MCI and the Internet had A History. The Net used phone lines from many companies, but MCI had long been one of the major players here; some 40 percent of the Internet traffic in the United States passed over its cables, and nowadays the senior vice-president of data architecture was none other than Vint Cerf. As much as anyone he was Mr. Net, one of the founding fathers. MCI also employed the head of a standard-setting body called the Internet Engineering Task Force. Unsurprisingly, MCI marketers were coming out with statements in the vein of: When you think Internet, we want you to think of us.

I asked a product manager how much of the Net-related commerce he could envision involving an electronic marketplace from MCI. Well, he said, MCI had around one-fifth of the long-distance business in the U.S.—and why not the same share on the Internet?

Clearly, however, if MCI wanted to woo the Larry Grants of this world, it faced a major marketing problem. Just like Jon Zeeff, it would have to sell business people on the Net as a vehicle for their messages; and that meant lots of education, not just hype. MCI, moreover, was offering a range of services far, far broader than Zeeff’s. In an MCI-perfect world, you would advertise your business by way of marketplaceMCI. Prospective customers on the Net could browse through a giant online directory and follow a link to your electronic storefront. MCI would cleverly lure them to its area. People would be able to retrieve voice phone numbers in far-off cities and enjoy other information services for free.

On MCI’s planet, you’d of course use internetMCI for your electronic mail and your Web browsing. You also could hold video conferences during which people saw not only each other but the same contract or spreadsheet, which they could jointly modify even if they were thousands of miles apart. You could even receive updates on your pet news topic by way of MCI—just the ticket for keeping up with competitors or with a favorite athletic team.

Not all of MCI’s new services related to the Internet. But like marketplaceMCI, many did. And even with 30 million people hooked in by way of e-mail if nothing else, public ignorance was massive. Larry Magid, a computer columnist, observed that even a single TV show such as Home Improvement could attract greater numbers. If MCI wanted to enjoy volume befitting a phone company, then, it had better prepare for some major evangelizing—about both the Net and non-Net services. MCI tried the broadcast model in the most traditional of ways. Splashy commercials aired on national television. They starred a fictitious publishing company, Gramercy Press, whose president, Peter Hoffman, had a big crush on MCI. Whether the service was video conferencing or electronic mail, Hoffman was itching to open his wallet for it.

Darlene Davis was the character with the most air time, the hip young receptionist who was waging a valiant battle to get Martin Banks, the resident technophobe, online. If this portly old crank of an editor wanted to read the latest memos from Darlene, then he had better plug in his computer. Curtiss Bruno was the sales manager with his heart on his quotas and Darlene. MCI’s electronic services could allow him to achieve at least the former goal. Nowadays Darlene happily used e-mail to help stay out of flirting distance with him. Ellen deRosset was the resident intellectual snob and a Net browser. Reginald Gales used MCI’s news feature to keep Martin up on cricket scores. Marta Dragelov was an info junky in keeping with her duties as a fact checker.

In a country where fantasy and reality often turned into one big mush, where O. J. Simpson movies could go into production before the end of the murder trial, where legions of commercials aped news programs, where the Speaker of the House would soon be hosting a cable TV showing of Boys Town after having touted orphanages as a major solution to the welfare problem—in a nation like this, it was as inevitable as a $1 million book deal for O.J. that the mythical Darlene would draw job offers and marriage proposals from people wanting to be part of the fun.

“These were breakout and breakaway characters that took on a life of their own,” said Mark Pettit, the MCI public relations man who was handling Gramercy matters. What’s more, the company’s advertising agency, MVBMS, hadn’t just tried to make Gramercy real in the real world; the agency people had also made the characters real in the video world by way of an introductory commercial that looked like a preview of a new fall series.

Having conquered TV, then, and with the Internet a main focus of the ad campaign, how could MCI not have opened up a Web area to ballyhoo the same services that Darlene was pushing on the tube? The commercials had whetted interest in the characters. And now MCI would see if it could satisfy this curiosity while also passing on more details about its new line of services. “People wanted more than thirty seconds of information,” Pettit said, “and it can be hard to give them more on TV. What if we turned this into a real place that they could go visit? And that’s how it came to life.” By MCI’s own estimate, more than a million people visited the “real place” in the first six weeks or so. Even Bob Lilienfeld dropped by. He was an MCI stockholder and wanted to keep an open mind despite his skepticism about the mall concept—maybe he could do business with pros like MCI’s. Lilienfeld filled out a form that offered a two-month trial of Net-related services, and waited.

