THE CALL OF THE WIRE
THE NEXT GENERATION OF THE INTERNET IS HERE, AND IT’S ON YOUR PHONE.

Byline: Janet Ozzard

If you still believe that the Internet is ultimately going to produce a society of alienated teenagers and hermetic conspiracy theorists communicating only via chat rooms, test-drive this scenario:
You’re walking down the street, or driving home from work. On the way, you pass a store where, six months ago, you bought a suit that you wear constantly. A satellite is tracking your position via your cell phone, which also has a wireless Internet connection. The store sends a signal via the satellite to your cell phone, which beeps and displays a message saying, “Hey, that store you like is having a sale on that suit you wear all the time. Don’t forget the dry cleaning.”
Technology just keeps making one mind-blowing leap after another. The trend toward faceless communication via e-mail and cell phone might be fodder for those who believe society is getting increasingly alienated, but a lot of what’s coming in the near future is going to let people get away from their computers and out of their homes.
And for better or worse, commerce is one of the driving forces of this new technology. Writer Douglas Rushkoff, one of the leading voices of the Internet generation, says that commerce is one of the sole areas where the machine guides the person and not vice versa.
“I’m not a techno-determinist, so I tend to believe that human will comes before any technology,” said Rushkoff. “The only case where technology leads behavior is when we teach machines how to sell. And we’ve done that, with things like sticky Web sites, permission marketing, and one-to-one sales. We use machines to generate impulsive, Pavlovian behavioral cues. That’s when it gets a little scary.”
Except for one of the most desirable demographics out there.
“Teenagers are embracing this technology,” said David Benahum, a partner in New Things, an Internet incubator here. “There are a lot of entertainment features. The Japanese are ahead of us in terms of cultural adoption of new gadgets. The Japanese have a way of coming up with fun gadgets. That is going to migrate here.
“From our point of view, the first phase is done,” Benahum added. “People get it. Consumers now have different expectations and are more sophisticated. There’s a move away from cookie-cutter aggregator sites who just gather information into big lumps. Those aren’t just boring for the investor, they’re boring for the consumer. Their sites are nothing more than mail order catalogs.”
Yes, the euphoria has begun to deflate, and yes, the economic shakeout has begun. But that’s not so bad, said Benahum.
“I look at a lot of these dot-coms as continuing education,” he said. “It’s training the whole workforce with an entirely new set of skills.”
So what’s next? Wireless. And judging by the $10 billion initial public offering of AT&T’s wireless business, and the giant leaps in European tech stocks, the financial community believes.
“Wireless” basically means that people will be able to access the Internet via their cell phones or any other device, like a Palm Pilot, that has the capability.
“The idea is the mobile phone is going to be the basic unit, not the personal computer,” said Steve Mullins, editor of Internet Markets, a new London-based publication that covers the European Internet business. That’s great for the Europeans, who have historically been way ahead of North America in cell phones and the attendant technology. Europe already has digital cellular service, for example, which will make it a lot easier for them to get beeped by the satellite.
“We are trying to create a wireless environment that can bring the Internet to the cell phone,” said Benahum. “Information will be divided into smaller applications, and there will be a migration away from PCs to customized devices. People might get their stock quotes on their Palm Pilots, their watches or beepers, or exchange work-related e-mails.
“I don’t see the trend of ‘I’m a high-powered lawyer, but I work a hundred miles out of New York City in the country’ really happening. But for people in service businesses, who spend a lot of time out at appointments, it’s right.”
And a lot of people want service on the Web. According to Media Metrics Inc., which tracks Web sites, the kind of information that people want from the Web is changing. There’s less aimless chat and more targeted information seeking. Surfers want service.
“There have been a lot of changes in the Web community even from three years ago,” said Douglas McFarland, senior vice president and general manager at Media Metrix. “Of course there’s still a lot of e-mail, but now you see a big movement to financial sites, and to big travel sites like travelocity.com or expedia.com. You also see more traffic at the women’s sites, like iVillage.com, oxygen.com and women.com. People are looking for different things in interesting forms.
But while shopping and buying is still a growing part of Internet business, it’s lagging in innovation.
