As genuinely flattered as I am to be asked by the Guardian to reflect on the net for the coming year, I am also nervous. I'm nervous about predictions, giving that I've just read a history of futorological predictions. One of the most notorious of these noted that the British Astronomer Royal, Sir Richard Woolley, dismissed the idea of space flight as "bilge" only a year before the Soviet Union launched Sputnik 1.
I have a few options: There is the "management consultant" option of being so vague as to be impossible to criticise. I was at a conference recently where a management consultant (I'm not making this up) said that if companies want to encourage visitors to come to their web sites, then they need to make the sites "interesting".
Or I could try the "analyst" option of spraying around detailed numbers (and being quantitatively wrong, but downstream when people will have forgotten). Lehman Brothers are predicting European mobile e-commerce as $400 billion plus in 2005, whereas Forrester put it a about $4 billion (ie, 100 times less). Who'll remember any of this in 2005?
The "sci-fi" option is to write about, as Dennis Cass put it in Harper's in July, "the kinds of things you've heard bores like Nicholas Negroponte drone on about in Wired magazine, like shoes that can send email to other shoes". The realistic option of trying to make one or two modest predictions about areas I have been working in. The last option seems like the best bet, but who am I to make predictions? Being in the middle of the Net revolution doesn't automatically qualify anyone as a visionary. Just to pick one example, Nathan Myhrvold was Chief Technology Officer of Microsoft. In late 1994 he was still writing memos downplaying the internet.
A couple of years later he said that traditional media companies would be "roadkill on the information highway". Microsoft went on to invest in, for example, Sidewalk (now sold off and defunct) and Digital Entertainment Network (which shut down a few months ago).
It's not as if we do better on this side of the Atlantic. At the end of last year, Freeserve was sold to Wanadoo at about one-sixth the price it was fetching a few months earlier, and at about 12p per share less than its launch price. Yet when it was at its peak valuation of £9 billion last year, not one of the 16 London-based investment bank analysts who reported on it gave a sell recommendation. I'm not picking on them. It is just important to remember the so-called "First Rule of Hollywood": no-one knows anything, just as John Browning recently reminded me when reflecting on the $300 billion plus that banks have loaned telecommunications operators to spend on the next generation of mobile phones in Europe. Hopefully, I can do a little better by setting easier goals: I'm just going to make a few key predictions about the Net as a whole, focusing on the UK and the rest of Europe.
These predictions are made easier by the fact that I see 2001 being about the continuation of existing trends rather than radical changes. First, the shakeout of the B2C (business to consumer) sector will extend into the B2B (business to business) and C2C (consumer to consumer) sectors. Whereas last year was about the failure of consumer sites - Boo, Pets, Boxman and WebHouse Club - this year will be about the failure of business exchanges (adumbrated by Efdex) and auction sites without critical mass. This doesn't mean that B2C or B2B commerce is in for a downturn: far from it, since US fourth quarter online sales are 70% up on the same period last year and a third of UK households have now bought something online (significantly above the European average).
UK B2C commerce (about £1 billion this year) and UK B2B commerce (about £5 billion this year) will continue to grow, but the markets will naturally consolidate. Second, the "Napsterisation" of many Net-based services will continue as the infrastructure for sharing without a central co-ordination begins to take over from the "traditional" client-server model for all such services. Closed communities will develop sharing strategies that are specific to their areas of interest. I can imagine that in a year or so I will no longer log-on to my office server to upload my latest PowerPoint presentations: my laptop will just publish their existence and my colleagues machines will retrieve them from me when they need them (or at least leave a request pending for the relevant files to be sucked off of my machine next time I plug in). Napsterisation, alongside the rush of other peer-to-peer (P2P) services coming on stream, will be the focus of genuine innovation.
In evidence, I point interested members of the general public in the direction of the American NYCE debit card scheme to allow consumers to send money to each other via ATMs, and Flutter.com, which offers a selection of bets (on sports and various other events) that bullish punters can take up when emailed bets from other members of the site.
Third, as the mobile sector - which is conservatively estimated at 2% of UK GDP and has been attracting 43,000 new users per day over the last six months - continues to evolve at speed, more and more of us will expect services to be delivered through their phones and other mobile devices such as PDAs. Bluetooth won't make as much impact as others are predicting. The integration of mobile and other channels - such as the web and interactive digital TV (in which the UK leads the world) and others, rather than mobile-only propositions, will be the way forward over the short term. There's no need to try and guess a "killer app" in this field.
It doesn't need one (although it does need a killer transactions, revenue-sharing and payments platform, but that's another story). All in all, it's not a difficult prediction to make that the year will be about evolving revenue and profit models accompanied by a less breathless view of technological change, tempered with more practical experience coming back from the front line. A good year for business, in fact.
