DOING BUSINESS IN THE WIRED WORLD

Since 1993, use of the Internet and the World Wide Web has exploded, c reating a global ''infostructure'' to support commerce. Today in New Y ork, costs to publish on this infostructure are as low as $3,000 for s erver hardware and software, and $650 per month for a shared T1 connec tion. Individual dial-up access costs around $15 per month and continu es to fall. This and the Internet's usefulness will capture an estimat ed 377 million users by 2000. The 1997 Nielsen-CommerceNet survey of I nternet demographics estimated 50 million people over the age of 16 in the US and Canada had Internet access. About 37 million had access to the Web. Both the Nielsen and Hermes project surveys found Internet u sers are well educated and affluent-ideal targets for marketing. An es timated 5.6 million users have already purchased products over the Int ernet, and this method was especially attractive to those who valued c onvenience more than price. Thus the Internet is rapidly becoming the largest interactive multimedia infrastructure for marketing and is sup planting some traditional media. Although in its infancy, e-commerce p romises to dramatically alter the structure and processes of commerce. Managers will have to invent new business models that reemphasize sca le, differentiation, and brands to effectively compete on a noisy info structure with low transaction costs. They will also have to spend sub stantial time redesigning transaction processes and participating in i ndustry groups to develop new e-commerce conventions. Effectively impl ementing these strategies and simultaneously reconciling new and exist ing business models will be key to a firm's success.