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DeRose is most sought after

Gene DeRose, chairman and CEO, Jupiter Communications, is probably the most sought after man at the IIW '98 conference in New Delhi because he's in the business of watching consumer behaviour on the Internet.

He calls it studying "Internet economy where Jupiter Communications provides analyst services to companies on how to best understand and profit from the future".

"Companies need to think on how they plan before they have any Web site operations. How you structure, who is your target, who are your vendors and so on and so forth."

DeRose believes the single most fundamental catalyst to push the Internet economy came from the "telecommunications reform, which allowed consumers and users access for a low cost".

DeRose offers some background pointers to the development of the Internet in the US. "It was growing at a healthy clip but now it's levelling at a stable point, it's expected to grow more rapidly in Asia and Europe."

DeRose states very categorically: "Yesterday, content was king, today commerce is very hot. Productivity and commerce are really the driving forces of the Internet."

"Jupiter Communications does surveys every six months with the help of research partners scattered all around the world. Again, increasingly people are getting a computer and modem because they want to get online. In the US, 5.5 million people will go online by 2002," he revealed.

"And in three to four years the projection of world users will be 2050 million and Europe will catch up with US in two to three years," DeRose predicts.

More statistics: In the US computers have become a family phenomenon with a huge percentage of women using the Internet. The critical mass of those accessing sites that offer books, cars and travel is increasing.

Recent studies reveal that 1.5 per cent adults are online at home, 55:45 male/female use the Internet, 8.2 hours are spent on a weekly basis, 0.7 work from home, 0.5 children are online at home and 0.2 children are online in school.

DeRose says: "The computer is actually eating into television viewing time. In the US, Web sites, which are high on content-entertainment, are losing out on creativity. It has become unfashionable to put your investments here but commerce is the path to look for. For instance, there is no impulsive shopping that you see on the Web, a survey revealed that 77 per cent of the shoppers go to do a purchase and 80 per cent of them will go to multiple malls in order to get what they have come out to get."

While there is some good news there is some that is not. "The commerce infrastructure is very slow to develop, the credit cards are secure but can still get intercepted, access is not getting cheaper, bandwidth has not improved and convergence of Web enabled technologies co-existing is still a far away dream."

He says: "Cable modems are not going to be here for years. ADSL may be the way. The jury is out, Web TV has potential but will take 5-7 years for a critical mass to develop. Digital TV is like the cart before horse issue. The American consumers still feel they need improvement in infrastructure even as there is an overkill on the marketing front with unmatched performance capabilities."

De Rose predicts it will be a long time before there is a technology convergence. Market convergence will come about sooner. It seems that a significant number of people, 33 per cent, have the television on but are also hooked to the event online.

Another truth: No one company can own the entire Internet delivery chain end-to-end. From the server, creator, sender, to the backbone network are all different businesses. "But, of course, some may disagree," he laughs.

De Rose advises that for anyone in the business, it's good to watch Microsoft, Microsoft and Microsoft. They are not as subversive as they are made out to be and in their latest business model, which they showed us, they have looked at every little stage in the entire delivery chain. They are smart, so it makes sense to watch what they're doing and possibly pick something up.

"Today what they want in the US is landscape, in the portal, a site that draws people and sends people different ways. But any site that does this has the ability to be called a portal.

"Microsoft in theory can be called a portal. Portals will emerge on 95 per cent of desktops, not on browsers because 75 per cent never change their browser settings. Access-navigation-content will drive the portal idea in the next five to seven years. It all adds up because a whole network of advertising and marketing continuum leads to commerce. The magic mantra for e-commerce is to offer advice, information and transactions.

Most organisations face the dilemma. Should they centralise or decentralise? Well, DeRose says "Technology needs to be centralised but brands need to be decentralised. So when the manager makes the decision, he has to develop over time. Essential things to look at are: business, planning, clear vision, market research, solid managerial time, goal accounting deadlines, accurate production cycles, allocated marketing and promotion and a reasonable return scenario." The Sonic Web site, DeRose feels, is the perfect example of this.

How do you plan?

This is where DeRose's prognosis comes in. "Interaction and communication is the underlying key. Consumer demographics are important. Analysis tools are important and a real-time analysis and a reality check on market space are also necessary.

"Once again, the issue to take care about is that e-commerce will not earn a critical mass till more than 10 years now. Consumers are still not comfortable about the security matter. Deployment should not be done in fits and starts," DeRose warns.

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