I first visited the Gramercy Press around the same time that Lilienfeld did. The site popped up on my screen with color photos of a perky-looking Darlene and friends. I saw a red logo, too. A small “GP” appeared between “Gramercy” and “Press,” a nice little touch that a real publisher might have tried. I wondered what ambitions MCI had. Might it turn the fictitious GP into a commercial publisher someday? The screen said Gramercy was “The World’s First Virtual Publishing House,” and across the top I saw color photos of Darlene and friends, all looking as real as ever. If I’d been impatient for a hard sell, I could have clicked immediately on items such as “networkBusiness” or “MCI Telecommunications, Inc.”

But like the rest of the cosmos, I was more keen on reading some virtual gossip from virtual humans. In a primitive way, reminiscent of many a best-seller, a teaser led me on. I learned that the people of Gramercy were “working on secret projects, curt memos, random thoughts, Machiavellian power plays,” and that I might “even browse a clandestine love letter or two about to be sent via e-mail across the corridor.”

So I clicked, with much anticipation, on “Gramercy Press.” Against a dark, purplish-blue sky I saw a semiornate, low-rise office building, the same one featured in the TV commercial. Not to leave anything to chance, a caption told me about tweeds and patches and old pipes and the fact that “every one—from the receptionist to the president himself—is online via networkMCI Business.” Despite the clichés such as the stereotypical reference to tweeds, this site was clearly showing far more imagination than the usual WWW area did.

“Now,” the screen told me, “click on any window and you’ll start to get a feel of the inside workings of a major New York publishing concern.”

I chose a pane on the top floor and saw Darlene near her keyboard, smiling away and looking as if I’d caught her in the middle of an intense gossip session. The screen suggested that I click for audio. I did and downloaded a short snippet. “I love technology,” she said in a high-pitched, girlish voice, and giggled a little nervously as if to tell the world, “Hey, I’m a real person, not an actress taping an ad.”

The text on the screen was credibly self-promotional: “I’m a combination of a staff psychiatrist, gopher, organizer, coffee maker, ruffled-feather soother, astrologer, party organizer, invitation sender, flower orderer, delivered-lunch acceptor, and philosopher. Oh yes, I also disseminate messages. A job made infinitely easier thanks to e-mailMCI. I threw out those little pink message pads. e-mailMCI is so much more efficient. I just click on my computer and the message gets to the right person instantly. Whether they call back is up to them. Hey, I can’t be their conscience, mother, and etiquette professor too. I wear enough hats. And I have many aptitudes. For instance, I was college skiing champ. You didn’t know that about me. Nor did you know I have a master’s degree in medieval literature. Or that Ellen deRosset is going to need an editorial assistant. Of course, she doesn’t know it yet either.”

I moved on to Darlene’s e-mail by clicking on, yes, her monitor. And suddenly I was getting another pitch from MCI in the cleverest of ways—I saw a screen shot of a menu from e-mailMCI, complete with such commands as “Compose,” “Forward,” and “Reply.”

Beneath the menu appeared a message list:

I opened the e-mail. Ellen deRosset was complaining that “My office has more manuscripts than the Library of Alexandria—I’m running out of room for me. Could people submit their stories over the Internet instead of through the mail?” Reginald Gales wrote that he’d sent out a fax to computer artists, asking for submissions; and in fact MCI was offering to post the works of electronic artists, not just writers. Under the subject line “Excellent Proposition,” Curtiss Bruno asked: “Hey Darlene, want to come by and check out the romance section of our newest catalog?” Funny. The TV commercials had led me to believe he might be tiring of the chase. Marta Dragelov passed on some funny trivia from a book she was researching. Peter Hoffman announced that he would be out of the office the next week but would be keeping in touch with electronic mail.

So, yes, I could read the same e-mail as Darlene could. But that still wasn’t full interactivity. I wanted a two-way, and the “Compose” command intrigued me; perhaps I could e-mail the crew behind the Darlene character. I wrote that I was a real writer, working on a real book, for a real publisher; could they please tell me what kind of responses the people at Gramercy Press were getting over the Internet? And how about Darlene?

“What’s she like?” I was thinking. “How’d those people choose her? Does she enjoy computers? Has she been on the Net?” Once I established contact with the virtual Darlene’s keepers, perhaps I could find out.

Having already snooped at Darlene’s e-mail, I went on to the offices of the other characters. Ellen deRosset, a dark-haired woman dressed in black, confided that she had corrected her seventh-grade teacher’s grammar. “I read War and Peace when I was fifteen. The complete works of Balzac before I was twenty-five. I think you get the picture. So I am not happy that I was given the assignment to edit this ‘women in sports’ book. I dislike sports rather intensely. The only sport I know anything about, really, is fencing. But one must be flexible these days, and the MCI Business software makes this assignment easier to handle, if not more palatable.”

