Death on the Net

Twittering, the online activity du jour, was suddenly everywhere last week, even in the mainstream print media. A sure sign, perhaps, that it has peaked, and is on the road to the graveyard for once-fashionable internet crazes. David Randall reports

Peep through the gates of the Internet Cemetery, and you can see the gravediggers are never idle. Day after day, hour after hour, the dead domains come in, ready to be interred with all the other websites which withered from a lack of interest, ran out of money, were overtaken by a rival with snazzier technology, or just lost their cool.

The headstones tell their own story: "HotBot.com. Dearly beloved search engine. Born 1996. Downgraded 2002ish. Forever in our bookmarks". "Webvan.com. Born 1999. Died 2001, of a broken business plan. A lesson to us all." "Boo.com. Online Fashion Retailer. 1999-2000. Only sleeping". And, in a less well-tended corner of the graveyard, where the flowers haven't been changed for months and the cheap lettering is starting to fade a little, are millions of blogs and home pages. "Janice Swinley's Blog. Born, with jottings from family holidays, in 2005. Died, after a long battle with boredom, in 2008."

And overlooking the cemetery, in a virtual kind of way, is another place: the Twilight Home for Once-Fashionable Websites. Here, with rugs over their knees and their carrots mashed up for them, sit the once great names of the net: Compuserve, Lycos, Excite, Prodigy, GeoCities, and AOL (a fitting punishment for smothering the world with their introductory discs). Netscape's heading there, and so, too, is Friends Reunited. And, if last week's runes are read correctly, the day may not be far off when Second Life, Facebook and Twitter end up there too.

Not so long ago, these sites were cutting edge. Now, your granny's on Facebook and threatening to poke you. Second Life's for saddos and corporate suits who thought there might be a bit of marketing mileage there, and Twitter's celebs have got the ghostwriters in. The last two have even been discovered by the designers of the new National Curriculum. Worse, Twitter's been embraced by the mainstream. It had 22 national press mentions in the first week of the year. Last week, articles on the phenomenon mushroomed to three figures. If you're a hot website, you can survive almost anything but that sort of attention.

What Friends Reunited (now worth only a third of the £120m that ITV paid for it in 2005), Facebook and MySpace (whose visitor numbers fell in February) are experiencing is the breathtaking speed at which the internet evolves. Sixteen years ago, only one per cent of all internet traffic was on the web. In 1995, newspapers were charging for website content (many are considering doing so again), and the most popular site on the net was Pathfinder. Who remembers that now?

And it was only a dozen years ago that I and three colleagues forswore day jobs, hawked around a start-up, and met investors – successful, hard-headed business people – who asked, in all serious ignorance, the question: "What is this internet?" I remember, in 1998, showing an estate agent a demo of our website that could search property details online. He flatly refused to believe it would ever happen, and showed us the door.

But, despite a saintly seedcorn investor who will never, I'm ashamed to admit, retrieve his £30,000, what defeated us was the speed of change on the net – even in 1999. We'd started out with a business plan based on selling ads to pairs of British eyeballs at the going rate of £20 to £25 per thousand. Not much more than a year later, that had fallen to about £4 to £5 per thousand, and we decided that, since we no longer believed our own business projections, it seemed cheeky to ask anyone else to. So, encouraged by wives who were strangely reluctant for us to bet our homes on the project, we quit, and returned to our former occupations.

Within a year, investors had grasped what the internet was, even estate agents believed, and the dot.com boom was under way. You could flog a hairbrush to a hedgehog providing it had .com attached; and no idea, however mad, was unfloatable. There was kozmo.com, which promised to deliver anything you wanted within the hour for free. Flooz.com, which thought it could replace credit cards with an online currency, and found out the hard way ($35m down the toilet) that it couldn't. Scores of over-hyped sites jostled to be The Next Big Thing. None made it.

What only slowly dawned on the markets (and is still ignored by some investors) is that in order to have a business you have to have at least the faint prospect of revenue overtaking spending. And, in too many cases, the business model, while highly efficient at disposing of cash, was not too clever at getting it. But investors piled in. Dot.coms had money to burn, and many proceeded to do exactly that. Boo.com, for instance, managed to incinerate £125m in six months.

Some start-ups survived long enough to discover the second great truth about venturing on to the net: almost anyone could do it. The barriers to entry (ie, the cost of starting up) are quite high in conventional retail and media. It takes many millions to run even the most modest TV station, newspaper or chain of shops. But do it online, and the costs can be as low as a desktop, a cable modem, plus your time.

That was what Steve and Julie Pankhurst of Barnet, Hertfordshire, started with when they began a UK variant of American website Classmates.com from their home in July 2000. Within a year, they had 2.5 million members, and by 2005 there were 15 million. For a while, Friends Reunited had British social networking to themselves. You could post discreetly phrased boasts about how well you were doing, and read the artful entries from old school fellows. There were downsides. Several couples found that Friends Reunited meant Marriage Disunited when their partners discovered that the embers of old relationships could be fanned into panting life by a few emails. And you had to respond to the former schoolmates who chose to get in touch. They were not always the ones you would have chosen. And so, around the time ITV was buying FR (where profits are actually made, despite growth stalling), along came a way you could select your online contacts – social networking sites like Friendster, MySpace, and Facebook.

But there were drawbacks here, too. What you put on your page, however insane it looked in the cold screen of morning, was forever retrievable, and such sites also depended for their success on being inclusive, online samizdats for young people to witter, flirt, show off, and commune. They take on a different hue when your parents join, and your kid brother's primary school will soon be teaching him the basics as part of the National Curriculum.

And then there's Twitter, the micro-blog site that lets you post your little doings and thoughts umpteen times a day, providing they're only 140 characters long. All very intimate, until you realise that such celebrities as Britney Spears and the rapper 50 Cents have hired ghostwriters to do their twittering for them. All very hip, until you go to The Guardian and see that the paper's sleeveless pullover wearers are at it. And all very well, until you realise that using Twitter places you considerably to the north of Narcissus on the vanity scale.

The churn on the net is considerable. Only a few months ago, Twitter was so fashionable it almost hurt. Today, it seems slightly old hat, and this week's sensation is Omegle.com, which puts you in immediate one-to-one touch with complete strangers. Founded by an 18-year-old American, it's the talk of the blogs now, but could be cold meat by late May. Applications and widgets come along at bewildering speed, and so, too, might regulation. Last week, the US began considering curbs on viral marketing, action that could puncture the revenue projections of social networking sites.

The websites with real permanence are those, such as eBay, which have locked users into business relationships. Or ones like Amazon.com, which have, with their stock and warehouses, raised the barriers of entry for anyone wanting to start an online bookshop to almost high-street levels. The sites which can't do that are vulnerable. They have no means of stopping a slightly smarter version, one that has the cachet of newness, replacing them.

Not even Google is safe in the long term. Somewhere in the school system there might be someone who, in a few years, will be a brainy postgrad, who, with a few fancy algorithms, invents a new way of searching. And, if that happened, Google would be in the Internet Cemetery, along with all the other dead domains, including mine.

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