Michael Hirschorn

A weeklong electronic journal.
April 2 1999 10:30 PM

Michael Hirschorn

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Pondering the Internet as a consumer and would-be investor yields some strange juxtapositions. I spent part of this week trying to book tickets through Cheap Tickets and Priceline.com, the latter of which went public this week to the now usual hullabaloo. Though I'm nothing if not a Web booster, I couldn't help smelling the whiff of snake oil about both sites. Cheap Tickets asks for your credit card info before you get to muck about with its ticketing service. Then, when entering info about a European city, any European city that is cheap to get to, it spits out a series of price points that turn out to be unavailable. The cheapest actually buyable ticket to London is almost $600, more than twice the lowest advertised fare. Over on Priceline.com, an even greater act of faith is required: You give your credit card information and commit to purchasing the ticket before you know what the ticket is. You have already agreed to one stopover or plane change, but you have no idea whether you'll be heading to Europe via Vladivostock on, say, Vlad the Impaler Air.

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By coincidence, I was able to sneak in an order for 100 shares of Priceline.com at offering, which meant I could theoretically have used my IPO profits to finance the entire trip first-class.

Call me self-serving, but I see this experience as marking a next stage in Webonomics. The dictates of Web commerce have already turned the entire medium into a loss leader. I can buy hardcover bestsellers on Buy.com for seven dollars and plane tickets (theoretically, anyway) below cost. This process, by which not only information, but everything, moves toward zero cost, is not necessarily so different from what's still happening a decade and a half after long-distance phone service became a free-for-all. After all, Web sites are not yet (as I far as I know) paying $40 to $100 for the honor of getting your custom, as MCI, Sprint, and AT&T do, but neither can Web businesses be reasonably sure they will recoup that amount in a month or two.

So, here's a modest proposal: If Yahoo can pay $5.7 billion for broadcast.com, why can't they pay me a thousand dollars in pro-rated, constantly vesting options to use Yahoo instead of Excite? In return, I promise (really) that I will give Yahoo, say, 1,000 page views a day. That way we can cut out money almost entirely; that is, until I need to cash in for Concorde tickets sometime next spring.

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