It made sense to him that a few years from now a few huge winners will intermediate most online commerce at the retail level. So he forecasted the cash flow these players would generate. He found that on a discounted cash flow basis, many of the eventual winners were actually not only fairly valued-some were undervalued. Gordon envisions an Internet dominated by firms able to provide such a consistent high level of service that people would ultimately use them as one-stop portals to the rest of the net. He believes that financial service firms and Internet portals have the best prospects in today's Internet marketplace.
Banks have three main assets-customer base, payment system access and consumer trust for payments.
Consumer trust and desire for convenience will allow these firms to take advantage of their dominant position and market all sorts of goods and services of their own, as well as reselling other vendors items, for which they'll receive a fee. Like Wal-Mart, a company that takes advantage of its size to squeeze unbelievable deals out of its suppliers, these new monster portals will do the same on the Internet. Just as in the bricks and mortar world, the end game for Internet companies is the number of customers they can attract. And since it is the sustainable transaction tax that will be the lion's share of successful Internet companies' cash flows, they need more than customers' eyeballs. They need their pocketbooks as well.