Mon, 27 Mar 1995 kris@cris.com wrote:

> I think we all agree the Internet is becoming an important force in American 
> business.  I've done research on the number of individuals and domain names 
> now in existence, and have a good handle on the "size" of the 'Net.

> What I don't have, and am wondering, is if anyone has done an economic 
> analysis of the value of the Internet.  Is its value in the amount it 
> reduces the cost of traditional means of communication, such as snailmail 
> and voice communication? Is its value closer to that of a gigantic 
> publishing house, with ad revenues driving the dollar amounts here?

What is the value of the information?  To receive real-time stock-quotes 
through an encrypted feed might be worth $3000/month.  To get an apartment
in Manhattan might be worth $1800/move?  To get a date with a compatible 
partner might be worth $600/match.  To get your "dream house" might be 
worth $10,000.  As a stock broker, leasing agent, dating service, or 
realtor, it makes a lot of sense to put up the BBS where I hold the 
contact information and let you "browse away" through virtual reality.
For a fee, I can turn that virtual reality into actual reality.

> I'd appreciate pointers to any type of economic analysis of this sort.

The best sources of numbers are WAIS inc.  First Virtual Holdings, and 
other companies which provide "Internet Cash".  It is likely to grow into 
an industry where consumers will purchase $200-500/month in tangible 
goods through "real-time retailers", "on-line brokers", and other "agent
sponsored servers".

At the moment, users are willing to spend $40-50/month for raw 
information.  The ratio for this type of generic information will shift 
from 90% for distribution and <10% for content to 20% for distribution 
and 80% for content.

The first movie theaters would show movies to lure kids in and sell them 
candy.  The movie was 5 cents, but the kid could easily spend 25 cents on
penny candy and soda-pop.  This model will probably apply to the internet 
as well.  Vendors and agents will use secured IP routes to search as a 
proxy on behalf of customers and potential customers who will pay a 
commission.  What retail store wouldn't want to have on-line virtual 
shopping stores, if they knew that the customer would be in within 24 
hours to "Try on" their stock?  No more clearance sales because the buyer 
thought velvet would be great for one more year.  With less "spoilage",
there's more to pay for express shipping, electronic shopping, invoicing, 
and near-real-time flooring.  Imagine finding a dress you love and 
KNOWING that it will be there, IN YOUR SIZE, when you get there tomorrow.
How much is THAT worth?

> Thanks in advance.
> Kristine

	You're welcome.
	Rex Ballard

From rballard@cnj.digex.net Wed Apr  5 23:21:17 1995
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