Bob Lilienfeld worked for Procter & Gamble and the outfit behind the Muppets, and JoAnn Lilienfeld was a buyer at Bloomingdale’s. Nowadays he consults on solid waste and other environmental issues. His wife, a neatly coifed woman who looks and dresses like an upscale schoolteacher,^[2.1] has started a toy store called White Rabbit Toys in honor of the character in Alice’s Adventures in Wonderland. Bob enjoys technology. JoAnn herself is no slouch in that area. They are in their forties now but relish new marketing wrinkles just as much as when they were earning their MBAs from Northwestern University.

So Bob and JoAnn Lilienfeld have set up shop on the Internet, where, in a surprising but logical way that a mathematician like Lewis Carroll would have loved, their respective business ventures mesh.

Wandering through commercial listings on the Web, I discovered the virtual White Rabbit just as Christmas shoppers were crowding the corporeal White Rabbit up in Ann Arbor, Michigan. Bob was a technohusband par excellence. He designed the toy store online, claimed just the right address on the World Wide Web (http://www.toystore.com), wrestled with the technical issues, and helped take orders from customers, the first of whom lived in Brazil. JoAnn would pay Bob in his favorite currency: teddy bears. The big question was: Will they make any money at it? I electronically hung around their virtual store and chatted with Bob on the phone as the season progressed.

He and his wife were among the thousands of small business people who were trying new marketing paradigms on the Net, where the denizens hated intrusive huckstery but might take to electronic catalogues.

Compared to most other business people on the Internet, the Lilienfelds were quick studies. You could type an electronic address into your computer and see a White Rabbit logo and a greeting from the toy store in several languages. Then you clicked your mouse on the proper area of your screen and opened up a colorful catalogue with not only blurbs but also pictures of tops and puzzles and wooden toy trains of the kind your parents might have bought for you. Most of White Rabbit’s offerings were classics that you would never see at Toys ᴙ Us.

Bob and JoAnn Lilienfeld wanted their business to stand out. Soon their electronic forms might let you type in the age of your child, information about his or her interests, your budget, and other constraints. You would instantly receive tips on what gifts to buy. Even now, you could order online without talking to a human—not as heartless as it might sound, if you simply valued your time and telephone money. The electronic forms could even calculate the postage.

White Rabbit intrigued me, and others felt the same way. Within a few weeks of my first visit, they got calls from the Wall Street Journal and the Detroit Free Press. Some reporters had caught on to the obvious: While Hollywood and Washington were off prattling clichés about the overpriced medium called interactive TV—while Al Gore was cracking jokes on stage with Lily Tomlin during an entertainment summit disguised as an “information” one—entrepreneurs and Fortune 500 companies were trying ads on the Net. The Internet often narrows differences between large and small businesses. Even little ones can reach global audiences and, through well-planned Web areas, look like giants to customers in Rio or Tokyo. New cybermalls sprout up to get technophobic companies online by providing both technical and creative services. Corporations fight over addresses for the Net. Stanley Kaplan, a service that tutors students for academic examinations such as the Scholastic Aptitude Test, sued a competitor that stole the name kaplan.com. A writer for Wired magazine mischievously claimed McDonald’s name, which the hamburger chain hadn’t yet registered. Such oversights, however, were rapidly becoming the exception in an era when prime Web sites made the pages of Newsweek.

Even electronic hookers (“We go all the way”) were on the Internet—in fact, operating under the name “Brandy’s Babes.” They plied their trade from Arizona, the same wild and quirky state from which Canter and Siegel enraged the Net. And yet, if you cast the usual moral questions aside, the Babes seemed to be exemplary citizens of cyberspace. Not just hypesters, they posted specifics like prices, bust, hip, and waist measurements, and preferences in men. “No beards,” a Babe warned customers. “Employed men only.”

Unlike the hardsellers, the Babes did not inflict unwanted ads on thousands of newsgroups. And in line with the two-way traditions of the Net, they solicited messages from customers—dirty ones that the Babes might charge good money to answer. You could even dial up Brandy’s and see a live Babe at her computer with her impressive bosom exposed. The gig lasted several zany months. Fear of police raids grew, however, even before the ayatollahs in the U.S. Senate ranted against net.sex. I finally saw just a blank screen except for a laconic message alluding to “bad links.”

Separately a condom store was online as well. It offered medical information, supplied tantalizing odds and ends on such topics as “The Size of a Man’s Pony,” and wittily answered questions from appreciative readers. Like Brandy’s, it operated in a nonintrusive way.

The World Wide Web was also a virtual home for thousands of more conventional businesses such as the manufacturer of a toy gun that shot Ping-Pong balls, a city’s worth of bookstores, Godiva chocolate, and Ragu spaghetti. None other than the Home Shopping Network bought out a Net retailer specializing in computer equipment. Pizza Hut went online. And the United States was hardly alone in this trend. The Singaporeans were competing in the cyberpizza race—Shakey’s Pizza was girding to take orders, via a fax-Net link, from hungry scientists and students at the National University of Singapore. A large Irish bank advertised on the Net. So did the Royal Bank of Canada. It mounted a bilingual Web area for both English- and French-speaking customers who, once past the first menu, didn’t have to clutter their screens with material in the wrong language.

