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Death of the free Web

The idealistic dream of a digital Camelot where everything is free is giving way to cold fiscal reality.


Decline of New Economy will make everyone pay

By CNET News.com Staff
June 6, 2001, 4:00 a.m. PT

It's payback time.

The idealistic dream of a digital Camelot where everything is free is giving way to cold fiscal reality. Companies and Web sites are beginning to charge for content and services to survive the New Economy's 2000 crash.

If the notion of an indefinitely free Web was naive, it was perpetuated by the unbridled hubris of the dot-com industry and Wall Street, which created the myth that growth through Web site traffic would automatically turn into cash. When that fallacy was exposed, many paper empires built on inflated stock prices came tumbling down.

The consequences of this debacle are not only financial: It could lead to a cyberlibertarian's nightmare, a place where large corporate interests define the online experience for the vast majority of the public. That, in turn, raises the specter of a new kind of digital divide that splits society into multiple classes depending on their ability to pay--a system that severely restricts the free flow of information as we know it today. 


Gated communities on the horizon
The new Internet may be dominated by a handful of megacorporations able to promise the safety and convenience of paying for Web usage in one place, thus avoiding a maddening jumble of per-click charges, sliding storage fees and daily content subscriptions.

A segregation of information feared
As some content becomes exclusively digital, many people fear that those who don't pay will have less access to information, and groups with scarce resources won't be able to create or transmit content to people who may need it the most.

Blind faith in traffic as Web currency
The universal acceptance of raw visitor numbers as the Internet's unofficial currency created the false assumption that Web portals and other advertising-driven businesses guaranteed the viability of free services. How was everyone duped so easily?


Empires pay billions for more visitors
The unprecedented speed, number and price of Internet combinations formed to boost traffic has redefined the corporate merger, which critics from Washington to Silicon Valley now say contributed mightily to the decline of the overall industry.

Were underwriters really undertakers?
The practice of underwriting--taking a company through the maze of Wall Street to sell its shares on public markets--has fallen under increased scrutiny since so many investors lost their money in the free fall of Internet stock prices.

Executives benefit from Street smarts
Despite investor criticism and sour-grape griping, financial planners say the Internet CEOs who sold their companies and cashed out were simply following standard investment advice. And in retrospect, they look like geniuses.


Stubborn AOL may have last laugh
After years of mocking America Online as hopelessly "old media," Web portals are reviewing the subscribed service to see if they can replicate at least part of its strategy in an effort to salvage their own businesses.

Free ISP concept too good to be true
The idea sounded irresistibly simple: Give consumers free Internet access, draw traffic, and charge advertisers for exposure to those surfers. But advertisers wanted to reach different kinds of people, namely those willing to spend money.

Speeding toward another revolution
The Internet world may undergo yet another sea change if high-speed broadband connections become commonplace in the home. New content and services not possible with today's standard dial-up speeds may redefine the medium once again.


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Editors: Mike Yamamoto, Evan Hansen, Sandeep Junnarkar, Julie Laing, Lara Wright, Jennifer Balderama
Art: Ellen Ng, Melissa Parker, Jeff Quan
Production: Ben Helm, Mike Markovich