Reginald Gales told me how MCI’s e-mail and conferencing services came in handy. One of his authors lived on a caboose in Wyoming, while another wrote from a houseboat in Florida; “he once had a shark bite off his TV antenna.”

Marta Dragelov, the fact checker, was an avid user of MCI’s news-flash service, which crammed her computer with such items as, “India Asks Phone Firms to Set Up Local Factories”—actual news stories that I could see while clicking on them. Peter Hoffman was away at home and working in his pajamas. Martin Banks, the technophobic editor, said he was “being tutored on the wonders of MCI electronic office ephemera by none other than Miss Ellen deRosset.” He hoped that she would notice his new pair of wing tips.

The real payoff for readers was in Curtiss Bruno’s office. Wearing a striped shirt and a tie and looking like an incurable office politician, he nevertheless held a hand over his mouth as if to say: “Maybe I’d better shut up before I spill too much.” Oh, Curtiss, why bother? I could tour an electronic version of the not-quite-completed winter catalogue—with listings of fiction, visual arts, poetry, and nonfiction.

All categories carried dates older than the Web area itself—MCI was apparently relying on imaginary contributors to prime the pumps. “Ivana diTommaso’s” background just seemed too New Yorker-ish. She had “grown up in Bologna, Italy, and Grosse Pointe, Michigan” and had “developed from a quiet film student” to “one of America’s fine short story writers.” If she existed, the electronic catalogue at the Library of Congress had yet to note it when I made a short detour by way of my software’s task-switching capability. Not that I trusted the catalogue. A branch of Random House had published my first book, The Silicon Jungle, yet it was missing from the LC catalogue that day; and for all I knew, maybe the librarians had also neglected the accomplished Ms. diTommaso. I charitably allowed for the fact that she just might exist.

Her story, “The Legend of Wendell County,” told how a county records keeper had become a community grandmother who, not content to record births, deaths, and divorces, tried her hand at marriage counseling and other social workish pursuits—until one day she lost her way in winter and turned into something else, a ghost. The bottom of the page carried an authentic-looking “© 1994 Ivana diTommaso.”

I moved on. “The Tree House” was a story from Katy Rudder, a member of “the first Peace Corps class ever assigned to China, where she is teaching English at Leshan Teachers College in the Sichuan Province.” Based on what I was reading, MCI’s artistic tastes—or its ad agency’s—were corporately wholesome. And so were its contributors. I doubted that Gramercy would have been the best place for the young Burroughs or Kerouac.

Perhaps this would change, maybe Gramercy would grow more adventurous with time, but right now I wasn’t sanguine in that regard. The nonfiction area was a real loss with just one title, of a harmless, theological type. I doubted that this would be the place for, say, Seymour Hersh or Robert Caro. Like the writing, the art looked competent and maybe much better, but, again, safely within corporate parameters.

The most cautious contributors were MCI’s lawyers, or whoever else had written the legalese for one Web site. All writers and artists had to send in releases saying they wouldn’t sue MCI for using accidentally similar material. The lawyers warned, “All work that is submitted electronically over the Internet needs to be accompanied by a hard copy of the release form, sent in separately by postal mail. We will not look at any work placed on our server until we have received the hard copy of the release form. All files on the server older than 14 days, for which we have not received a release, will not be reviewed....” I remembered the essay on theology. It was uninspired enough for an attorney other than Scott Turow to have written it, and sure enough, the author’s note said he was “happy with the practice of law.”

Despite the less-than-striking short stories and the soporific essay, I loved the sparkle of Gramercy Press as a whole. I recalled an area on the Web known as Bianca’s Smut Shack. Its creators let you get inside the head of a virtual woman, let you know what books she read, what movies she watched, what records she listened to, and you could add your own opinions. At the time I’d told the Shack crew, “Watch out, folks. Don’t be surprised if a big company creates characters in an ad where everyone buys the right products.” Well, it had happened. And MCI and its advertising agency had done many good things that people with their resources could more easily accomplish.

Building Notre Dame, thousands of workers had pieced together the stone, fashioned the gargoyles, assembled the stained-glass windows. And the MCI Web area, while hardly art, was somewhat like a cathedral. The area’s masterminds had bungled in some ways, but they had used sheer staff power to toil over countless details.

I was sorry when Mark Pettit told me that some Real People in Publishing had hated Gramercy Press. Didn’t they get it? Granted, the publishing company was stereotypical to the point of being self-satirizing. But so what? I was no more expecting MCI to be a first-rate publisher than I was expecting Random House to lay fiber-optic cable.

As a display of the Web’s potential to attract a mass audience, of course, the Gramercy endeavor had triumphed. For consumer business on the Net to take off, ads would have to be a complete departure from those on television, and MCI had done just that—even if it was able to benefit from characters from the older medium. Many small-timers could never have discovered an actress as perfectly suited to play Darlene as Katy Selverstone was. This was a real coup. MCI was brilliantly drawing in a big crowd through a skillful interplay of television, print, and the Net.