Some of the old technical barriers, of course, remained even in rich countries: most hardware was still rotten for doing home shopping. What the customers needed, and what Silicon Valley could not yet provide, happened to be small, affordable, sharp-screened computers that could colorfully show off the merchandise. The main way to look at the Net was through Mosaic-style programs. And even at 28.8 kilobits per second—the highest speed possible through widely available modems—it took too long to go from page to page of electronic catalogues. The biggest problem was the software installation, which could be tricky. Although software such as Internet in a Box simplified the matters, the Net was not yet TV-easy to use.

Even so, some companies were designing inexpensive gadgets, which could sell for mere hundreds of dollars, that would allow people to surf the Internet on their televisions. I hated the idea of anyone reading text off a blurry television screen. But at least the powers of the computer world were finally thinking of the Internet as a real, live marketplace. Just as important, Prodigy, America Online, CompuServe, and rivals were preparing to let customers reach Web sites from their proprietary networks.

Microsoft was planning point-and-click Internet capabilities for its Windows 95 operating system. And it had bought stock in a key Internet provider and would be linking its own network tightly with the Net. Advertising Age estimated the number of people able to access the Web itself—the best place for Net advertising—at several million at the start of 1995.^[2.2] And that number might push past 11 million by 1998, according to a report from a Massachusetts research firm.^[2.3] So, even if Internet merchants aren’t advertising in the most consumer-oriented of places right now, they might well be awash in new business later on.

The existing denizens of the Internet were more technical than the people on, say, Prodigy or America Online. Some software companies used this to their great advantage. A good example was Cyberspace Development Company, which had created an extraordinarily useful program called The Internet Adapter, or TIA. Most Net people couldn’t enjoy Mosaic-style viewers because their network connections did not allow this. But TIA let even Netfolks with $18-a-month accounts use Mosaic and other marvels. And to buy TIA, they did not have to go to a retail store.

If technically savvy, they could pick it up on the Internet itself. A digital key, transmitted via e-mail, allowed only authorized customers to use the publicly available files. Skeptics could try a test version of TIA for a few weeks before paying for it by check or credit card. Because of the low cost of distribution and, in my case, the lack of need for full consulting services, I spent just $25 on a product that might have cost a good $50-$75 if sold at the usual store. And by normally using a basic hookup with my Web software—as opposed to a deluxe, time-sensitive one—I could save hundreds of dollars a year.

The benefits of the Internet, for the Cyberspace Development Company and me, didn’t stop there. Via discussion groups, TIA sellers kept us customers up to date, and just as important, we could share tips among ourselves. We could also use the World Wide Web to catch up with long documents; in fact, updated versions of TIA could travel to us over the Net. All of this, including the elimination of the need to go to the store, was taking place on commercial networks such as CompuServe. But the costs would have been greater for Cyberspace and customers alike if the company had to pay the usual commercial rates for electronic mail.

Among the wares talked up online were upbeat prognostications about the Net itself. For $3,500 you could buy a report from a California consulting firm that said annual commerce on the Net and commercials services such as CompuServe would reach $600 billion by the turn of the century. I was skeptical. Merchants like JoAnn Lilienfeld would have to sell warehouse after warehouse of stuffed animals or toys or whatever the offerings were. In fact, $600 billion was a good 8 percent of international commerce. On reflection, however, the estimate from Killen & Associates seemed possible. Through the Net you might find a buyer for shipload of scrap iron or an office building, not just a stray teddy bear in need of a child. I phoned Mary Cronin of Boston College, who had written a well-regarded book called Doing Business on the Internet. It teemed with examples from Digital Equipment Corporation and IBM and many other computer-oriented firms. And she had researched it before most business people grasped the importance of the Internet. Yes, she said, the $600 billion figure sounded credible if you counted business-to-business transactions.

Daniel Dern, an Internet consultant, had his own opinion on the statistics. He said the Net was like the highway. Just what did you count—all the goods that went over the road? The combined salaries of the people on the way to work? I could see his point.

Whatever the exact numbers, the demographics and technology might be on the side of the many retail businesses if they stuck it out on the Net and kept expectations realistic. Scads of people in Generation Net were about to marry. They would buy houses and cars and whatever else mattered beyond stereos and Internet-optimized computers. Just in the late summer and fall of 1994, the number of Net-related businesses on the Web had doubled, and a good many of the newcomers were not technical. Could the Net really, then, enrich business people without technical backgrounds? Was there indeed money in what had once been the province of cash-strapped college students and dreamy researchers?

Plenty of people thought that the answer lay in the case history of Grant’s Flowers, which, like White Rabbit Toys, operated out of Ann Arbor, Michigan. Larry Grant had been a cover boy in an enticing article on the front page of the business section of the New York Times; the Internet pulsed with chatter about the electronic coups that he supposedly had achieved for just $28 a month. Excited Netfolks reported that he did not even have to type to his customers on the Internet; new orders just poured in on a fax machine with a Net connection. The California gold rush was almost a century and a half old. And yet, watching the Grant legend take off, I might as well have been among the boots and beards at Sutter’s Mill.

