[Marketwatch] Consultants Fade As Net Grows Up

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From: Adam Rifkin (adam@KnowNow.com)
Date: Sun Dec 17 2000 - 18:54:36 PST


AprilFIR... whoops, I mean MarchFIRST... got a $150 million reprieve
this week:

    http://news.cnet.com/news/0-1007-200-4148059.html

At a biweekly payroll of $30 million, that emergency cash probably won't
last very long...

    http://cbs.marketwatch.com/archive/20001212/news/current/rebecca.htx

Consultants fade as Net grows up
By Rebecca Eisenberg, CBS.MarketWatch
Last Update: 1:11 PM ET Dec 12, 2000

SAN FRANCISCO (CBS.MW) -- This is the story of full service Web
consultancies: or, why Scient, Viant and MarchFIRST were guaranteed to
live short lives.

In 1986, when I entered college, the Internet looked like a bunch of
online bulletin boards to me, and it was where I picked up and dropped
off my course assignments at college, and how I sent e-mails to my
friends.

It still looked pretty much like a bulletin board during the first half
of the 90's, when I was procrastinating, first a law student then a
lawyer, reading and posting to Usenet newsgroups called things like
"alt.tv.Melrose-place and alt.angst." Back then, there was not much of a
Web, but people did start creating text-based home pages out of a
mark-up language called html (we read the pages with a text browser
called lynx).

The Internet was the way that we expressed ourselves (in our home
pages), communicated with others (in emails and on Usenet), played games
(on multi-user domains called MUDs and mushes), met people (on irc and
BBS's) and conducted research on things we wanted to know about, like
computers. It was useful, fun, efficient and ever-evolving. In short, it
was the coolest thing we had ever seen.

But it certainly was not a way to make a living.

Curious people who wanted to understand what all of this Internet-stuff
meant bought a book called The Internet for Dummies, published in 1994,
which pretty much explained what was out there, from Archie to FTP, to
Gopher, to irc to Usenet to WAIS to the Well, all in 427 pages. The
"World Wide Web and Mosaic" (the precursor to today's graphical
browsers) took up only 15 pages. I still have my copy of that book,
although it does not help me much anymore.

Then there came Netscape, and everything changed.

Founded in April, 1994, the company released its first product, a free
graphical browser called Mosaic Netscape in October 1994, which quickly
became the standard by which most of the Web (what Web existed) was viewed.

Then, a mere ten months later, something else big happened. Netscape the
company went public, in one of the most spectacular IPOs in history, and
all of sudden something was created: the "Internet industry."

I quit my job two months after that, landed my first client in a local
record store (whose Web site which I helped build quickly started making
money), and had moved back to San Francisco by the end of the year to
join a small group of idealistic former something-or-others trying to
build something out of what we considered to be the coolest thing we had
ever seen - the World Wide Web.

Gulch

Back then we gathered in an area called "multimedia gulch," labeled that
by the Rolling Stone article that profiled a bunch of its early stars in
late 1995. I joined up with a small Web services and "virtual community"
company called Cyborganic. Friends of mine worked at similar companies -
Organic, Hotwired, Vivid, BigBook, Transphere Interactive. Out of all of
those, Organic is the only one still standing (although Hotwired, Vivid
and Transphere went through various acquisitions).

Most of us worked as Web consultants then, because that was the work we
were able to get paid for while we built things that we wanted to build
on the Web. Sometimes we worked as writers, reporting about the
Internet, because we were the only people whom editors at traditional
publications could find who knew what the hell was going on with the
funky looking pierced people who spent a lot of time on computers.

No one made any money back then, even though the Netscape IPO had
resulted in venture capital funds teeming with billions of dollars to
spend. The problem was that venture capitalists were not sure where to
spend their money.

Nonetheless, something was changing. Fewer and fewer people were
confused when we tried to explain what we did for a living. More and
more Internet-related stories started appearing in mainstream newspapers
- so many more that we all of a sudden were not having to e-mail others
about news stories in excitement when they were spotted (a couple times
a week or so).

More companies started going public. And, happily, big companies like
McDonald's, Procter and Gamble, Nestle, GM, Wells Fargo and Macy's all
decided that they needed to have Web sites.

Most importantly, perhaps, while they all wanted Web sites, none of
these companies knew how much it really cost to build one.

Hence the birth of the large Web consulting services firm. At US Web,
CKS (now both part of MarchFIRST (MRCH: news, msgs)), Organic (OGNC:
news, msgs), Agency.com (ACOM: news, msgs), then Viant (VIAN: news,
msgs), Scient (SCNT: news, msgs), Razorfish (RAZF: news, msgs) and so
on, thousands of Web consultants were waking up to the fact that their
clients had no knowledge in their area of expertise. They could bill
them millions of dollars for doing what many of them started out doing
in their free time, for no money: building Web sites. It was amazing,
and it made many people rich very quickly.
 
But something happened along the way. Traditional company CEOs started
listening to their teenage children when the kids insisted that building
a Web site really isn't that hard. Mainstream media became saturated
with Internet-related stories, de-mystifying what was formerly an arcane
subject into a more understandable one. And the formerly completely
na´ve clients became smarter.

Soon the game was over - and people knew that it really did not cost $5
million to put up a darn Web site. It costs money, but it costs a lot
lot less than that.

Web sites are important, but if you are smart enough you can build one
yourself - or with a five-or-six figure, rather than seven-figure,
outside budget. Web services companies, who had greatly overhired in
order to compensate for their overcrowded pipelines, had to cut back.

Still cool

Thus came the end of the full-service Web consultancy boom.

But here is the thing to remember: during all of this upswing and
downswing, one number unwaveringly increased and continues to do so: the
number of people who use the Internet.

No one would have guessed in 1995 that five years later 30 million
people would be members of an online service we laughed at: America
Online (AOL: news, msgs). No one would have guessed that what was then a
fledging online bookseller Amazon.com (AMZN: news, msgs) would sell more
than a billion dollars of merchandise over the Internet a year. And no
one would have guessed that a Web directory called Yahoo (YHOO: news,
msgs) would grow to turn an actual profit.

The Internet, which was once the esoteric computer-based network that
connected a bunch of nerds, is now such a mainstream aspect of human
life that having a services company dedicated to it and only to it makes
no more sense.

Companies no longer are so confused about what the Internet means. They
don't feel the need to do bizarre things like spin off their Internet
properties as a separate business, and they recognize the Web for what
it truly is and always was: a publishing medium, a direct marketing
format, a multi-media catalog provider, a digital distribution channel,
a communications platform, a research tool and a recreational
entertainment outlet.

The Internet is all of the wonderful things it was when we discovered it
a decade ago, only better, faster, cheaper, and available to millions
more people. We don't need Web consultants to explain that any more -
marketing departments do that job just fine, thank you very much.

None of this signals the death of the Internet. On the contrary, it
signals the very beginning of a new stage of the Internet economy - the
mainstreaming of the Internet. And if the past is any indication
whatsoever, this mainstream stage is going to be even bigger than the
one that came before it.

After all, the Internet is still the coolest thing we know. And -
whether you deny it or not - it is only getting bigger, more popular,
and cooler still.

----
Adam@KnowNow.Com

Where in the world is Brendan Eich?


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