High Gas Prices Are Good News for Tech

  |  June 14, 2000   |  Comments

Gas prices are going up again, and that's great news for Internet companies. Higher energy prices make the Internet's advantages more obvious. It's more efficient to distribute goods from a central warehouse than from a shopping center. The Internet extends this efficiency to the "last mile" between the store and your home. Dana explores the enormous opportunity in all this, and guess what? There's money to be made.

There was great news in my newspaper this morning.

Gas prices are going up again.

Higher energy prices are great news for Internet companies. Higher energy prices make the Internet's advantages more obvious.

It's more efficient to distribute goods from a central warehouse than from a shopping center. The Internet extends this efficiency to the "last mile" - between the store and your home.

If you can meet your friends online rather than by driving (some of the time), you've saved some trips. The same is true for some of those interminable business meetings you've been sitting through.

Computer games are closer than the mall. If nothing else, your kids can use email to arrange ride sharing.

Telecommuting is fun. The reason some executives are afraid of it is because they don't know how to support home offices.

There's enormous opportunity in all of this if we take our blinders off and realize some important facts. Most people don't use the Internet, and most of those who do use it, use it intermittently and inefficiently.

The bad news is that you won't get credit for this, not in the way you may have gotten credit for "inventing" e-tailing a few years ago. Higher oil prices mean higher prices generally, and higher interest rates. Higher oil prices also redirect equity investment into (guess where) the oil business. The next hot IPO is likely to be outfit-making fuel cells.

But I can see many types of companies whose stocks will become, if not hot, then at least lukewarm. (Some may even regain a pulse.)

DSL demand is already explosive, and it's about to become more so. The public visibility of fights between owners of wires (Bells and cable companies) and their competitors will look like nothing next to the coming wars between real estate owners and wireless communications companies angling for rooftop "real estate."

Webvan and Homegrocer are getting a new lease on life. Their user interfaces right now are primitive, and their selection is limited, but both hold enormous potential.

Telecommuting consultants will help design home offices, make them more efficient, and provide lifestyle advice as well as technical support. You don't need it, I don't need it, but millions of others do.

I hate to say this, but expertise in dealing with government (at all levels) is about to become a priority in the Internet economy. Combine a growing legal caseload, the need for arbitration between phone companies, and the increasing inclination of government to use the law against what people do in the privacy of their own screens, and you have real opportunity.

I'm certain there are many other areas where demand is going to explode with higher energy prices. But this is an interactive medium. We have a great forum here, and it's your money (not mine) that's going to be put at risk here, anyway. So let's not just think about it and talk about it. There's money to be made here. Let's get after it.

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ABOUT THE AUTHOR

Dana Blankenhorn

Dana Blankenhorn has been a business reporter for more than 20 years. He has written parts of five books and currently contributes to Advertising Age, Business Marketing, NetMarketing, the Chicago Tribune, Boardwatch, CLEC Magazine, and other publications. His own newsletter, A-Clue.Com, is published weekly.

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