A paper introducing a broad categorisation of Internet-related business
activities and discussing the economics of investment in those areas.
Copyright 1995, Tony Smith, Meme Media
The View From Australia, September 1995
The Internet phenomenon is spawning a complex web of business relationships.
The purpose of this paper is to introduce a broad categorisation of Internet-related
business activities and to discuss the economics of investment in those
areas. At this early stage, there remains a significant degree of vertical
integration, especially by major concerns in pursuit of a captive market.
However such integration runs counter to the free wheeling nature of the
Internet and better targeted businesses are rapidly becoming more prominent.
Within the broad categories presented, a further level of specialisation
is already starting to occur.
chart suggests the flow of funds between these major categories, from
the initial discretionary purchasing power of organisations and individuals
through to that significant residual which flows out to telecommunications
network providers and content owners.
During the few short weeks it has taken to prepare this paper, the rate
of development of the Internet has been underlined by the realisation of
several identified opportunities. In particular the entry of Access
Providers into rural areas is well underway.
The recent introduction of a national dog registration system sponsored
by a pet food company, in conjunction with Melbourne's main Lost Dogs Home,
provides an exemplar of the 'latent demand' driving developments. People
are finding that the Internet enables them to do things which they have
always wanted to do, but for which they have not previously had the means.
Compared to the desktop publishing revolution of the late '80s, the rate
of development of applications of the Internet is variously estimated at
between four and ten times higher.
A categorisation of common Internet Business activities
There are many opportunities to connect a computer to the Internet and use
it to provide a specific service to some subset of Net users. With the acceptance
of new ways of processing financial transactions, many of these will produce
reasonable returns on a relatively low cost of entry. It is expected that
the best returns will be produced in areas requiring greater expertise to
add extra value. Following the categorisation developed in this paper, three
of the most productive areas are likely to be: Organisation/Work
Group Services; Information Access; and
Design and Prototyping. However it is also
evident that any Internet service provider which clearly positions its business
with respect to this or some other analysis will increase its prospects
relative to a business which tries to be all things to all people. For those
interested in taking some risk with the prospect of high return, there appear
to be some excellent opportunities for the development of Internet-oriented
software 'platforms' or of remotely controlled video feeds.
 see Equipment and Software
 see Monitoring and Security