What's the most important commodity in cyberspace? Trust. And brand names are more important than ever, according to Evan Schwartz. He's reported on companies making -- and losing -- millions of dollars on the World Wide Web for Wired magazine, Business Week and in his book, Webonomics.

      The Internet, Schwartz believes, is driving fundamental changes which are transforming entire industries. Where traditional economics dealt with scarcity, "webonomics" deals with abundance. Technology is changing everything from how we get our groceries to the economic drivers for today's mega-mergers in the financial industry. Industries most affected are those whose products and services are information rich, where you would do research or ask a friend for a recommendation. Automobiles, finance, books and travel are high on Schwartz's list.

      Niche markets are where the value hides, Schwartz reports. That means the site with the most potential is one where you entice people to return faithfully, over and over, not the one with a million one-time-only hits. In case you're one of the "middlemen" whom common wisdom has pronounced a thing of the past, take heart. Schwartz sees a growing need for a whole new breed of intermediaries. He's confident re-intermediation, not dis-intermediation is upon us.

      At the heart of the transformation Schwartz sees is a move away from the mass media to which we have all become accustomed. The Internet is personal. It's interactive. One consequence is that Baby Boomers should beware. Seniors and the young are ahead in adapting because they are less committed to the mass media which defined the ïBoomer experience.

      E-commerce is not all new. It's still vital that you know your industry, Schwartz advises. Brands are important, though he says it's now "digital branding." Marketing those brands is still critical, though it's no longer the constant repetition that made mass media marketers like Coca-Cola successful. Now the trick that brings people back is constant innovation.

      Avoid underestimating a website's costs in time, dollars and people, he warns, and suggests you continually enhance the interactive nature of your site. Build agility into your thinking. The bits and bytes will follow. And build your tolerance for not knowing what kind of company you will be 90 days from now.

      The one thing Schwartz is confident has not changed is what capitalism does best: find the unfulfilled need and meet it. That's still true whether your space is measured in square feet or cyber.

Conversation 1

Evan Schwartz describes to Paula Gordon and Bill Russell the enormity of the changes the Internet has brought to commerce. He explains it's power as the first personal media and the first interactive media and tells how these fundamental changes has yet to be understood.

Conversation 2

Contrary to the "over-hype" which often surrounds technology, Schwartz explains why he thinks electronic commerce has, in fact, been under-hyped. He dispels myths about security threats on the Web and reports how significant numbers of people are shopping on the Web, spending dollars at an exponentially growing rate. He uses automobile sales and the sale of books as examples. He explains the advantages products and services have which are information rich. He distinguishes pet-rock sites from those which are transforming industries. He explains his concept of digital branding and how one builds one's brand, a process, he says that's a lot different form how Coca-Cola has done so in the mass media.

Conversation 3

Schwartz expands on how the Web has fundamentally changed the book and travel industries. He explains how the concept of self-service applies to web sites and champions sites that offer personalized knowledge and service. He challenges the concept that the Web is causing dis-intermediation and explains why he thinks re-intermediation is closer to the truth. He gives examples of how the Internet is changing just about everything, describes the world which has been displaced, and suggests what everyone must do to keep up with those changes.

Conversation 4

Trust, according to Schwartz, is the most important commodity on the Internet and tells us why. He explains why "webonomics" is the opposite of economics. He offers reasons why Baby Boomers trying to do business on the Web are confused by their experience in the mass media. He tells why he is not looking forward to a full-motion video Web and offers upcoming experiences with the Web which he believes are more important than higher bandwidth. The importance of converting website visitors to loyal customers leads to a consideration of the value proposition of the Web. When people guard and why they give away their privacy takes us back to a consideration of trust and brand names.

Conversation 5

Schwartz describes several very profitable websites in a variety of industries and gives his explanation for why they are making money. He uses newspapers as an example of how new revenue sources can be generated from old ones. He compares the penetration of television to that of the Internet, and compares the experience of telephone companies to what we might be able to expect in the immediate future of the Web, from customized golf clubs to Michael Dell's success selling computers.

Conversation 6

Know your industry, Schwartz counsels those who want to do business on the Web, whether you're looking for a niches or a specific type of customer. He describes new skills we will all need as this entirely new economy begins to take hold. He summarizes suggestions for avoiding underestimating the costs and the effort of a website, enhancing the interactive nature of your site, avoiding pitfalls which will decrease rather than increase revenues and building agility into your thinking.

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