Cyberposium 2000 - Visionary Main Panel

by Martha Lagace, Staff Writer, HBS Working Knowledge

What do you get when you take top executives from two of the biggest players on the Internet stage and sandwich them between two of the world's sharpest and most outspoken Internet analysts?

Lots of sparks, to be sure.  And sparks there were at the Cyberposium 2000 "Visionary Panel" as AOL's Robert Harris and Microsoft's Harel Kodesh met the Gilder Report's George Gilder and Morgan Stanley's Mary Meeker.

Gilder, an esteemed and irascible commentator on economic and technology issues, set the tone right from the start with a blistering attack on Harris's AOL and its pending merger with Time Warner.  

Amid the bandwidth explosion that's "at the heart of the huge opportunity we have today," said Gilder, "companies that understand that bandwidth will be virtually free will prevail. Companies like AOL and Time Warner that somehow still think bandwidth is still scarce — and that you can combine content and conduit — are going to fail pathetically. Content and conduit are completely separate systems; you can't combine them."

Harris, a longtime entertainment industry executive who heads AOL's broadband efforts, fought back. "This century is going to be an explosive century for the age of personal empowerment," he said. "That means individuals all over the world having access to data over these incredibly fast pipes, and I think they're going to buy it from the people that they love and trust.

"The fact is it's going to take a huge infrastructure of different companies.  AOL and Time Warner are not going to own the Internet.  They're not going to own media.  But they are going to represent the media company of the 21st century. There'll be others, but we're certainly positioned to be the prototype."

The battle continued, on and off, throughout the hour-plus panel, leading Microsoft's Kodesh to quip, in mock relief, "It's the first panel I've sat on in the last six months when no one's been yelling at me."

The More Things Change

But battles aside, the panelists had much to say about the future directions of Internet business, including the difficulty of predicting how and where it's going to go.

Since 1995, said Meeker. "We've had one theme every year that really captured people's imagination."  There was infrastructure with Netscape and UUnet, she said, then content and aggregation with Yahoo!, e-commerce with Amazon.com, business re-engineering with eBay, Healtheon and others. 

"The thing that's going on right now," said Meeker, "is instead of having one theme every year, we have about 15 things, and trying to figure out how to process it all is a really difficult thing. The challenge for us as analysts, investment bankers and venture capitalists is that we have to figure out what the categories are and who the leaders of each category are going to be.

"There will be a lot of people with attention deficit disorder en route."

"We're so early in this evolution, it's very difficult to predict," added Gilder. "One measure is Internet traffic.  It's addressing one-tenth of one percent of its potential volume.  That means there's just huge volatility, huge opportunity."

Kodesh agreed.  "In terms of how the world is going to look five years from now," he said, "I don't have a clue, because everything is going to change."

One area that will be at the center of that change, the panelists agreed, will be wireless. Kodesh dismissed those who claim the potential for wireless Internet is limited because people would not want to be online all the time. Anyone with a cell phone is already online, effectively, all the time, he said.

A PC in Your Pocket

"People with cell phones essentially have a phone booth in their pocket," said Kodesh. "There's no reason to assume they will not be able to have a PC in their pockets.

"If you look at what the Internet did over the last five years," he explained, "it solved the first mile problem: the ability of people to get information, whereas before that they had to send mail and call people.

"But the last mile problem was not solved – because people are still far away from their information," Kodesh continued. "Sometimes the information shows up on their PC when they're not at home or in the office. I have everything in the office and I'm never in the office. So once you get the information you have to solve the problem of how to take the last 10 yards and the last 100 yards: how to get the information from where it is to where I need it to be, which is right in front of my eyes."

The panelists also agreed that infrastructure and technology changes, including wireless and increased bandwidth, will result in new forms of business that we can't even envision today.  Broadband and wireless, said Harris, "is not just about putting video on other devices.  It's about completely changing the way people interact with these devices and creating entirely new advertising models and new distribution models."

Amid all this change, said Kodesh, "the companies that will survive are the ones that acknowledge that nothing will stay the same."