Though rising rapidly, online airline bookings represent only about 9 percent of all reservations, reports PhoCusWright Inc., a Sherman, Conn., consulting company. Online stock accounts have increased dramatically, but they haven't obliterated traditional brokerage accounts. The New York Stock Exchange estimates that online accounts rose from 4 million in 1997 to 18 million in 2000, while traditional accounts declined from 61 million to 60 million. The Internet simply isn't yet the most efficient, convenient or appealing way of delivering most goods and services. No doubt there are many genuine efficiencies.
Corporations can tie together suppliers quickly and cheaply.
What seems wonderfully inexpensive for the user can be frightfully expensive for the producer. On the Internet, average costs are high and marginal costs are low, nearly zero. For the Internet, this is negligible. The gap between average and marginal costs is bridged by today's subsidies, which, for businesses, mean losses. The paradox is that the Internet seems to deliver so much information to users at so little cost that much of it doesn't have much value.