Selverstone herself had become a living ad for MCI, drawing stare after stare as she walked down the Manhattan streets. Her Gramercy role was a real tribute to her acting ability. Entertainment Weekly described her as not “much of a gadget-head. ‘I’ve got a 12-inch, black-and-white TV that emits a faint gaseous odor,’ she says. ‘And I have to change channels with a pair of pliers.’” The word from MCI was that she’d just bought a computer and would herself be on the Net. Advertisers hired models today on the basis of looks and I wondered if, in the future, they would consider the ability to give good chat online.

A major problem, however, arose with this scenario in MCI’s case. While I hadn’t asked for an interview or e-mail from the real Darlene, I had yet even to hear from her handlers after six weeks. These people had wooed me with a first-class Web area and encouraged me to write in, and yet they had then ignored me except for a little boilerplate from their DarleneDarlene-bot, who said she was busy coping with “emergencies.” The MCI media crew reinforced my skepticism; only after a series of phone calls was I able to pry basic information. On a day when Pettit solemnly promised he’d talked to me, he was off holding a press conference for the Wall Street Journal and the other usual suspects without alerting me about the postponement. Clearly this was a big company focused on other big companies, and I wondered if the small merchants in the Web area might suffer if they entrusted their fates to MCI. I myself was not just a writer. I made it clear that I was also a customer of MCI Mail, an electronic mail service to which I had subscribed for a decade. Perhaps someday I might even want a Web area through MCI. And this was the treatment I got?

If MCI slighted me—a writer-customer who spoke out in print and on the Net, and who had many friends there—how would it treat the Larry Grants of the future? I thought of the elusive, virtual character who had asked me to write to her. In a metaphorical sense, small merchants might futilely spend their days searching for Darlene. Now I wondered about Bob Lilienfeld. How was he coming along with his own information request? Was there any chance that White Rabbit might end up in an electronic mall after all? Lilienfeld, albeit not a mall booster, was in many ways a good prospect since he was so Net oriented and could appreciate a good deal. Why, he even owned stock in MCI.

Efficiently, however, MCI had alienated Bob Lilienfeld. Just like me, he had not heard a peep out of the company, even after filling out a form for his two months of trial services. He had followed up with three e-mail notes to an address set aside for prospects like him. I told MCI’s media people about this mini-debacle and was assured that someone would contact Lilienfeld. But after several weeks, no one had. MCI was nicely apologetic, of course. Mark Pettit and colleagues reminded me of the huge number of people who had replied to the Gramercy Press ad. They said, too, that MCI technical people were busy at work answering questions, while creative types handled the correspondence for Darlene. But they were missing the point. This was a massive advertising campaign, and they should have planned for success as well as failure.

The issue should not have had anything to do with corporate size. MCI could have requested zip codes and states and sorted out Darlene’s e-mail in that way—for area sales reps to answer if her handlers in New York were swamped. In fact, the form that Lilienfeld filled out did ask for his postal address. It also inquired, “What interests you?” so that, during the two-month trial, MCI could mail him news stories through the new automatic clipping service. “You can choose any topic: your competition’s advertising, the future of your industry, or southwestern cooking, anything,” MCI had assured him. And yet, after six weeks, he hadn’t received a single call or piece of literature.

As if that weren’t enough of an outrage, MCI’s fees might overwhelm many small business people. MCI wanted to charge some $2,000 a month for getting them on the World Wide Web—or at least several times what many independent malls would have billed. Yes, MCI talked about adding value through its brand name and through customer draws such as directory services for the Net and for voice. It would even line up copywriters for the storefronts. But what good would this do merchants whose volumes simply did not justify such expenditures? Pettit reminded me that a quarter-page listing in a phone directory cost $2,000. But that wasn’t true in many areas, and most merchants did not take out that much space anyway. Even then the typical business person might hire an extra clerk, and perhaps have money left over for advertising with a smaller cybermall. That, of course, was projecting into the future. After all, even Larry Grant wasn’t grossing more than $15,000-20,000 a year at the time, and the Lilienfelds had a long climb ahead to reach that level.

Perhaps MCI would learn. I still loved the sparkle of the Gramercy area and hoped that it would thrive in the end. Regardless of my doubts and frustrations, I hadn’t anything against the people of MCI, especially Mark Pettit, who, despite his absentmindedness, had actually been more helpful than the others. MCI wasn’t Canter and Siegel. It hadn’t disrupted Usenet. As long as it paid its own way and did not take advantage of its Net connections in ways that stifled competition—Washington needed to monitor MCI closely—then it could actually help the average Net user. The greater the volume on the Net, the greater would be the virtual pipeline and the lower the cost for everyone. So, far from disliking MCI’s interest in the commercial promise of the Net, I still saw plenty of potential here. MCI simply needed to understand the obvious. If its electronic marketplace were to succeed, then the company must price its services more realistically and not keep customers searching for Darlene.