So I talked not only to the Lilienfelds but to Larry Grant, the legendary florist himself. Many in the media were still enchanted with the Electronic Frontier metaphor, and I remembered the old films about Davy Crockett, the Tennessee frontiersman who loved corny jokes, bear-wrestling tales, coonskin hats, and Crockett-friendly news accounts—the grist for Walt Disney later on. What was next, a movie epic with a musical tribute to “Larry Grant, king of the Net frontier”?

A market might indeed be ballooning for cyber-retailers, as the hypesters said. But I still wondered about the present. What counted was not all the puffery about 30 million Netfolks, many of whom can only read electronic mail as opposed to seeing roses or toy tops or other merchandise. No, the real determinant was how often people dial up your particular site and bought. One well-crafted Web area, which advertised technically related goods, enjoyed just a handful of visits in six months without a single sale. This was an issue aside from the total amount of business done on the Net. Having talked with Mary Cronin and others, I hadn’t any doubt about those giant commodity transactions and all the use of the Net by Big Business to automate the paperwork of commerce. But what about the small fry? Was the excitement about Grant truly justified? I’ll answer those questions in the pages ahead, where I’ll return to the Lilienfelds and to Grant, and where I’ll examine the following:

• MCI, the phone company. It has provided thousands of miles of Net connections and now rents out electronic storefronts on the Net. MCI offers one of the slickest Web areas—complete with a fictitious publishing house (now evolving into a real one) that accepts manuscripts from real readers. Advertising Age has hailed the MCI site as “unquestionably the best Internet marketing effort to date.” Frustratingly, however, while preparing to dispense advice on cyberspace, MCI in early 1995 was committing some of the very mistakes it should be telling its customers to avoid.

• Federal Express, whose Internet presence shows the potential of the Net for business-to-business transactions, not just the consumer variety. Ironically the people at FedEx in some ways were demonstrating more Net savvy than MCI was at the time, even though the Internet was more in the territory of the latter. The old values of customer service still reigned above all else. A smaller competitor of Federal Express, a shipper called Right-O-Way, was also making outstanding use of the Net. In some ways it was even staying ahead of the big boys.

• Intel, the chipmaker, which learned the hard way how good the Internet was for spreading news of flaws in products. The Net abounds with skeptical academics and consumerists with fast typing fingers.

• Other hazards of the Internet for business people. What if you set up an electronic storefront like the Lilienfelds’ and then a manufacturer decided to cut out the middle people and sell on the Net directly or through a larger outlet? Security is another threat. While I was writing NetWorld!, most commercial areas on the Net lacked a way to protect credit card numbers. Hackers broke into General Electric’s Web area and stole corporate secrets. Another risk is competitors looking over price lists and assessing the strengths and weaknesses of products.

Those caveats will end the chapter. By far, the Internet is a positive rather than a negative factor for business and customers alike. Wired consumers will reward good companies, punish the losers, and spur the winners to do still better.

Thousands of miles to the south of Ann Arbor, home of White Rabbit Toys, Luciana Gores was reading a popular mailing list called Net Happenings. It was a kind of town crier. Each day from North Dakota a man named Gleason Sackman sent out informative posts on the many new services that were springing up on the Internet.

Gores worked as a network expert, and she was already used to buying technical books through the Internet, which offered a far greater variety than what she would find in her own city, Rio de Janeiro, Brazil.

She was also the mother of a seven-year-old named Lucas. So when the mailing list told her of White Rabbit, she checked it out on the Web.

People who visited the virtual store, or at least those with the right equipment, saw a logo with the rabbit from Lewis Caroll’s imagination. They also conjured up a color picture of a real toy store with shelf after shelf of tot pleasers, a tiny table and stool on the floor, and a look of friendly chaos—in short, a shopper’s delight for children and parents alike, which in fact the “real” White Rabbit was. The traditional store, the one at 2611 Plymouth Road, had thrived. Now Bob and JoAnn Lilienfeld were trying to woo virtual customers such as Luciana Gores. Their electronic White Rabbit just may have been the first full-service toy store—as opposed to one-product billboards or specialty shops—to open up on the Internet.

An ad on the opening screen helped set the tone for Luciana Gores and other customers of White Rabbit: “We specialize in high-quality toys that help children to create, learn, imagine, and explore. Our toys come from all over the world. We offer such international favorites as Brio (Sweden), Ravensburger (Germany), Primetime Playthings and Creativity for Kids (United States).”

Suitably equipped customers could actually see pictures of the toys, including a Ravensburger game called the A-maze-ing Labyrinth. “Travel the corridors of the enchanted labyrinth in search of treasures,” read the carnival-like pitch. “But watch out! The walls shift, and the passages can close, leaving you trapped! For ages eight and older.” Lucas was a year younger, but did it matter if the child was as bright as his mother, the network expert? “It seems to be an interesting game,” Luciana Gores e-mailed me, “and it won a Parent’s Choice award.” And so she paid her $24.95 and shipping, which, given the light weight of the toy, was modest.

Thanks to the Internet, the Lilienfelds suddenly had the whole world as a market, not just customers living near by. The fact that White Rabbit was in a university town, with graduates all over the planet, could only help. So could the fact that the Internet was expanding overseas even more rapidly than in the United States.

