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Is the wild child maturing?

by Scott Bradner

The last few weeks have presented a mixed view of the maturity of the Internet and the general thinking about it. On the one hand a survey of Internet users shows a significant diversification of Internet users and a major airline starts to offer a discount to people who book their flights through a web site. On the other hand Wall Street still considers Internet-related stocks with all the deliberation of an addict on withdrawal being offered crack cocaine.

On January 14th the Pew Research Center for the People & the Press published the results of their latest survey of Internet users. Their conclusion is that the Internet is going "ordinary" (to use their descriptive word.) The survey ( http://www.people-press.org/tech98sum.htm) showed that about half of the current Internet users started in the last year and these new users are no longer as different from the normal population as they once were. Slightly more than half of the new users are female which is in line with the general population. They are less rich, less educated and somewhat older then their predecessors.

In addition Internet usage patterns are changing. Accessing weather information has replaced technical news as the top use and nine out of 10 users now consider email not just for business anymore. Its getting harder to paint the 'Net as the exclusive domain for geeks, social outcasts, libertarians, and hate groups. These people have not gone away, as one can find out by joining any mailing list dealing with domain name issues, but normalcy is becoming the norm. The Internet is becoming a better sample of the population. In this it can be said to be maturing, just as the auto industry matured when you did not have to be rich to buy a car.

The same week that the Pew survey came out Delta Airlines initiated a plan where travelers who book their tickets through the Delta web page get a small discount. This is in sharp contrast to the stage of Internet adoption that characterizes the banking industry. Most banks which offer Internet access to customer accounts do so at an extra fee, just like the early days of the ATM machines. It is a sign of maturity when companies start to understand, as the banking industry did over time with ATM machines, that they should charge less for using services which cost less to provide. Internet-based stock services have understood this for a while but it is good to see established businesses get the picture.

In spite of all the trends that say the Internet is becoming something less special, as it should, the investor community is off on another planet, or even an alternate universe. A universe where new Internet-based companies are valued far above what any rational evaluation would indicate. Stock prices in Internet-related companies escalate at rates that are reminiscent of the bio-tech stocks of a decade ago, almost all of which are now trading at a small fraction of their peak values. There will be a crash in the values of these stocks, after which reality may set in. At that time the Internet will actually be fully mature.

disclaimer: If the only gauge is time, then Harvard is mature, in spite of appearances, but the above is my immature view.