A FedEx woman called me up and asked what the people in Memphis could do to retain my business, which had plummeted to almost zero volume. “You’ve given me great service,” I said, thinking of all the foot-to-throttle occasions when FedEx had picked up manuscripts on deadline. “But you see, I’m on the Internet nowadays. Everything for my current book project goes ever the wire.” I was working on a guide telling how to lobby for one’s political beliefs online, and the publisher had even received the book proposal via the Net. Lots of people were doing the same, not just with the Net but with commercial services and fax. On legal lists, some lawyers were debating the validity of electronic mail for business matters, but the new technology would quiet the discussion soon enough when foolproof, digital signatures could establish the identity of the sender.

No one needs to weep for FedEx, United Parcel Service, and the rest, however. The typical computer is a medium-sized box full of parts that come in much smaller boxes, such as a disk drive or a modem. And, as shown by the thickness of Computer Shopper and other magazines that cater to computer users buying from afar, FedEx and similar services are thriving. That is just one example. High-tech companies, especially the network kind, want reputations for reliability and fast turnarounds. They love the FedEx slogan: “When it absolutely, positively, has to be there overnight.” Courier services are godsends for corporations that rely on just-in-time delivery to reduce inventories of spare parts. If nothing else, this principle appeals to manufacturers with slim inventories. Also, more and more people are working at home. At the same time, upscale consumer magazines abound with ads touting merchandise via express, everything from steaks to flowers.

The real question, then, isn’t how to downsize but rather how to cope with the deluge of business in small packages. And Federal Express views the Internet as among the more promising of many possibilities.

For years, FedEx used its own network to set up computer links through which high-volume, Fortune 500 companies could request pickups, track shipments, and receive invoices. First, FedEx communicated with mainframes. Then it began supplying some customers with personal computers; eventually, some companies shipping as few as three packages a day could qualify. “We started with the biggest customers first and then extended that service to smaller and smaller companies,” said Robert Hamilton, a marketer at FedEx dealing with information matters. The next move was supplying tracking software through which people could use their own machines to dial up FedEx. Step by step, FedEx was working to get almost all customers online to its computers—even the operators of small home businesses.

The Internet could play an important role here because it is the closest thing to a universal computer network. By the mid-1990s people in the air freight business caught on to the advantages of the Net over the proprietary networks in many cases. The Internet reached scores of countries, no small advantage in an internationally oriented business, and planners could use the Net’s volume to help slash the costs of telecommunications and improve service to customers. Right-O-Way, a freight forwarder in Tustin, California, was among the Net pioneers. Back in 1992 the company had figured out how to use customers’ personal computers to print out bar code labels.

With portable radio-frequency scanners linked to the firm’s mainframe, Right-O-Way’s workers could track shipments for customers—could, in other words, offer the same services that ExEx could. Right-O-Way’s customers dialed up the company directly rather than through the Internet. But in 1994, Martin Hubert, vice president of information systems, hooked Right-O-Way into the Net for customers wanting to use it. He spent just $1,000 on additional UNIX software, modems, network setup charges, and programming time, and $350 a month in Internet-related bills.

“Some customers have tried it already,” Hubert said. “We have sales people use the Internet to access shipping data. Our advanced overseas partners can access our computer directly for e-mail, tracking, and tracing. Customers like BMW, ClothesTime, and Packard Bell access our computer and save money on long-distance charges from overseas.”^[2.7] Those companies could reach the Right-O-Way computer directly, getting immediate answers while they were online. Using the Net, they could even schedule shipments. Right-O-Way told me that it protected account numbers by requiring customers to use passwords that they received through sales reps and ways other than the Internet.

What’s more, the company served even customers having only the most basic of Internet connections. Yes, you could Telnet into the Right-O-Way computer system on the Internet—could issue commands as if you were at a keyboard at headquarters. But if you lacked Telnet capabilities and didn’t mind the delay, you could also send electronic mail messages in the appropriate format to track shipments or issue pickup orders.^[2.8]

Around the same time, FedEx and other industry giants were gearing up to do business on the Internet. The Net, of course, wasn’t the only possibility. Federal Express by then was an old hand at using its own network, which at the time accounted for more than 50 percent of the packages shipped. It was also distributing Windows and Mac software to enable tracking through the FedEx net. Just the same, in December 1994, after having earlier experimented with the Net for the distribution of press releases, FedEx turned to the Internet’s World Wide Web as a way for customers to track packages. Within FedEx’s Web area, they could key in the number of the package and get the latest information.