White Rabbit also appealed to Stuart Lowry, another promising kind of customer—the computer jock turned family man. A Maryland resident in his late twenties, he wouldn’t have made the pulses of marketers quicken several years ago; he was a grad student then at Johns Hopkins University and, like many people on the Internet, had more time than money. But that had changed. Lowry now worked at Computer Science Corporation, a large defense contractor, pulling down a salary in the mid-forties. He was married and lived in a townhouse, and four months ago his wife had given birth to a baby boy. And so, when Lowry was cruising the Internet from work and spotted a notice announcing White Rabbit Toys, he favored it with a virtual visit. He ordered a colorful toy top for $13, the Floor Spinner from Primetime Playthings.

Many people on the Web were young males more interested in pizza or condoms than in baby toys, but the Lilienfelds were looking ahead a few years when the same Net people would be parents. “It’s an act of faith,” Bob Lilienfeld said. “Today’s demographics and selling a lot of toys on the Net may be out of synch. But today’s college students are tomorrow’s parents. Tomorrow’s parents aren’t going to consider ordering by computer any different from getting in a car and going to the shopping center.”

Other trends might work in the Lilienfelds’ favor. More and more Americans were time-short, with long commutes; Stuart Lowry himself spent forty-five minutes each way, and that actually was a quick trip compared to those in cities such as Los Angeles. In northern Virginia I knew of parents rising at 4 A.M. to go to jobs in Washington some forty miles away, and not a few of them were high-tech workers who would sooner or later end up on the Internet.

When I reached Bob and Jo Ann Lilienfeld in the middle of November, White Rabbit itself had been on the Net maybe a week and had enjoyed around 1,000 virtual visits in that time. They were hoping that these numbers would multiply as Christmas neared. It was too soon to tell how many of these people would actually order. Back in June, though, the Lilienfelds had grown excited after reading about Larry Grant in the New York Times and elsewhere.

“I saw this figure of 20 million Net users,” Jo Ann said of the numbers du jour, “and thought there’s definitely an opportunity here. But I didn’t want to go about it in a half-baked manner. I thought there had to be someone who could combine knowledge of the Net with marketing experience.” She checked out a local cybermall and found it wanting in the latter area.

That wasn’t surprising, given Jo Ann’s perfectionism and eagerness to avoid easy but far-from-satisfactory solutions—whether in retail or life in general. She had grown up in a cash-short household where, more often than not, the children would get out the oatmeal cartons and construction paper and scissors and cobble together their own toys. And the same creativity had carried over to her Bloomies days as one of the resident experts on Christmas tree trimmings. According to the Lilienfelds, it was JoAnn who came up with the idea of selling leafless, white branches. She and Bob had moved to Ann Arbor because he kept flying off to the Midwest to consult for clients in Midland, and they felt that married people needed to spend more time together. JoAnn went about establishing the White Rabbit just as conscientiously.

Not finding the right toys for her own children, she studied the demographics of Ann Arbor to verify that a toy store could thrive there. She concluded that in a university community, many would love those wooden train sets and other classic toys as opposed to the trendier offerings that were touted on television and sold at Toys ᴙ Us. Ann Arbor responded well. A local paper told how she blessed her store with a public bathroom—how she kept diapers and spare wipes around for the parents of children and emergencies. No need for toilets existed on the Internet. But even at this early stage, having read up on the Netfolks, she was attuned to the need to adapt to the culture of cyberspace.

JoAnn finally decided that her best savior, the requisite miracle-worker with both Net and marketing experience, lived right there in the Lilienfeld household. Those past few months her husband had been succeeding off a mix of garbage and the Internet.

To be exact, Bob Lilienfeld was advising clients about future garbage, the packing materials for consumer products, a major contributor to landfills. He hadn’t anything against recycling. But thanks to his work at Procter & Gamble, he had concluded that the best way to cope with waste was to design packages to avoid it in the first place. Manufacturers and customers alike would win. Bob would go on to help put together a network of likeminded consultants, including William Rathje, a world-famous garbage expert at the University of Arizona who had co-authored Rubbish! The Archaeology of Garbage. Lilienfeld met Rathje at a press conference but also found himself relying on another source of contacts, the Internet. Again and again he had heard about the Net from professors at the University of Michigan, and he soon was in touch with other garbage mavens around the planet.

“I started sucking in information,” he recalled. “I found out about mailing lists and newsgroups, and then I decided I would put my newsletter up on the Net and see what happened.” The newsletter was a way to let clients know about his consulting company, the Cygnus Group. It helped Fortune 500 companies, other businesses, trade associations, educational groups, and others grow more sensitive to environmental concerns in activities ranging from packaging to marketing.

Just as JoAnn was careful to befriend Ann Arbor in the right way, Bob tried to honor the conventions of the Net—avoiding hucksterism in favor of helpful information. The announcements about the newsletter were low-key, and response was good. Soon he was sharing his articles with hundreds of Netfolks who asked such questions as: “I recently saw an article on compact fluorescent light bulbs in Consumer Reports. Why aren’t more stores and utilities selling them?”

An “Ask Bill and Bob” column, cowritten with William Rathje, revealed that such lights “take at least eight times more energy to produce than old-fashioned bulbs. And they’re heavier, so they use more energy during shipping.” The column also told of an experiment that McDonald’s was conducting in Albany, New York, with food and paper composting, saving perhaps 500-700 pounds per week of solid waste. Readers could learn, too, that a nut seller was moving from glass and plastic bottles to vacuum bags.

