Riding the information superhighway: the Internet is great for retrieving information, but can it help businesses drum up clients and boost sales?

STEPHEN JACKSON'S FIRST ENCOUNTER WITH THE information superhighway is typical of most entrepreneurs'. It was five years ago, when he started Jackson & Jackson Management Plus Inc., a company that leased full-time employees to technical and professional firms (i.e., doctors, lawyers and accountants). Initially, Jackson and his staff used online services to send e-mail messages to each other.

In 1993, Jackson created an electronic library allowing clients to access information over the Net, which helped trim the fat off of paper, postage and fax costs. "So, at the time, the Internet was a way for me to save on overhead costs, not to make sales," says the 39-year-old Jackson.

Then Jackson caught the wave and started surfing the Net for business prospects. Last year, his $4.75 million firm started offering Internet training, marketing courses and Web page development. He shut down the employee leasing component of the firm to focus solely on doing business via the Net.

In the first eight months, over 800 people signed up for the courses. The training seminar ($129) essentially provides hands-on exercises in using the Internet, while the marketing course ($250) teaches participants how to sell their products or services effectively over the Net. In addition to having his own Web site, Jackson has created sites for some 11 small businesses looking to sell everything from T-shirts to newspapers online.

"Companies that conquer the Internet today, will be in a stronger position to capture the consumer market tomorrow," says Jackson.

But is the Information highway all it's cracked up to be, or is it mostly hype? In other words, are thousands of entrepreneurs hitching their wagons to a false star? It's too early to tell, but there are strong views on both sides.

"We're in a climate of fear," says Allen James, executive director of Harlem-based Playing to Win ([e-mail]. worg), a nonprofit organization that provides computer access information to inner-city youth and adults. James fears that the Internet may be raising false hopes, scaring people into thinking that if they're not on the Net, they'll be in trouble.

"The media has thrust the information superhighway on us, but we have yet to understand what the phenomenon is."

Even Jackson warns "the Internet isn't for everyone." He cautions that to do well online businesses must carefully research their markets. "If you weren't running your business adequately before you get on the Net, don't expect magic overnight once you are on it."

Jackson's site (http:/www.tnp.cm/~joker) consists of an overview of the company, registration information on the courses, past articles he has written for trade publications and a small business resource directory. In the first eight months, the Web site received more than 130,000 hits (the number of times it was accessed) and generated over $600,000 in revenues.

Many insiders retain their unbridled enthusiasm and discount warnings against being stampeded onto the Information Highway. They believe that African American businesses may miss out on a golden opportunity if they ignore the Net.

"The resistance [to using the Net] is the same that we heard when Ford developed the automobile," says Ollie Morgan, former president of the National Black Data Processing Associates (BDPA [e-mail]), a national organization with nearly 3,000 members. "'How will it work?' 'What will it cost?' 'How can we trust it?' It's the horse-and-buggy mentality all over again."

Morgan and other boosters of the Net argue that as the number of online users increases, computing via the Internet no longer will be viewed as an exception but as the rule of doing business.

While others argue, Karen Pugh, owner of KP Studio in Brooklyn, NY, is in the process of finding out. And she is proceeding carefully. A former creative director for world-renowned designer Ralph Lauren, Pugh is looking to sell her fashion line over the Net.

By doing some old fashioned comparison shopping, Pugh found that it would be cheaper to produce a catalog of her designs on the World Wide Web instead of taking the more traditional print approach. Creative work, paper, postage, and other production expenses could cost upwards of $12,000 a page to produce a paper catalog, and that overhead, personnel and costs of material would have been almost five times that amount. In contrast, she could post a six-to-10 page catalog on the Net for about $500 a page (includes the cost to upgrade the page regularly).

Pugh is planning ahead to keep pace and possibly outrun the competition. Pugh, whose business plan now includes a section covering the cost and market analysis for a Web site, says she sees the Internet as a way to efficiently expand the business. "My market is primarily professional women who don't always have time to shop in big department stores," says Pugh who initially did custom fashion designs for individuals and consulting for small black-owned clothing stores, such as Spike's Joint, owned by film director Spike Lee.

The 35-year-old entrepreneur believes that in the ultra-competitive fashion business she must do something to stand out from her fellow designers. SO, instead of draping her clothes on stick-figured models and have them sashay down a runway next fall, Pugh's designs will be coasting down the information superhighway--to an audience some claim to be as big as the population of Rhode Island.

Among the advantages Pugh hopes for from being online is access to a global market. "On the Net, companies can offer services or products around the world," says Roosevelt Roby, president of the Santa Monica, Calif.-based World Business Exchange, which he has dubbed "WBE-NET" (http://www.wbenet. com). The service is an online bulletin board on which small businesses can post their products and services for an annual fee of $450. "An automobile parts store in Ohio can sell its products globally, shipping them via UPS and Fed Ex," says Roby.