I checked out the Web service. At www.fedex.com I saw “FedEx” in big purple and orange letters, along with a short, easy menu that led me to electronic forms. A detour offered “Interesting Facts about FedEx!” It was the “world’s largest express transportation company,” had 1994 revenues of $8.5 billion, employed “more than 505,515 worldwide,” served 191 countries, owned more than 400 aircraft ranging from 32 Fokker F-27s to 5 Airbuses and 13 McDonnell Douglas MD-11s, operated “more than 32,560 vehicles, and shipped an average of more than 2 million packages each day.” Another menu item could tell me about pickup availability. If I typed in the time I would have a shipment ready to go, my zip code, and the destination code, among other items, then FedEx would tell me how soon it could deliver the package using Priority Overnight Service or alternatives.

Right now, however, I wanted to learn the whereabouts of a test package—containing nothing more than Robert Hamilton’s business card—that went out under airbill number 50044562. It was a no-brainer. I chose “Select Track a FedEx Package” and keyed in the number. Almost immediately I learned when a courier had picked up the package and when it had left Memphis. And eventually the Web would pass on other facts such as the name of the driver at the destination, the delivery time, and who signed for the package. An idea hit me. When you filled out an express form in the future, perhaps you could give both your recipient’s e-mail address and your own. Via the Net, a service could tell the other person that a package was on the way—and after it arrived, you’d automatically receive a receipt.

Even as the FedEx area existed now, however, it was serving customer needs well. Yes, I appreciated the flash of MCI’s efforts, and I understood why Darlene and friends were attracting many more people than the courier company was right now. But compared to MCI, FedEx left me feeling better. Those modest little electronic forms, the ones that would let me track packages and check out Ex’sEx’s service availability by location and time, treated the customers as individuals and responded in seconds. MCI, however, ignored Bob Lilienfeld, who, disgusted, later sold his stock.

On top of everything else, MCI, which had vastly more programming talent than FedEx did, had missed out on some major opportunities for interactive software. I could imagine a small company keying in a description of its telecommunications and network requirements and getting a series of at least basic recommendations. On a package-by-package basis and in the most private of ways, FedEx was doing this already—since its forms queried you about your shipping needs of the moment and then told you what services were available. The people at MCI weren’t dumb. They could turn around their operation in a flash—they might have done so by the time you read this—but in terms of customer service FedEx was clearly the winner right now.

“Five years from now,” said Robert Hamilton, “35 or 40 percent of the customers connected to FedEx could be using the Internet.” His company stood a good chance of saving millions in annual communications costs and the expenses of staffing phones. “The big factor is how individuals are connected today,” he said. “With CompuServe and America Online galloping in the direction of the Internet, maybe that will happen sooner rather than later.” FedEx would let customer usage, not official corporate policy, drive its use of the Net, and that is exactly how it should be. One way or another the Net would definitely figure in its plans. The only question was, “How much?”

The big need now, of course, was for customers to be able to key in their account numbers and get immediate pickups. FedEx did face some challenges here. FedEx needed to blend the Internet into its existing network of computers, and this complicated the security issues. FedEx wanted to make certain that a cyberthief couldn’t go on a joyride with an illegally obtained account number of a customer. So it was evaluating security-enhanced software from CommerceNet, a California organization that helped put businesses on the Net. Meanwhile, we customers could not use the Net to schedule shipments through Federal Express. FedEx had offered a temporary solution: we could at least download software that let us call up the company directly, or we could reach FedEx via America Online or another commercial network. That would do for the moment.

Mulling over what I’d seen and heard up to now, I could not escape three conclusions. First, it was clear that computer networks could be a help, not a threat, to delivery companies that were trying to upgrade service. No longer would I have to wait for an operator to schedule a pickup or check on shipments from FedEx. The second conclusion was broader: The Net often could be good for corporations of all sizes, not just Fortune 500 firms like FedEx. Right-O-Way had staked out its own place in cyberspace by going for the simplest solution—Telnet and electronic mail—rather than worrying first about the World Wide Web. The company could add the Web later. On the Internet, with its inherent economies for the Right-O-Ways of this world, “smaller” didn’t have to mean “backwards.”

The third conclusion about these case histories resulted from my comparisons of MCI and the courier companies, and it transcended the fact that they were in different industries. Even on the Internet, good customer service would have to be a company’s first priority and counted even more than the technology per se. Oh, you could use electronic forms. But unless you programmed the forms to provide the right services—rather than simply trying to sell The Product and awe the customers—you might actually alienate the people you were trying to befriend. MCI didn’t understand this sufficiently. FedEx and Right-O-Way did.

