Leon Worden

Cybersex and free Internet access

By Leon Worden
Friday, August 27, 1999

guess I can understand how the Internet can be confounding. It's impersonal. It's not quite tangible. It's “out there.” It's what our 1950s futurists said 1999 would be all about.
    We often hear it's where sexual predators lurk, where nerdy math majors seek cybersex, where lonely, 40ish divorcees look for love, where pubescent teens can chat without moving their lips, where multi-level marketeers spam a new sucker every minute.
    All of those things are absolutely true.
    At the same time, the Internet is none of those things— at least, no more so than the rest of society. The Internet is millions of people— real people, with real, warm bodies who, collectively, have taken a closed network of military computers and turned it into an indispensible household appliance.
    In the span of a few short years, the Internet has revolutionized the way we gather news, seek entertainment, write letters, hold conversations, play games, conduct research and shop. And the changes keep coming.
    In May, CarsDirect.com, owned by Dell Computer founder Michael Dell, started selling cars through the Internet. In June, AutoNation, owner of Magic Ford in the Valencia Auto Mall and, soon, the Terry York dealerships, followed suit. (Forty percent of new car buyers research their purchase online, according to J.D. Power and Associates. Actual sales are fewer, but they're expected to grow exponentially.)
    Magic may be better equipped for the transition to online sales than most local firms. When it comes to e-commerce, Santa Clarita is remarkably average. Only about 2 percent of businesses in the SCV— and, according to Giga Information Group, only 2 percent of the nation's 6.5 million small businesses— are making money online.
    But Giga anticipates the number of small businesses doing business online will increase from 129,600 in 1998 to more than 2 million by 2002.
    Locally, we'll be hearing more about companies like Home-Aid-Healthcare (www.homeaid.com), which plans to start selling medical services over the Internet this fall. Television's Alan Mendelson of Valencia will soon add online auctions to his site, Moredeals.com.
    Customers of Washington Mutual Bank, with six branches in the SCV, can already transfer funds, look up balances and pay bills over the Internet. Valencia Bank & Trust offers PC Banking, using dedicated software, for business customers, and will roll out the service for personal accounts late this year or in early 2000. (One-quarter of U.S. households will bank online by 2004, according to Dataquest.)
    For now, most Santa Clarita firms with an Internet presence (other than Internet service firms) use the Internet to market and expand their existing businesses, rather than as a new place to make sales. At Californiawills.com, for example, local attorney Michele Mann offers free legal advice; DCH Technology, a developer of hydrogen fuel cells and sensors, uses bulk e-mail to promote itself in preparation of its initial public offering.
    As more companies begin making better use of the Internet, and as the Internet continues to change the dynamics of doing business, municipalities that adapt most readily to those changes will be best suited to sustain the health of their economies.
    Some cities are ahead of others— and they aren't all in the Silicon Valley or Seattle (where Nordstrom announced this week it will start selling shoes at Nordstromshoes.com, with the rest of its catalog offerings to follow) or New York (where, some analysts suggest, the success of Barnesandnoble.com is why Barnes & Noble is building fewer new store locations this year).
    Some of the big-name Internet firms are literally right down the street— like in Westlake Village, where, according to the commercial real estate firm of Grubb & Ellis, NetZero Inc. just signed a 10-year, $13 million lease on a 49,000-square-foot office building.
    NetZero was the small start-up that made a big splash when it offered Internet access and e-mail for free, forever. Revenues come from advertisers, who pay NetZero to display their ads on a little screen that pops up when NetZero subscribers are online.
    NetZero launched its free access last October. In June the company had 613,000 active subscribers (1.17 million total since inception). In July the company filed registration papers with the Securities and Exchange Commission to go public.
    Perhaps the folks at our own City Hall are catching on. One asked this week, rhetorically, how Santa Clarita benefits, sales tax-wise, if somebody in Santa Clarita buys something “from a guy in Fresno selling memorabilia on the Internet.”
    It shouldn't take much to figure out that Santa Clarita benefits when there are more guys in Santa Clarita selling memorabilia on the Internet to people in Fresno.
    Leon Worden is The Signal's business editor.

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