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JUNE 10, 2003


SPECIAL REPORT: THE SOCIAL WEB

The Net: Now, Folks Can't Live Without It
Every year, millions more people around the world use the Internet to interact in more ways than ever before, incorporating it into all corners of their lives


When Bethany Tate moved to Seattle over two years ago from Philadelphia, she decided to look for new friends online in chat rooms that focused on heavy metal music and photography. But most friendships she developed there remained virtual, which for her was a downer. "You never get the sense of what people are really like [through chat]," she says. Then last January, she discovered a company called There, which is testing a more expressive variety of Internet communication that until now has showed up mainly in electronic games.


At There, which is basically a virtual place for hanging out, a human assumes an online identity -- an avatar. For instance, Tate runs a clothing design business at There, whereas in reality she's starting a film production company. Visitors can chat while adopting the persona of a cartoon-like character that talks by spouting bubbles or by using voice-over-Internet-protocol (VoIP) to speak to another person.

An avatar can raise an eyebrow, plant a kiss on another avatar, or throw daggers at the other character. The idea is to simply spend time together: playing paintball wars, driving around in hovercraft, visiting waterfalls, or talking. Tate, 26, a beta tester on the site, which is expected to go live later this year, says she's finally getting to know other people. She has already made one offline friend at There, whom she now meets twice a month for lunch.

LINKING UP.  Call it the Social Web. Through the dot-com bubble and bust, one trend has never wavered. Every year, millions more people around the world are using the Internet to interact in more ways than ever before -- to date, find old classmates, check on medical ailments and cures, to read and express alternative views of the news, and even to get live sales help online. It's happening at work as well: Want to check your 401(k), pay stub, or file an expense account? Increasingly, that's all on the Web.

And these new trends complement some long-standing ones: Some 53 million Americans -- one in six -- now visit a chat room every month, according to market researcher Nielsen/Net Ratings, up from one in 10 in 2001, according to tech consultancy Forrester Research. E-mail is now the most popular online activity for 93% of some 4,431 Web regulars surveyed by Net consultancy Jupiter Research last September. Moreover, entrepreneurs are once again investing in ideas aimed at improving online communication.

Over the past two years, "there has been a significant shift from e-commerce to rediscovering e-communications," says David Silver, director of the Resource Center for Cyberculture Studies at the University of Washington in Seattle. For subscribers seeking love on dating sites such as Yahoo! Personals, video and voice greetings can now be posted. And in the future, "the distinction between talking on the phone and watching movies and playing games will become blurred," predicts Nolan Bushnell, the gaming guru who in 1972 founded Atari, which made the first commercial video-arcade game, Pong. Bushnell, who's considered the father of computer entertainment, believes that eventually all types of media will combine to create a completely new communication experience via the Web. That will change everything from online shopping to dating to teleconferencing.

VOICE OVER PALM.  The shift Silver cites already reflects to a significant degree major advances in Web technology. Just 12 months ago, Wi-Fi, which allows for fast, wireless Internet access, didn't even exist in the public consciousness. Today, an estimated 4 million people worldwide use the technology to connect to the Web -- and each other -- from just about anywhere, a number that's expected to grow to 63.3 million by 2007, according to market consultancy Gartner.

In late June or early July, handheld maker Palm (PALM ) will release software that lets users of its new Tungsten C personal digital assistant make phone calls via Wi-Fi networks to other Wi-Fi-enabled devices -- such as the latest generation of phones from the likes of networking giant Cisco (CSCO ). A month or so after that, Palm will release special software that allows those same people to make calls to any mobile or regular phone. They'll simply open their buddy list, click on the icon of the person they wish to call via a Wi-Fi connection, and the PDA's software will take care of the rest, explains Paul Osborne, a senior product manager at Palm.

That's a smart move, because voice-over-Wi-Fi and VoIP are taking off because both are cheaper than long-distance calling. The market for VoIP services, such as videoconferencing, should grow from $46 million in 2001 to as much as $36.5 billion by 2008, predicts think tank Allied Business Intelligence in Oyster Bay, N.Y.

LOCATION-BASED I.M.  At the same time, the Internet is spawning a broader convergence of voice and data. Internet service provider Earthlink (ELNK ) is developing a follow-me Net service, which it expects to introduce within the next two years. One feature: When customers shut down their desktops, the software would immediately redirect all e-mail to their PDAs or cell phones. When they open the door to their home, the software would redirect the same material to their home network, says Mike Lunsford, Earthlink's executive vice-president for customer experience.

Many other outfits are also focusing on improving today's communications tools. On June 10, startup Trepia in Fremont, Calif., released its latest version of something called location-based instant messaging. The software uses a PC's IP address to identify the person's location -- as long as they're connected via technologies such as Wi-FI. Then, it uploads a list of people on the Trepia network onto the computer's buddy list, starting with those located nearby. College students would first see those among the 15,000 Trepia users who live in their dorm, then those living on campus, then those located in the same city, and so on.

The software could be used for striking up a conversation or helping a business traveler find other people attending the same conference, says Jawed Karim, Trepia's CEO. The startup plans to offer the service for free and charge for advanced functions such as searching through the buddy list, Karim says. Whether this marginal improvement will gain enough traction for Trepia to prosper is a long shot, however.

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