The battle for power over the internet - of which the fortunes of Lastminute.com are but a tiny skirmish - can best be seen as a struggle between the centrifugal forces pushing power down to the individual and the centripetal forces - mainly involving corporations - that are trying to capture control of the centre.
Individual empowerment through the free exchange of information was the Magna Carta of the net in earlier days. Remember when commercial organisations trying to use the internet to sell things were subjected to instant spamming? Then commerce, inevitably, staked its claim.
If one had to put a date on it then it was probably when the successor to the Mosaic browser developed at the University of Illinois (and distributed free over the internet) was launched by Netscape, a company determined to make millions by giving its browser away free.
For all the hype, Britain's (corporate) internet boom has yet to celebrate its first birthday. Yet the flotation of Netscape, the first internet bubble stock, happened almost five years ago. (Yes, we are still that much behind the Americans.)
Netscape's market capitalisation surged in the first few hours of trading to $2.7bn, a milestone that had taken General Electric 43 years to achieve. At the time Netscape was losing $4.3m on six months' trading of $16.6m (rather a good performance compared with today's UK net start-ups).
Where is the money now being made? There have been two main beneficiaries. First, the builders of the infrastructure - the equivalent of the entrepreneurs who made money out of selling shovels during the gold rush. Cisco briefly ousted Microsoft last week as the most valuable company in the world in terms of market capitalisation - although hardly anyone outside the loop has heard of it.
One of the reasons the infrastructure companies have been successful is that they have built up strong near-monopolistic presences in areas where the barriers to new entrants are high. It's much easier to put up a new website selling to the consumer than to break into the markets for routers, servers and fibre optic networks.
The second area where money is being made is on the stock market in anticipation of the profits that may, or may not, to be made from selling goods and services to you and me. But, as of now, hardly any money is being made from selling things to the consumer.
So, either there will be a huge spending bonanza on the web at prices that will justify the absurdly inflated prices at which these companies are being valued - or valuations will tumble to reflect the fact that the centrifugal forces are winning. The consumer, not the producer, is king of the web.
As the world gradually becomes a single market for many consumer goods, it will become increasingly difficult for companies to make high margins from products unless they have a monopoly or a binding patent.
Investors are beginning to get wise to the fact that the huge marketing spend needed to establish a presence is very difficult to recoup from the low-margins offered by products sold on the net where consumers (or electronic agents acting on their behalf) are constantly scouring the web for cheaper options.
The concept behind Lastminute.com was, and is, a good one. It also has an importance disproportionate to its size in being an iconic flagship for UK web start-ups. Its problem is not that it isn't a good company, but that it is impossible for it to live up to the hype with which it readily acquiesced when it agreed to be floated at such a wild premium to its short-term potential. It is not easy for a business based in Mayfair to undercut airline bucket shops in Victoria and make a big profit from it. At least not until it establishes a global base (which Lastminute is working hard on).
But the real significance of all this is not that ecommerce corporations from Amazon to Egg, are finding it difficult to make any money, let alone serious profits, from online trading but that the web is being returned to its original ideals, albeit by a circuitous route. The founding mutuality of the web has metamorphosed into enforced mutuality. Companies are under pressure to give away, or sell at a loss, products they find difficult to sell at a decent profit on the web, however much they would like to.
It is not just email, browsers, calendars and online applications such as word processors and spreadsheets that companies are being forced to release for the comon weal. It is also a wealth of content. News, stock market prices, databases (on films, sport etc) and music that used to cost money are now free.
Only where companies have proprietary rights over products for which there are no immediately available substitutes (eg popular films) can charges be made to stick.
Even where the centripetal forces have been successful - like Amazon's amazing success in creating the world's biggest bookstore - they haven't been able to deliver the cream. Pioneers of e-selling, including Amazon, are facing an e-paradox: they won't make profits until they raise prices - but every time they try to do this, customers will click to a cheaper source.
There has never been a better time to be a consumer.