Bob Lilienfeld was hardly an eco-activist by the standards of, say, Greenpeace; Dow Chemical was among his prime clients, after all. But he was serving up information for people with many different viewpoints, and by way of the proper clicks with your mouse, you could travel from his Web site to areas of the Internet such as the Envirolink Network, or EcoGopher, or EcoNet.

His newsletter, known as The ULS Report (short for “use less stuff”), carried an item about CD-ROM disks. It described them as “an environmentally friendly way to reduce waste and save resources. One CD-ROM, including packaging, weighs under half a pound. The 22 books that it replaces weigh 70 pounds.” Knowingly or not, he was helping to pave the way for the virtual White Rabbit—where the same principles applied. Via the Internet, White Rabbit could advertise to thousands without printing up catalogues for them. Oh, they might request catalogues later, but then they would have prequalified themselves, reducing the solid waste. Lewis Carroll would have approved of the reasoning here. What’s more, unlike paper catalogues, Lilienfeld could update his electronic catalogue to change prices or play up the fastest-selling merchandise.

The World Wide Web was the main way to put White Rabbit on the Internet. Once merchants on the Net would have favored a service called Gopher (as in “go-fer-it”) in honor of the mascot at the University of Minnesota. Gopher displayed text very well and needed less bandwidth on the Net than the Web did. But it lacked the pizzazz of the Web-Mosaic combination; that is, the ability to conjure up pictures and even sound so easily. Although Bob used Gopher for digging up scholarly works about the environment, it was like black-and-white television while Web-Mosaic was color and all the more alluring for commercial purposes.

Getting White Rabbit on the Web was surprisingly cheap in some ways. The Lilienfelds’ network provider charged JoAnn just $50 a month, plus $2 an hour for when she was using electronic mail or handling other chores. That didn’t include Bob’s time, however. He knew at least the basics of the necessary programming language and didn’t require the services of a consultant to the extent that others might have.

Lilienfeld himself put in most of the set-up hours. It took him a few days of programming to design the Web site and scan in the pictures of more than two dozen items—the train sets, the puzzles, the tops, the blocks—and like an old-fashioned art director he had to create within the limits of the medium. The big problem was photos. If they were too big to move over the Net quickly, then the peeved readers might give up and go on to another Web site. If too small, however, the pictures would lack enough detail to show off the store or the merchandise. In many cases Bob would let readers click on pictures of bears to see larger versions of the photos.

He also had to worry about the software the readers used on the Internet—certain Mosaic-style browsers would show smaller objects first. Other challenges arose. What if technical standards changed so that only certain browsers would work with Bob’s site? The real White Rabbit might be a victim of acts of God such as the ebb and flow of automobile traffic, and the virtual Rabbit needed to worry about patterns of Net traffic, but it also could be subject to Jehovah in the form of macho software firms who wanted everyone on the Net to use their brainchildren.

Companies such as Netscape Communications Corporation actually gave away Mosaic-style products to us Netfolk for free, hoping to make fortunes instead off the software that merchants and others denizens on the Web would run. Netscape was the champ in late 1994, the one that let you go from page to page faster than any competitor did. Many people feared Netscape would be to the Web what Microsoft was to software; suppose Netscape used technical prowess and marketing skill to trample competitors, and maybe overcharge the customers.

A green monster named Mozilla came up on one of Netscape’s welcoming screens, and pessimists wondered if the company itself might someday play the part. Marc Andreessen, the top software designer at Netscape, had led the team that came up with the original Mosaic at the University of Illinois. And then he had left Illinois to join a new company that, from the ground up, had designed the speedier Netscape product. The Web community mightily hoped that Mozilla and keepers would behave themselves. Suppose that Netscape joined Microsoft or credit card companies to build in special, billing-related features that users of other browsers couldn’t use?

Netscape, however, seemed benign so far, and the browser’s technical wizardrywizardry was winning many friends. With a click of the mouse, for example, you could scoot smoothly from the Web to the usual newsgroups, and Bob Lilienfeld took advantage of this. He set up his computer system so that customers with the proper software could whiz directly from White Rabbit to child-related newsgroups.

One moment you could be shopping for toys; the next, exchanging tips with a New Zealander or Norwegian on how to cope with tantrum-prone babies. You could zip to misc.kids (“A great place to swap parenting war stories”), misc.kids.consumers (“Help with purchasing decisions”), or misc.kids.computer (“Enough said!”). Or you or your children could read odds and ends about wombats, Forester kangaroos, Tasmanian devils, fish, lions, dinosaurs, and other creatures at WombatNet; print out drawings of the human heart or the stars or hear a thunderbolt by way of the Franklin Institute Virtual Science Museum; and learn the population of Uganda or Afghanistan via The CIA World Factbook, a guide assembled by the real-life Central Intelligence Agency.

Fighting the companies such as AT&T and the big cable interests, many activists likened the Internet to a series of communities with opportunities for small merchants and citizen-to-citizen communications as opposed to couch potato offerings from the Fortune 500. Merchants such as the Lilienfelds were acting out the very models about which the activists waxed so enthusiastically.