The Internet, of course, can hurt as well as help business. Well populated with skeptical academics—whose postings often find their way onto the screens of equally skeptical journalists—the Net is a good place to learn about scams. Legitimate companies, of course, needn’t worry: They will benefit as word of their successful products spreads, and the Net excels as a conduit for rumor control. Should there ever be another Tylenol scare, you can bet that publicists will use the Net to get the truth out. Even legitimate businesses, however, can feel the wrath of the Net if they err—as Intel, the chip maker, found out in the ugliest of ways after it released the Pentium chip.

The Pentium chip was the new flagship product, the speedster that would let PCs impinge on minicomputer territory. But that wasn’t all. Intel envisioned the Pentium as the perfect chip for computers aimed at the home market. No longer would Mom, Pop, and The Kids poke along with computers weaker than those at the office. Thanks to Intel, they would enjoy glitzy cartoons, educational programs, and other multimedia offerings in full glory on their machines at home. Intel launched a major TV campaign and persuaded scores of computer makers to adorn their boxes and ads with “Intel Inside” stickers. Intel was looking ahead to millions of dollars of Christmas-related sales. At the time, I suspect, the Internet didn’t figure that prominently in Intel’s plans. Its Net area was hardly as dazzling or as ambitious as those of many other companies. That would change.

The trouble started when a mathematics professor in Virginia found that under certain conditions, the Pentium chip would make mistakes in arithmetic. There at Lynchburg College, Dr. Thomas Nicely couldn’t believe his screen. To his amazement, he was able to verify that the chip, not the human, was at fault here. In October 1994 the professor’s “Bug in the Pentium” memo went out over the Internet. It circulated rapidly from mailing list to mailing list, from newsgroup to newsgroup, as well as on commercial nets such as CompuServe and Prodigy.

Pentium-hostile messages flew back and forth between scientists, corporate executives, consultants, and other influential people, who, thanks to the Internet, could share complaints more efficiently than ever. Intel tried some damage control via the Net and in press statements. The heat reached the point where the head of Intel asked a underling to issue an apology and a technical explanation. The message betrayed corporate panic, pure and simple. “I am posting from my home system,” Richard Wirt, Director of Software Technology, prefaced a weekend note. And then came an “I am truly sorry” message from Andy Grove, President of Intel. In various statements Intel assured customers that the average computer user would typically run across the problem once every 27,000 years. The official line was that nontechnical people needn’t worry. Intel announced it would replace chips if people could show that the defect could harm their work.

That still didn’t placate the Net and the media. Netwise reporters at papers such as the Washington Post and New York Times and at Newsday warned the thousands of Christmas shoppers who were about to buy $2,000 Pentium machines. Billions of dollars were at stake here. Computer makers had already moved millions of Pentium machines, and IBM came out with a statement saying that it would replace defective chips—even though Intel kept claiming that the nontechnical need not worry. It didn’t help when shoppers learned that Intel knew about the Pentium’s defects as early as June.

What most threatened the Pentium, however, may have been the humor. It started on the Net and, via mailing lists such as On-Line News, reached major newspapers. David Letterman started cracking jokes. Politicians and chips had something in common. If still quite alive when Letterman ridiculed it, the Pentium was headed toward the emergency room afterward—given the speed with which the story was traveling around. On the Net itself, and on the front pages, typical Pentium humor went something like this:

Q. “How many Pentium designers does it take to screw in a light bulb?”

A. “1.99904274017, but that’s close enough for nontechnical people.”

Q. “What do you get when you cross a Pentium PC with a research grant?”

A. “A mad scientist.”

Q. “What’s another name for the “Intel Inside” sticker they put on Pentiums?”

A. “The warning label.”

Maintaining to the end that this was more of a marketing problem than a technical one, Intel relented. It agreed to replace chips for free without interrogating the public. What’s more, Intel expanded its presence on the Net. It now offered a nice area on the World Wide Web with items ranging from product descriptions to job announcements. Still, this fiasco aside, Intel had a good reputation for quality control, and by not shrinking from the Net community, it was responding correctly.

Another major lesson should also have sunk in among marketers of all kinds—beyond the obvious fact that the Internet could spread news of flawed products. Customers throughout the world could use the same channels to find out about geographically based price gouges. If a software firm charged reasonable prices in the United States but boosted price tags for Europeans, then the Net would spread the word. Software companies might not appreciate this immediately, but sooner or later they would. This was especially true of companies sending their products over the Net. The Internet Adapter, the product that had proven to be so good to my wallet, would have cost me $25 even if I’d lived in Antarctica or New Zealand. I wondered how long it would be before the traditional vendors of shrink-wrapped software would understand this lesson and stop squeezing customers outside the United States. Even with the expenses of middle people and translation factored in, the prices of some American software products were too high in Europe. Consumerism on the Net just might make the marketplace more sane.

