At the beginning of the 1990s, Dr. Santolalla, noted lecturer of Marketing at the University of Barcelona (UB), spoke in the lecture halls of the Economics Faculty about a network that was destined to revolutionize the way companies related to each other. Time would in part prove right what was then believed, but not between companies - between companies and individuals.

In Spain, from 1995 onward, and of course prior to that in the U.S., the boom in this network took place: it was called Internet. Round the world millions of people threw themselves, along with billions of dollars, into it while, paradoxically, at the same time reams and reams of pages were written and printed.

Now things have changed: the victim of speculation, it has become the target of an unjustified witch-hunt. It is not that Internet has not been good enough, but simply that it has not turned out to be what it shouldn't have been anyway. But, what has happened exactly? At another time and place we could consider the models of virtual income in essence (subscription, info mediation, advertising, communities), but... how has the virtualization of the most classic models of income worked, such as those of the manufacturer, the dealer or the intermediary? Where is my income?

The first model, then, we have to analyze is that of the manufacturer or provider of services. "At last," it was said, "manufacturers will be able to sell directly, and the intermediaries will disappear, as it saves on distribution costs."

With hindsight we have seen that very few manufacturers have opted for it, and even fewer have been successful at it (Dell excepted). The future of the direct sales models, not very optimistic it must be said, will be to focus activity on the pre- and post-sales functions. In other words: to offer the maximum information and to guarantee quality technical service. Either that or create lines of independent businesses linked to physical commercial activities (as some publishers have done with bookshops). Therefore, first lesson: "Internet was not set up for sales only."

The second model, the e-trader, opted for those he called pure players. The success of the sublime, indefatigable Amazon.com augured a promising future for many as it enabled them to achieve great market strength in a short time. Thus, virtual businesses began to appear all over: the competition was only a click away.

In practice, the pure player models have in general been shown to be unviable due to the maintenance costs (staffing, technology, stocks), and above all due to the impossibility of recouping the excessive investment made. Bol.com is an example of this in Spain, bearing in mind that it was not a case of bad management; purely and simply, there was not yet a big enough market for so much investment.

The future of e-trading will be the integration with physical activities, the moderation of investment, and opting for such "real" things as service and knowledge of the market. For example, Llibres.com has behind it the chain of "real" bookshops, Proa Espais. Second lesson: "Internet works better if, at the same time, it has a real world behind it."

Finally, the intermediaries were the new players who had to supplement the classical function of the brand or the price in the real world, and who, faced with the infinite offer available on Internet, had to guide the eventual user or buyer.

Whether it was due to the difficulty of controlling and charging for the operations actually made on-line (think about the auctions), because the price factor has been too important; or because at times a brand lacked credibility; whether it was the costs of catalog integration technologies and their maintenance (on-line shopping centers), the models haven't worked, apart from honorable exceptions like SecretariaPlus.com. From the latter we can learn what has to be done: diversify the sources of income, even to off-line sales (outside the net); the total affiliation to the interests of the eventual user; the segmentation of the market with commercial criteria. Third lesson: "On Internet, like in the real world, you have to create value".

In conclusion, although it is true that the market is still not mature enough, entrepreneurs and directors can save themselves headaches if they foresee that they must complement Internet with off-line activities, they must moderate investment, they must really get to know the market well and that, above all, Internet will one day be what it should be, and I'm sure it will be very, very important.

Published in: Dossier econòmic de Catalunya, Dossier de les tecnologies; October 20, 2001.