Bob Lilienfeld understood that just as storekeepers in a small town would do well to join the Kiwanis Club, virtual storefronts should be part of Net life. JoAnn would soon go to a toy convention, and at some point, she might well share her impressions with the denizens of misc.kids and similar newsgroups, as opposed simply to touting her products. At the same time, yes, by way of a signature at the bottom of her posts, people on the Net could find out about the toy store. She might even start a mailing list for the receptive. Bob had already shown the success of this model by way of the list and other tools used to promote his consulting activities.

A toy-oriented list could be much more than ads. “Going shopping isn’t just spending money,” Lilienfeld observed, “it’sit’s a social phenomenon. It’s seeing people you know, it’s being part of a crowd.” And it’s also picking up gossip and maybe even solid information. “Ultimately the toy store will be bigger than just a toy store,” he said. “We might be providing information on child development, of the appropriateness of certain toys or coloring books. If you’re a model train hobbyist, we might be able to help you hook up with model train users groups.”

In fact, by way of the mouse-activated links from White Rabbit to newsgroups and other Web sites, he was already offering much more than just a store. The line between merchants and information providers was blurring in the case of Bob and JoAnn; the higher the quality of the information at White Rabbit, the more it would be a virtual gathering place for people on the World Wide Web. I wasn’t surprised to hear some people say that librarians might be the star sales reps of the future. It wasn’t hype. Information, not just prices and selection of merchandise, would be what drew Netfolks to sites such as the Lilienfeldss’ . Of course Bob Lilienfeld might want to be choosy about what links he listed. If he listed too many of the mediocre ones, then he would simply be replicating the function of the powerful search programs on the Web and adding to people’s “information overload,” to use an ever-popular phrase.

Software already let sophisticated Netfolks zero in on items of interest. Merely by typing in the word “toys,” for example, I could find scads of listings—from mentions of adult sex toys to the Web site advertising the gun that fired Ping-Pong balls. And these programs would soon be simple enough for even technoklutzes to use. So the Lilienfelds had better offer something that the software could not supply: Their judgments about which Web sites, newsgroups, and mailing lists were the most fun or most informative.

All through the Christmas season, JoAnn kept refining her Net-related plans. “We need to ask, ‘Have we chosen the right items?’” she said. “The draw of our toy store is, it’s an exciting place to shop. We have to do the same on the Internet. If we add more items, it will approach a catalogue more. Right now our competition is mail-order catalogues, and we have a lot of items that they’re not offering. Maybe we’ll be reaching people not on the traditional catalogue list. They could be more occasional toy buyers than frequent toy buyers.”

Thanks to a computerized inventory system, JoAnn’s corporeal store carried more than 6,500 items. Bob made a mental note: He might want to put more of them on the Net so customers would enjoy a wider selection. JoAnn talked about her suppliers: “My goal was really getting this up and going for Christmas. When I get to the toy fair I’ll discuss this with the national sales managers and see if I can’t get discounts for advertising to so many people, and then we’re working probably toward next Christmas. We’ll be working toward fourth quarter of ’95.”

That was a healthy attitude. Even toward the end of the season the number of visits didn’t go past 2,000 a week, and only a handful of actual sales resulted. The only customers were Luciana Gores; Stuart Lowry, the computer jock turned family man; Michael Wolfe, a West Virginia professor studying Internet commerce, who ordered half a dozen stuffed toy caterpillars; a second academic, in the Midwest, who bought a Ravensburger Snail’s Pace Race game; a Massachusetts woman sending three customizable dolls to her sister (“I’m testing business on the Net—aren’t you lucky?”); and David Fry, the operator of a cybermall nearby who was curious about the White Rabbit, and who bought First Blocks.

Not that the Lilienfelds had completely wasted their time. As of Christmas, a Wall Street Journal story hadn’t appeared, but the Detroit paper and others had gone ahead with articles, and customers poured onto the floor of the real White Rabbit, one even buying the giant polar bear that Bob had been hoping to give his nine-year-old son. The publicity may have brought in some $20,000-$25,000 in extra sales by Bob’s estimates, on which the Lilienfelds may have netted around $2,000—compared to $750 gross and $75 net from Net orders. Bob told me that other merchants on the Web were also reporting a low number of sales. The week before Christmas the number of visits to White Rabbit itself actually declined; many of the prospective customers had been logging on from school or work, and now they had partly emptied the Web along with their dorm rooms and offices.

From a get-rich-quick perspective, then, the virtual White Rabbit had been a zero. Bob and JoAnn were smart marketers with MBAs from a Big Ten business school, and he had a real feel for the Internet, which he had successfully used to expand his consulting business. But even the Lilienfelds could not score right away. Oh, how tantalizing the gargantuan numbers had been—the tens of millions of users said to exist; the million by which the Net was supposed to be growing each month. And yet in the end, when the time came for customers to key in the credit card numbers, the market had vanished like the Cheshire cat. That didn’t mean the Lilienfelds were foolish; just a week or two after Christmas, a wonderful twist happened. The number of visits to the toy store fell off. But sales leapt up. By mid-January White Rabbit was moving an average of a toy a day—not a Kmart volume, but an improvement. Bob explained the difference. Now White Rabbit’s first screen told customers that the store could often get toys not mentioned online.

Encouraged, Lilienfeld added yet another improvement, an 800 number. Now customers could ask their questions the old-fashioned way if they preferred, and they could also order by voice if they didn’t trust the Net with their credit card numbers.

