It's going to happen. Just look at who's working on itcompanies like AT&T, Microsoft, MCI, IBM, the broadcast and cable networks, the Baby Bells, and many others, plus a fair number of smart people in their garages or home offices.
But another type of breakthrough could be the emergence of our industry's Holy Grail: the "killer application." It's happened before without any change in technology. Sony came out with the Betamax in 1975. Everyone thought then that the "killer app" for VCRs would be time shifting. And VCR usage rose steadilybut not spectacularlytoward 10 percent by 1982. That growth curve closely parallels the experience to date of online services. But something changed in 1982. Suddenly, mom-and-pop video stores sprang up in every town. The "killer app" turned out to be movie rentals. Within the next 2 years, home penetration of VCRs approached 50 percent. So we could be nearing a flash point for the online medium. All we need to do is make it easier to use and figure out the "killer app." In my opinion, the ''killer app" is communications.
Sure, I know, online services have had communications from Day One. And these services are still a niche product. But consider this: most online services to date have been built around information, not around communications. That's turned out to be backwards. It's backwards because all people communicate; but only a small percentage of the population really cares about any one topic of informationO.J. Simpson excluded!
Consider this. CompuServe has 2,000 categories of information. But how many of those does the average member use? I know from my experience that it's seldom more than four or five applications. At Prodigy, there's a terrific feature called Strategic Investor, yet only a small fraction of members subscribe.
Given these facts, anyone starting an online service today would probably be advised to build outward from a rock-solid communications core, optimizing everything for subscriber exchanges. And you wouldn't just have bulletin boards, chat, and e-mail. You'd have instant messages, 3-D chat, and easily attached files for sound photos, video, and graphics. You'd also let subscribers create their own home pages on the Web, where they could talk about themselveseven show their cars. Prodigy will do this shortly, and the other services will quickly follow.
After you'd established a firm core of communications, you'd want to start adding information and transactions to it. But the information and transactions would be tightly integrated with the communications. That's important, because getting around online services today is like being the guy who explains where he's calling from by saying he's in a phone booth at the corner of WALK and DON'T WALK.
The leaders in online services will be those who can best integrate communications, information, and transactions. They will build on a core of communications to create communities of interest.
Let me give you an example. A company like Ford spends a fair amount of money each year putting information online. So as a user, I can navigate to Ford's advertising section and read about its new cars. Even see photos of them. OK, fine. But how often am I going to come back to see the same information? Now, if I'm interested in cars, maybe I'll log on to a car enthusiasts' bulletin board. But after a while, I'll get bored talking to the same old regulars. On another day, I might order a subscription to Car and Driver magazine right from my computer. The problem is, all these are discrete activities that I carry out as an individual. They don't create much excitement. They don't involve me very much.
But what if an online service creates communities of interest built around world-class communication functionality? From a single screen, or with hyperlinks, I can see Ford's cars, chat with other car enthusiasts about them, debate with Car and Driver's editors, download model specs, check the archives of the Detroit Free Press for an article about Carroll Shelby, ask Shelby a question, place a classified ad to sell my '67 Mustang, look up the price of Ford stocks, buy 100 shares, and send an instant message to a friend's beeper urging him to get online and join a discussion group.
You can do all or most of this today on the online services. But no one has done a very good job of integrating it to create true communities of interest. That's what I think will make online a ubiquitous medium. And if it is, can advertisers be far behind?
Advertising on the Web is a tricky business, however. Very few advertisers really understand it. The environment differs from other media and will become more different over the next few years. It's an environment where the revenue model will become pay-per-viewor pay-per-minute.
Today, for most users, the Internet is essentially untimed. And, as a practical matter, so are the commercial online services, since the majority of their users stay within the flat-rate time limits that go with their