As important, the Internet gives entrepreneurs equal opportunity in reaching wider markets. On the World Wide Web, the playing field is level. A small African American company can create a site that is as deep and meaningful as that of a Fortune 500 firm. "What's great about the Internet is that no one owns it. It's there for the taking," says Jackson.

But unlike traditional media, such as newspapers, magazines and television, there is no reliable way to know how many people a Web site reaches. Everything is guesswork.

The figures that exist are often produced by people who have a vested interest in hyping the market. Even numbers released by the respected Nielsen Media Research, a unit of Dun & Bradstreet, are being questioned by some: Nielsen's latest data show that more than 24 million affluent adults in the U.S. and Canada have access to the Internet. Of those, 2.4 million purchased goods and services through the Net in 1994, Nielsen says. But those figures have been challenged by Vanderbilt University professor Donna L. Hoffman, who estimates that there are only about 10 million Internet users.

Clearly, not everyone is hooked into the Internet. According to a 1993 Census Bureau study of 55,000 households, 37.5% of whites were using computers at home, work or libraries compared with 25% for African Americans. But just as clearly, use of the Internet will increase. How it will be used and by whom--and how anyone will make money on it--remain open questions.

A Vanderbilt University report in 1994 indicated that about 22% of all companies on the Internet earned profits or broke even. Although online shopping revenue doubled to $500 million in 1995, that figure accounts for less than 1% of total retail sales, according to Jupiter Communications, a New York-based research firm. The problem, however, is that inquiries about products or services tend to be counted as sales.

Even without hard statistics many will want to take the plunge into doing business on the Internet. The question remains: How do I make any money? Some are using the Internet primarily as a means of direct selling. Others hope to make money by offering the equivalent of advertising space on their Web sites. Some want to use it merely to create an image, while still others are conducting surveys or seeking consumer input.

SELLING ADVERTISING ON THE NET

According to Forester Research Inc., a market research firm in Cambridge, Mass., companies spent $10 million to advertise on the Web in 1995. That figure could hit 2.2 billion by the year 2000, it says.

Jonathan Robinson, vice president of San Francisco-based Petry Interactive, which sells ads on Web sites, says the most common advertising method on the Web is signing up companies as "sponsors" of Web sites. Larger firms have been known to pay $40,000 or more to sponsor a site. Smaller companies are paying as little as $15 per 1,000 surfers reached.

Robinson says the price advertisers are willing to pay depends on whether they think the site will reach the desired market segment. The ads usually are banners or icons. Surfers click on them and up pops a reference to the advertiser's own Web site or an actual ad. Large companies using this kind of advertising include the airlines, record companies, big car companies, computer companies and banks.

Vibe magazine (http://www.vibe.com) "went Net" about a year ago as part of a strategy to diversify its readership and gauge reader interests. But the site itself has begun generating advertising revenues, says Keith Clinkscales, CEO and president.

"Vibe is about the youth culture and young people are embracing the Internet," says Clinkscales. "When MCI, Air Walk, Saturn and Timex saw our numbers, they came aboard [advertised] on our site." Vibe says its site averages 150,000 hits per week.

Since last June, Smart Technology, Inc. (http://www.lotus.com/partcat/ 5896462.htm) of Alexandria, Va., has been offering its products--computer hardware and software--through Web sites operated by IBM and Lotus. Smart, a black-owned concern, has its own page within the IBM/lotus site. During its first six months Smart's pages have attracted 18 inquiries, and six of those have turned into genuine contracts, says Perry Carter, vice president of information services. Even before linking up with IBM/Lotus, Smart was providing information to its customers through e-mail.

Those interested in selling their wares on the Net can sign on to a number of "shopping malls." On TechMall, which is based in Cosa Mesa, Calif., "tenants" can post information about their products and services along with visuals. TechMall (http://www.techmall.com) converts their information into a professional-looking World Wide Web home page. The cost is $33 per month. At year-end, there were fewer than 10 steady businesses on TechMall, and most of those offered technological information.

Technology companies tend to dominate Internet sales efforts, and for good reason. They are the firms whose products attract people who spend time in cyberspace. Industry insiders say that some companies involved in information and technological services are making money while other companies aren't.

Rather than using the Net to produce ad revenue, United Media (http://www. unitedmedia.com), the newspaper feature syndicate, uses it to promote its new products. The force behind United Media's effort is Alma Derricks, (executive director of new media development who is also the founder of Exodus Digital Media. Derricks is responsible for bringing some of the company's 150 features to the Net, including Dilbert, Peanuts and African American cartoonist Robb Armstrong's Jump Start.