With enough tweaks like this, the virtual toy store might eventually flourish as the number of Web users grew. Just like the characters in many children’s stories, the White Rabbit would keep on changing—adding ever-more-intriguing links to newsgroups and other Web sites, putting in the software to help novice toy shoppers choose just the right ball or train set, figuring out new ways to use the interplay between the Net and the traditional media. Sooner or later, the Netheads would reproduce, and when they went looking for rattles and Lego sets, Bob and JoAnn would be ready for them. The story of White Rabbit Toys, like that of the Internet itself, was far from over.

Larry Grant just might be doing better at the moment than the Lilienfelds were. He was selling flowers, and what better merchandise existed for grad students who were alone at the keyboard in a dark office at two o’clock, and who had forgotten their girlfriends’ birthdays?

A newsletter publisher named Rosalind Resnick—a former staff reporter for the Miami Herald and the author of an Internet business guide—was grossing more than $20,000 a year in subscriptions and expecting to do much better in 1995.^[2.4] And her media-oriented newsletter helped pave the way for a lucrative consulting business. I also knew of a network expert named Gordon Cook who was able to jet to a three-week research expedition in Moscow at his own expense, and who lived satisfactorily on the revenue from The Cook Report on Internet and related activities.^[2.5]

Grant’s Flowers, however, was more of a typical business. Larry Grant wasn’t a writer. And his work was not as network-related as that of Resnick and Cook; unlike the latter, he hadn’t evolved into a net.personality on some key mailing lists. Instead the word was that Larry Grant just paid his $28 a month to an electronic mall—a collection of stores that shared a common subarea of the Net—and sat back and watched his fax machine spew out orders. Grant might not be Davy Crockett in terms of action, but certainly in terms of fame he was coming along. He had appeared as a success story, after all, on the front page of the New York Times business section.

As I wended my way through the Net to Grant’s Flowers, I passed through an area called Branch Mall. A logo with a tree branch greeted me. I saw listings for enterprises ranging from cosmetic sellers to H & H Logging and Timber Company. Under “Flowers, Gifts, Foods,” I didn’t see just Grant’s listing. I saw White Dove Flower and Gift Shop, Flowers on Lexington, Exotic Flowers of Hawaii, Bonsai Boy of New York, and half a dozen others. Bob Lilienfeld was skeptical about cybermalls, and right now I could see why. With all this competition, could Grant’s make money off the Internet?

Lilienfeld had reminded me that traditional malls and the cyber variety were different, and I understood. If I wanted to shop for books, I could brave traffic to reach Springfield Mall, a large collection of shops maybe ten miles from me in the suburbs of Washington, D.C. Springfield would be worth the drive. I could visit four stores right within a five-minute walk of each other—Brentano’s, B. Dalton, Walden, and Crown.

The Net, however, was also different. I didn’t have to drive anywhere. I could just use a powerful search engine such as Lycos, key in “bookstore,” and watch name after name pop up on my screen. Lycos demanded just a little technical savvy. But easier alternatives would come along. As if that weren’t enough, Netfolks put together lists of activities on the Internet, and often they included commercial categories. I’d found White Rabbit not through advertising but through the Yahoo list out of Stanford University, on the other side of North America. Distance just didn’t matter. So could the shopping mall metaphor truly work out to the benefit of merchants such as Larry Grant?

Branch Mall at the very least had set Grant up in style. The opening screen was attractive and helpful to buyers, with such basics as: “Different areas of the country sometimes have different prices or may be unable to supply certain flowers. For example, New York City has high rents and costs of doing business, so flowers are more expensive there....” And then below I saw a list of the offerings—for example, “One dozen boxed long stem roses. A fragrant classic. $49.95 to $99.95.” In the virtual version of the White Rabbit toy store you couldn’t rattle the toys, and in Branch Mall you couldn’t smell the roses, but like the Lilienfelds, Branch Mall had been generous with pictures of the merchandise. I loved some little touches. Branch had given Grant a reminder service into which you could key your spouse’s birthday or some other date, before which an e-mail note would be sent to jog you to do your duty.

The selection was varied. You could order everything from the roses to “a get well soup cup containing button mums, daisies, mini carnations, standard carnations, monte casino, statice, and a package of chicken soup. $26.” All in all, I felt that this area was even better laid out than White Rabbit Toys, where the opening page, though far, far above average, didn’t communicate quite as much information as I’d have liked. As with White Rabbit, you could order online by filling out an electronic form.

Missing from the virtual version of Grant’s flower shop, however, were the customized links that helped give the White Rabbit Toys its personality and made it a true part of the Net. If Larry Grant had been as at home in cyberspace as Rob Lilienfeld was, he could have added links to love-oriented discussion areas or to poetry—perhaps even the Shakespearean variety.

But instead this Web page was serving just as an electronic billboard with an ordering mechanism. I didn’t even see a photograph of the store. When the New York Times published a photo of a Mosaic screen, it had superimposed a picture of Grant amid his flowers and dressed in an apron with an FTD insignia. Couldn’t a similar photo have adorned his Web area?

For that matter, the store didn’t even offer an electronic mail address, just a phone number for customers with questions. This isn’t to criticize Larry Grant. He was not an honorary techie as Bob Lilienfeld was. Like Lilienfeld, however, Grant was an intelligent, diligent Midwest businessman who saw the Net as an opportunity.