“In the area of commerce, specifically, we’ve pretty much stuck to the traditional,” said Rushkoff. “We are exposed to the same kinds of psychological selling techniques that car salesmen or advertising people use, but in an automated environment. A market is a market is a market. The only real difference is the creation of new sorts of marketplaces — or at least new market communities, such as EBay. Although it’s really just an extension of the flea market or ‘swap meet,’ Ebay and other auction sites turn consumers into sellers. The thing we’re buying, as e-sellers, is the space and technology to sell our stuff. Many people who never really sold things before now visit garage sales, collect stuff and then sell it on Ebay. Some even quit their jobs to do so. For the majority of us, though, the only real difference is that we use the Web and UPS instead of our feet.”
And as wireless develops, the marketers can follow us around day and night.
“One thing about the so-called ‘new’ phones is that they will always be on,” said Mullins. “There will be a lot of that kind of promotional advertising stuff that you can’t do now, and you will set up your phone to get the kind of customized information you want. Plus, you can buy things and pay for them with your mobile phone. It does away with money and even credit cards.”
There’s already a prototype Coke vending machine being developed by telecom company Nokia. The thirsty purchaser doesn’t need money; by hitting a combination of numbers, the soda machine is cued to drop the soda and bill the amount to the phone.
Then there are more high tech options. For example (and contingent on copyright lawsuits) eventually consumers will be able to use their cell phones to funnel songs off the Internet onto a portable MP3 player.
“MP3 is the holy grail for a lot of these companies — Nokia, Ericsson, Psion, Palm — because it appeals to the target consumer. Young, hip, with a lot of disposable income,” said Mullins.
Brand loyalty is going to mean even more, though, since the rush to get into this attractive, lucrative and very cool market is far from over. Plus, the Internet is a minefield for marketers.
“It’s not linear. People jump around a lot,” said Media Metrix’s MacFarland. “The question becomes how to maintain brand efficacy when there are so many major names. Everybody has his own site. My daughter doesn’t even use search engines anymore; she thinks that’s old-fashioned. She just types in the url.”
And what is all this doing to our mental state? The casual observer might think that constantly evolving technology is too much for humans to cope with and that there’s more freefloating anxiety than ever before, as panicky consumers try to wade through a few hundred extra demands on their time.
Maybe not. Psychiatrists think society is a lot more elastic than it’s getting credit for.
Dr. Jack Gorman, a professor of psychiatry at Columbia University and a specialist in anxiety disorders, said it’s typical for the general public to assume the duck-and-cover position whenever they are presented with what seems to be a big change. But after looking at decades’ worth of clinical anxiety studies, he’s found that we’re actually calmer than we used to be.
“It’s true that every time there’s a new technology, or a major world event, everyone thinks there’s going to be a rise in anxiety,” said Gorman. “But every study we’ve done says otherwise. Rates of anxiety disorder are extremely constant. We always think we’re different from our predecessors. You know, we’re living in a time of great peace and prosperity.”
But as a thin layer of techno-millionaires continue to accrue, society could develop a new set of anxieties about being excluded from the good times or confused about technology. For the most part, experts say technology is helpful at an everyday level.
“Think about the mobile thing,” said Mullins. “Sixty-five percent of the population have mobile phones, so actually, everyone is in contact more than they used to be. Plus, phones have become a fashion accessory, for young people especially.”
“Technology can actually be very helpful, particularly for people who have great social anxieties,” said Gorman. Or even for those who aren’t clinically phobic.
“My daughter was out late one night, and I was worried, so I beeped her,” Gorman said. “She called me right back. It was extremely reassuring.
“It may lead some people not to interact with others, but technology has always led to some anxiety. At the time of the invention of the steam locomotive, there were tremendous discussions about whether the human body could physically withstand going 30 miles an hour,” he added.
There will be a lot more to sift through, though.
“There is a question of how much information you can really deal with,” said Mullins. “You have to make it easy for people.”
That’s why many software pioneers still believe that the TV will ultimately be the main conduit for Internet, Mullins said.
“Just about everybody has one, it already has a little hand-held keypad and people are comfortable with it,” said Mullins. “It’s a question of how things are packaged. It’s an evolution, not a revolution.”
“Really, the Web has not created a whole new world,” said Rushkoff.” It has simply given us a new window on the same old one,” said Rushkoff.