They came in like an invading army. It was the American dot-com brigade, and over the past four years it swept through Europe, Asia, and Latin America. Cisco Systems Inc. (CSCO) laid down the railways and bridges. Dell Computer Corp. (DELL) and Sun Microsystems (SUNW) supplied the materiel. Amazon.com Inc. (AMZN) and AOL Time Warner Inc. (AOL), flanked by venture capitalists, attacked the mass online markets. Soon, these foreign frontiers for the Internet were operating on the U.S. model. The goal: a personal computer on every office desk and in every home, all surfing local variants of Amazon, Yahoo! (YHOO), and eBay (EBAY). Analysts even devised a standard to measure each nation's progress: how many months behind the U.S. in terms of Internet penetration. A year ago, France was 24 months back, Japan 18. Whatever the pace, everyone seemed to be marching in formation.
Now foreign dot-coms seem to be following their American prototypes over the financial cliff. But while these companies and their investors suffer, the Internet proceeds. Like tens of thousands of others in Paris, I'm logged on now through a broadband hookup that was unavailable until a year ago. I order books from Amazon.fr and Spanish Rioja wine through a site in Madrid. Whether or not these providers go bust, the Net will remain a force in France.
And the rest of the world will not wait for new leadership from America. In fact, non-U.S. users could well drive the Net to the next stage. That's because these days everyone is on equal footing in the search for money-making e-business models. What's more, growth in PC sales is slowing. Net consultant Jupiter Research 2000 even predicts PC penetration in Europe will plateau at 52% of households in 2005, compared with 73% in the U.S. Thus, the Net will likely migrate onto other machines, principally the mobile phone, where Asia and Europe dominate.
Oh, just typing these words I can hear rebuttals pouring in from America. The European phone companies will go broke building these mobile systems, and they made a mess of the first generation of the wireless Web. The Japanese? They're just a bunch of kids sending cartoons on cell phones! But let's agree that there will be many failed business models for the mobile Net. That's also true of the PC-centric Net.
GOLD. The advantage of handheld, Net-enabled machines, though, is that they can extend e-mail, ticket orders, inventory levels, and music downloads into the hands of buyers and sellers every waking hour. In an economy that runs on information, this power is gold. Why assume nobody will figure out how to profit? People already are putting these tools to use. And many are outside the U.S.
Consider the Philippines on Jan. 16, where the Senate was deliberating on corruption charges against President Joseph Estrada. When word spread that the charges could be dropped, opposition leaders hurried to mobilize a demonstration that night. Not enough Filipinos were online to reach them by e-mail. But 6 million have cell phones and use them to send text messages. Using this medium, within hours the organizers convened a throng outside Malacanang Palace, sending the clear message Estrada was history.
Mobile telephony will be essential for the Net to attain its potential. Since 43% of Americans surf the Net, compared with 3% of the rest of the world, most of the growth is sure to be abroad. And as in Manila, many in this next generation lack PCs--but do have cell phones. The Web also will have to become more multilingual: Billions of Chinese, Brazilians, and French struggle to navigate in English. U.S. giants such as Intel Corp. (INTC) and Microsoft Corp. (MSFT) are establishing wireless research centers across the world to tap these markets. But America's PC titans will have less of a stranglehold on software and content, giving rise to more innovative products, such as the Web browser used in NTT DoCoMo's wildly successful i-mode phones. Other breakthroughs could originate in small cities in China or India as companies struggle to build businesses for customers on tight budgets. It was this type of market pressure in the '50s and '60s that led Japan to produce the best small cars in the world. The time has come for the rest of the world to put its stamp on the Net. By Stephen Baker
Baker covers the European tech scene from Paris.