Not surprisingly, the old sixties people saw the Internet as a victory of smallness over big corporations. Little companies could use the Net in new and imaginative ways and woo prospects thousands of miles away. Some enthusiasts promoted the Net as a powerful weapon for individuals who hated life in sluggish, bloated corporations.

Still, the Net might not always be a Nirvana for small entrepreneurs. Consider the Lilienfelds. What if toy companies decided to sell on the Net directly, for example? The Lilienfelds themselves could still fare well since they were working hard to become known for personal service. For example, if a toy weren’t shown online, Bob might even scan in a photo from a wholesaler’s catalogue and e-mail it to an interested buyer. And he and his wife were planning to make themselves a conspicuous presence in relevant newsgroups, while respecting netiquette. But not all of the small merchants would be as astute and dedicated. I suspected that many bankruptcies lay ahead.

Other problems might hit large as well as tiny companies. Many customers refused to give their credit card numbers online; in fact, many stores didn’t even want them. The Net wasn’t entirely secure. Theoretically, snoops in a number of locations could intercept orders and pick up the MasterCard or VISA numbers with software that looked for common data associated with credit cards. I regarded this as a temporary problem. Lilienfeld had dealt with it nicely by letting people—at least those in the United States—phone in their credit card numbers for free. The numbers would remain safe in White Rabbit’s computers, ready for future transactions. Besides, as Lilienfeld pointed out, it wasn’t worth the trouble for thieves to keep a tab on small stores like his.

Bigger businesses, however, were right to worry, and solutions were on the way. Popular browsers such as Netscape, for example, were coming with security features. Customers would be able to effortlessly transmit their credit card numbers in encoded form.

What about the problem of customers without sufficient funds to pay for merchandise? Some Web merchants could almost instantly verify that a customer had enough money in a credit account. The process would be even easier if companies such as Microsoft followed through with plans to team up with credit card companies. But that still left another worry for customers—privacy.

If you use old-fashioned paper money, your transactions aren’t traceable. With electronic money—or with regular credit or conventional debit cards—they might be. What if you were a gay woman, lived in a small Arkansas town, and enjoyed lesbian literature? Or suppose that in the future you were caught up in a divorce and your wife employed a cyberdetective to snoop on your spending habits? DigiCash, a company in Amsterdam, thought it had a solution in the form of anonymous electronic money that you could spend without being traced. Only your digital banker would know for sure. The possibility, of course, gave fits to tax collectors throughout the world. It was one of the reasons why bureaucrats in the United States had lobbied so hard for industry to adopt the Clipper chip, which allowed federal snoops to break its codes. Clearly, however, the Clipper effort could harm U.S. companies. Suppose foreign governments used a similar approach—making it easier to steal commercial secrets from American-owned multinationals?

Still another threat to business is from people who might spy on or change data on corporate systems. Hackers got into General Electric computers containing secrets. The solution to these electronic thefts, in many cases, was stronger “firewalls”—electronic gateways between public and private areas. In some instances, however, the threat was exaggerated. Yes, in theory, hackers could turn your home phone into a pay phone or make off with your corporate password or spy on your electronic mail. And some hated commercial activities on the Net and were ready to act. But by far, these were exceptions: most of the better hackers were benign—they saw themselves more as scholars than as snoops and saboteurs. Indeed, old-timers would not use the word “hackers” to describe the malevolent; no, they were “crackers.”

Ironically, on the Net, the real worry isn’t hackers but snoopy competitors, who, without necessarily breaking the law, can find out information about prices and new products much more efficiently than before. A rival phone company has paid thousands and thousands of visits to the MCI area on the Web. This must be going on constantly. Earlier, Digital Equipment Corporation offered software demonstrations over the Net and found that its competitors were tying the machines up. More scrupulously, companies could use powerful searching tools such as the Lycos on the Web to seek out files mentioning rivals’ products. They could also send the names of rivals to a computer at Stanford University. And then whenever a company was mentioned in a major Usenet newsgroup, an electronic clipping service would send the information back to them at no charge. A careless engineer or marketer could jeopardize thousands or millions in investments. The answer, of course, is to educate people about the risks.

Not so controllable is the risk of companies using the Net to troll for unfavorable mentions of rivals—grist for negative advertising. There is only one solution: make better products or give better service.

Of the goods and services discussed here, a major kind is conspicuously missing so far: entertainment. Some of the best is free. Just ahead you’ll find a favorite of many Netfolks—the Internet Underground Music Archive, from which you can download free samples from top hits as well as surprises from new musicians.