E-commerce: the best is yet to come

Some Internet pioneers who survived the roller-coaster of the dot-com boom and bust cycle said Friday that the ride has only just begun.

Much work and much opportunity lie ahead for e-commerce companies, executives from Yahoo, VeriSign and CNET Networks (which owns ZDNet UK) said during a panel discussion in Palo Alto, California, on Friday to commemorate the 10-year anniversary of e-commerce.

"We haven't even started yet; we're really in 'E-commerce 101,'" said Dan Rosensweig, chief operating officer of Yahoo. "I think this is going to get really fun in the next 10 years."

Though the date is debatable, it's thought that the first secure e-commerce transaction took place sometime in the summer of 1994. A company called NetMarket, now owned by Cendant, claimed it conducted the first encrypted Web transaction on Aug. 11, 1994, with the sale of the Sting CD "Ten Summoner's Tales." Since then, e-commerce has become a relatively small, but booming sliver of the US economy. According to Department of Commerce figures, e-commerce accounted for 1.7 percent of all US consumer sales in the second quarter of 2004.

The panellists were enthusiastic on Friday about the prospects of increasing that amount closer to a double-digit figure, despite growing fears over identity theft, fraud, privacy invasion and online nuisances such as viruses, worms and spam that have taken root on the Web right along side online shopping.

Panellist Shelby Bonnie, chief executive officer of CNET, acknowledged that businesses could be more proactive about attacking the dark side of e-commerce.

"Industry leaders need to be the people that solve this, so that folks in Washington don't wake up wanting to do something about it," Bonnie said.

The panellists offered an array of ideas about how e-commerce might evolve in positive ways during the next few years. Some of the ideas were new, and others have been discussed for years but have yet to take off. Most speakers agreed that the sales of music, movies, games and other digital products represent one of the most exciting and dynamic areas of e-commerce. Internet visionaries are also working on ratcheting up so-called personalisation and localisation technology to make Web sites anticipate a shopper's every need wherever they happen to be.

Another holy grail is the prospect of luring consumers to shop over their cell phones -- a big trend in Asian countries that hasn't caught on as much in the United States.

Rosensweig and Bonnie predicted that Web logs and online communities such as Friendster would come to incorporate e-commerce features through "favourites" lists for music and games. The panellists agreed that online auctions and the migration of electronic transactions from proprietary Electronic Data Interchange networks to the Internet, will continue to grow and thrive.

Panellist Mary Meeker, an Internet stock analyst at Morgan Stanley, predicted that site outages would become more frequent during the next few years as the Web grows more complex. She also said the long-awaited rise of online "micropayments," which are payments of only a few cents for goods and services bought online, is just around the corner. But fellow panellist Charles Jadallah, executive vice president of Merchant e-Solutions, disagreed. They made a 10-cent bet on it -- and Meeker said Jadallah would have to settle the bet via micropayment if she won.