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Jean-Louis Gassée Column

Watching the Pendulum November 1, 2000 It's more fun to watch a pendulum than an hour hand. Not just because there's more movement. With a little exercise of memory, there's also more merriment. I don't mean ancient bloopers such as a Business Week cover story in April 1980 titled "Exxon's Next Prey, IBM or Xerox?" No, what I have in mind is the current swing towards "The Death of The New Economy." What we told you is no longer "operative," as they said in an earlier White House. We're buying back your file copies of our magazine. No need to rehash this week's jeremiad -- the e-sky is falling. Perhaps. There are no tall buildings to jump from in Silicon Valley and I haven't noticed an increase in other forms of self-termination either. Having nothing to add to commentary on the stock markets, I'll focus on New Economy questions instead. First, is there one? If so, what does it mean and what does it amount to? Let's look at the automobile. It's more than 100 years old, but is there an automobile economy? Certainly there's a huge auto industry, but no one ever said it created a New Economy, or an Auto Economy. The main reason is that the automobile became pervasive in our lives, part of the fabric. The telephone lends itself to similar analysis. The Internet too is destined to be woven in our lives. At some point, the New vs. Old, Internet vs. non-Internet question will become moot. It will seem bizarre that it was ever asked. Note that I've exchanged "Internet" for "New," because when one writes "New Economy," one really means "Internet Economy." The next implied thought behind "New" is new laws -- of physics and economics. Read that way, what the pendulum swing to "The Death of the New Economy" actually means is, some misguided people, not us, hyped new laws of physics and now we're letting you know there aren't any. If only it were that simple. Nothing should ever be done for the first time. Let's not even mention the hype and exaggerations. Yes, there were rediscoveries of old business models, such as the phone company model of large investments and zero variable costs. But there are also some new laws. The law of accumulating choice real estate locations for one's business and raising prices once the oligopoly is established only applies in the real world where there is a physical limit to the length of Rodeo Drive, not so on the Net. Hence the misplaced expectations and empty dot.com coffers. The Internet, the Web, is more important, more profound than the telephone. It carries more data types and also a special type of active information known as programs. More than the telephone, the Internet will influence our actions, our thoughts, our emotions. Bill Gates once dismissed the notion of creating an Internet division at Microsoft because it would be like creating an electricity division; everything uses electricity. He was right and, incidentally, started an Internet division at Microsoft. Now Microsoft doesn't breathe a line of code disconnected from the Web. That should answer the "what does it amount to" question. There is, I think, a possible explanation for the pendulum swings, for the hype and the pessimism. Going back to the automobile and the telephone, neither appeared to impact us with the speed and magnitude that the Internet has. Hence the exaggerated expectations and reactions, the frenzy of buzzwords, the grasping for concepts. I choose to see this as good news. Chaos means there is more room for new players.

Past Columns: March 7, 2001 Intemperance Makes the Suit Look Bad February 7, 2001 The Web Device of Choice at Home January 17, 2001 Transfer of Power December 6, 2000 One Step Closer November 15, 2000 Thoughts on Comdex 2000 November 1, 2000 Watching the Pendulum October 4, 2000 Plus çà change... September 6, 2000 Connected Appliances: A Field Report August 16, 2000 Sub-PC vs. Appliances July 12, 2000 The Victim Microsoft June 7, 2000 The Power of Words May 31, 2000 The First Be Shareholders Meeting May 24, 2000 Intellectual Property and Internet Appliances May 17, 2000 Spreading the Virus May 10, 2000 Numbers and Feedback May 3, 2000 Manufacturing Consent

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