Wild talk about Grant notwithstanding, he wasn’t a braggart—simply a proud family entrepreneur. I learned that Grant’s Flowers was actually part of a mini local conglomerate. “We’ve been here since 1947,” he said, “and my folks started farming and selling produce by the side of the road off a kitchen table. We’re now a million-dollar business and have many facets. We have a flower and gift shop, and the front of the building is beer and foods. We farm 131 acres.” Two brothers were in the business, and so was his eighty-year-old mother. “She runs the flower and gift section, and I run the rest of the retail sales and my brothers do all the growing and production. We’ve got two acres of greenhouses growing plants for spring sale or gardeners. It’s a very diversified operation.”

Grant clearly wasn’t making a living off the Internet alone, despite a good start. “We got online in February just before Valentine’s Day and we received forty orders that week. In the first ten days we had over 2,900 look in on our electronic storefront. Then it dropped to one or two orders a day, and then we got to Mother’s Day and had a high of forty in one day. Currently we’ve increased from one or two to six, in that range.”

When I asked what his current Net-related gross would be per year, he roughly estimated it at perhaps $15,000 or $20,000. That was enough to make the Web area well worth his time, but this was hardly a tale of instant riches. I remembered a magazine ad—for would-be providers of Internet services—that showed a mustached man beside a Rolls or Mercedes. Larry Grant was a Web merchant, not someone hooking people up with the Net. But I wished that the get-rich-quickers of all stripes could see Larry Grant as a realistic example of the Net’s promise. The gold might come eventually, and it was worthwhile to chase after it by going online, but, for most people, the big money wasn’t there yet.

What’s more, costs for newer customers of Branch Mall were higher. Grant had been the first merchant there and enjoyed a break. Now Branch was charging thousands a year for Web areas that included elaborate programming and creative work.^[2.6]

Larry Grant, in any event, believed in the Net and in the Mall itself. His virtual operation wasn’t costing him that much, and I suspected that even with somewhat higher expenses, other tenants might do fine in the end if they were in the right business. “Number one,” Grant said, “we don’t have to take and buy more inventory. Number two, we don’t have to have a bigger facility. And number three, we don’t need a sales staff. We can do with the staff we have in handling these orders. It’s a neat way to find new business. I don’t have to handle any of the products directly. The customer does all the ordering through the company in his area and it’s shipped from the company to them, and I get my commission check at the end of the month.” He liked the concept so much that he started a Fuller Brush franchise on the Net. The same key principles applied: No inventory to worry about and no sales staff, just some dealings with Branch and orders emerging from a fax machine.

Merchants like Bob Lilienfeld might fare well without a cybermall involved—they knew how to spread word about themselves on the Net by way of newsgroups and mailing lists—but I could also see the possibilities for people such as Larry Grant as long as they kept their expectations to a reasonable level. Grant himself didn’t view the other flower shops at Branch Mall as direct competitors; he depicted himself as more of a general florist than the others, what with their specialties in Hawaiian flowers and the like. Certainly a good cybermall, like the brick-and-concrete version, needed a good tenant mix—with a toy store not appearing on the same screen as, say, a sex toy shop.

If that right mix wasn’t around, why have the mall in the first place? While it was true that the Net shrank distances, it did take time to move from screen to screen at typical modem speeds. And yet, reflecting, I could indeed see a future for malls. Even when search engines were easier to use, people might still not avail themselves of them—preferring to browse instead. So the mall concept might well endure to the advantage of people like Larry Grant.

All kinds of people itched for their percentages of the cybermall business. Jon Zeeff, the mall operator who had set up Larry Grant with his electronic billboard, had once written medical software. David Fry was a Harvard Ph.D. in computer science, came from a family in the printing business, and ran an offshoot called Fry Multimedia. Ann Arbor wasn’t Silicon Valley, but just in that one university town, at least three local business people were on the Web in a serious way, if you included Bob Lilienfeld. Like him, Fry wisely thought in the long term. Drumming up business from well-known brands such as Ragu spaghetti sauce, he did not promise an instant audience in the millions. He urged companies to go on the Web, experiment with interactive advertising, and make their mistakes before the Net became a truly mass medium for Madison Avenue.

Some get-rich-quickers, of course, also were jostling for virtual tenants; even Canter and Siegel showed up by way of an area called Cybersell, and I enjoyed the irony. C & S had carpet bombed thousands of newsgroups with the same message—while encouraging other merchants to ignore conventional Netiquette—and yet now they were also relying on the more focused approach of a Web area.

Phone companies, too, wanted to run malls on the World Wide Web. And that created problems for some. While the Net might use their phone lines, many of these corporations felt out of place in an anarchistic environment over which they had far less than the accustomed amount of control. In the mall business they would be competing against nimble entrepreneurs like Zeeff and Fry. Still, phone companies could take advantage of their existing networks to one extent or another, and if the Yellow Pages were going online in a new incarnation, then the Baby Bells and AT&T wanted their share of the business. Of all the mall-related efforts in early 1995, the most ambitious may have been from a phone company, MCI. It exemplified—as I soon discovered in the most direct of ways—both the best and the worst of Big Business on the Web.