21st Aug, 2008

Internet E-commerce and Law of Business Divergence part 1

Everyone talks about convergence, while just the opposite is happening.

Whenever a new medium hits town, the cry goes up, “Convergence, convergence. What is this new medium going to converge with?”

When television hit town, there were stories everywhere about the convergence of TV with magazines and newspapers. You weren’t going to get your magazines in the mail anymore. When you wanted an issue, you would hit the button on your TV set and the issue would be printed out in your living room. (We don’t make these things up. We just report the facts.)

When the Internet arrived, the same type of stories appeared. Now you can surf the Net while you watch TV. (Microsoft’s WebTV is the leading supplier of the service.)

Many companies have tried to combine a television set with a personal computer, with a notable lack of success—Apple, Gateway, and others.

DODO Marketing BlogConvergence has become an obsession at Microsoft. “Has William H. Gates become the Captain Ahab of the information age?” asked the New York Times recently. “Mr. Gates’ white whale remains an elusive digital set-top cable box that his company, the Microsoft Corporation, is hoping will re-create the personal computer industry by blending the PC, the Internet and the television set into a leviathan living-room entertainment and information machine.”

The PC, the Internet, and the television set will combine? It will never happen. Technologies don’t converge. They diverge.

Many Internet branders are falling into the convergence trap. They look for ways to blend the real world with the Internet world. Their ingenuity knows no bounds.

Facsimile and telephone service from your computer or television set.

The media have been fanning the convergence fire for a long time. According to a 1993 article in the Wall Street Journal:

Shock is a common feeling these days among leaders of five of the world’s biggest industries: computing, communications, consumer electronics, entertainment and publishing. Under a common technological lash—the increasing ability to cheaply convey huge chunks of video, sound, graphics and text in digital form—they are transforming and converging.

The New York Times put it this way:

Digital convergence is not a futuristic prospect or a choice to be made among other choices; it is an onrushing train. The digitalization of all forms of information (including the transmission of sensations) has proven itself to be accurate, economical, ecologically wise, universally applicable, easy to use, and fast as light.

Fortune was just as enthusiastic:

Convergence will be the buzzword for the rest of the decade. This isn’t just about cable and telephone hopping into bed together. It’s about the cultures and corporations of major industries—telecommunications (including the long-distance companies), cable, computers, entertainment, consumer electronics, publishing, and even retailing—combining into one mega-industry that will provide information, entertainment, goods, and services to your home and office.

The media are putting their money where their mouths are. The Wall Street Journal publishes a magazine called Convergence. Forbes recently published a special issue entitled “The Great Convergence.” Business Week runs an annual conference entitled “The Global Convergence Summit.”

With the media running off at the mouth about the convergence concept, is it any wonder that many corporations were all too eager to jump on the bandwagon? When asked by Fortune magazine what unique opportunities Compaq was looking at, the new CEO, Michael Capellas, said: “You’ll start to see devices converge. Who in the world doesn’t want to have their PalmPilot, their telephone, and their CD player all wrapped into one so they don’t have to carry three things on their belt?”

It will never happen. Technologies don’t converge. They diverge. Yet the hype marches on.

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Internet E-commerce and Law of Business Divergence part 1

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