"Because of our Web site, more people than ever have been exposed to the comic strip Dilbert, which makes it easier for us to sell Dilbert [ancillary] products online," says Derricks.

WBE-net's Roosevelt Roby says that the key to attracting people to a Web site is to market and advertise its product or services. He says a site can get 40 to 50 hits with no advertising, mainly from people who "are browsing and bump into your site." But, "if you advertise your site via industry magazines, local newspapers, online catalogs, usenet groups and electronic bulletin boards, and if your site is engaging, you can bring 3,000 or more users a day to your site." Roby claims he gets 5,000 hits a day.

The biggest problem, and one that grows by the day as more people get on the Internet, is it is easy to get lost in the mass of cyberspace. "Those who don't understand the system will fail," predicts Roby. People who know how to place their pages in the right search engines will do well because the first thing online subscribers do is a search, he says.

Your company should come up under a hundred different listings or buzz words beyond the company's name. Roby notes that to get listed in, say, 200 search engines could cost you about $170 to $200.

As the base of Web users continues to explode, the debate will continue to rage as to whether or not the information superhighway is a road to financial glory. Some insiders maintain it's just too soon to tell how much money businesses stand to make by posting Web pages.

Still, others argue that it boils down to the haves and have-nots and that African American businesses can't risk being in the latter group. "The Internet affords us a chance to share, connect and create in a way that didn't exist even 20 years ago," says Derricks. "We should take advantage of this technology. My worst fear is that years from now we'll be sitting on the sidelines asking why we weren't represented."

RELATED ARTICLE; AVOIDING WIPEOUTS ON THE NET

The Internet has not been without its share of drawbacks, from computer hackers to pornographers. Security is cited as a chief issue among business owners and consumers.

"Providers are increasing their security features. Confidentiality and transactions are not protected. Hackers and pirates con steal information, including credit card numbers," warns Mario Drummonds, chief information officer of New York-based Chocolate Chips Electronic Office ([e-mail]), a not-for-profit information and technology training company. The company paid about $2,000 to develop a digital gateway to the Internet utilizing the services of Nynex, New York's local telephone and telecommunications giant, and SpaceLab Net, a local Internet service provider.

There ore no guarantees, adds Drummonds, who also points out that people often give their credit cord numbers freely over the telephone.

Efforts to design tamper-proof electronic payment systems are under way. MasterCard is introducing new software in April for credit card protection, and Visa and Microsoft are designing an alternative system to safeguard credit card numbers from online tampering.

To enhance safety on the net, some service providers provide 800 numbers for orders. Others allow users to fox or e-mail information for call backs or establish a password to access an account.

RELATED ARTICLE: GLOSSARY OF COMPUTER TERMS

Bps (bits per second): The measure of speed in data transmission. For a modem it is the number of times per second that it can change the frequency of its analog signal.

Browser: A program, such as Netscape Navigator or Mosaic, that allows you to find and access documents from anywhere on the Internet.

CD-ROM (compact disc-read only memory): A compact disc that serves as ROM (read only memory). CD-ROMs can store over 600 megabytes of data.

CPU (central processing unit): The part of a computer that interprets and executes instructions. The CPU of a personal computer or small workstation consists of a single chip called a microprocessor.

Download: To transfer a copy of a file from a central source to a peripheral device or computer.

Encryption: The process of encoding data so that it is inaccessible to unauthorized users.

Hard-disk: A rigid magnetic disk fixed within a disk drive and used for storing computer data. Hard disks offer more storage and quicker access. to data than floppy disks do.

Hardware: Any physical object that is part of a computer system, such as a computer, its components and other associated equipment.

Information superhighway: The global information and communications network that will, in theory, link users worldwide through fiber optics.

Modem (modulator-demodulator): A device that converts data from digital signals to analog signals and vice versa, so that computers can communicate over telephone lines.

Multimedia: The combined use of text, graphics, video and sound on a computer system.

Operating System: Software such as DOS, Windows NT, Mac or UNIX a computer uses to direct the internal flow of data to and from memory, processor, printers, etc.

RAM (random access memory): The main memory of a computer. Because RAM allows random access, the central processing unit can access data quickly. Memory is measured in megabytes.

ROM (read only memory): Memory consisting of chips that store data that cannot be changed, expanded or erased and was installed when the chips were manufactured. This memory is not lost when the system is turned off.

Software: The programs, programming languages and data that control the functioning of the hardware and direct its operations.

World Wide Web: The popular multimedia branch of the Internet that can be accessed through browsers.

URL (universal resource locator): The specific address or identifier of a file or Web page on the Internet, i.e., http://www.blackenterprise.com

For more definitions check the Dictionary of Computer Words: An A to Z Guide to Today's Computers, Houghton Mifflin; $11.95