E-Commerce Enters the Age of Reason

Although people can argue over how old the Internet is, if you say 1994 was the birth year, the Web is 7 years old. The age that everyone agrees is the Age of Reason.

When growing an emerging industry like e-commerce, some weeks are better than others. Yet the past few days have been really good.

For those who measure progress solely in dollars and cents, the news that Amazon.com (Nasdaq: AMZN) posted Q1 sales of US$700 million, a 22 percent increase, was heartening.

For those who measure the growth of the industry in numbers of people, there's more good news. Nielsen//NetRatings released results of a survey indicating that almost half of all American adults with Net access have bought something online.

Further, Nielsen reported that March 2001 was a stellar month for e-commerce, with consumers spending $3.5 billion online -- a more than one-third surge over April 2000.

But there have been other developments in e-commerce that may have more meaning in the long term. Electronic commerce has suddenly developed a conscience and decided to do the right thing.

Terms of Engagement

The first sign of maturity came when the U.S. Better Business Bureau said it will work in tandem with its European counterparts to develop standards of acceptable business practices for Web sites. The effort is aimed at protecting consumers who have expressed concerns about privacy, customer service, truth in advertising and other issues that often threaten to stunt the growth of e-commerce.

Online businesses that comply with the new code of conduct will be allowed to display a BBBOnLine Reliability Seal or "trustmark" on their sites. The BBB said that nearly 10,000 online businesses signed up in the two days since the announcement, signaling a profound commitment to quality and honesty.

Although some skeptics view the new system as little more than a symbolic move, there's muscle behind the symbol. Online sellers are growing up and starting to recognize that they have to do something to remedy public skepticism about buying online.

Too Legit To Quit

However, the BBBOnline trustmark program is only the beginning. E-commerce bad boy Napster has also taken a major step toward adulthood.

On the heels of a U.S. district court injunction ording the online music service to halt the free transfers of copyrighted files, Napster announced its intention to adopt new "fingerprinting" technology. The new system is supposed to filter copyrighted music from Napster's inventory.

The real significance of this effort is Napster's corporate shift toward fair business practices, and its acknowledgement of the power and clarity of U.S. copyright law.

If a company as rebellious and innovative as Napster can work within the letter of the law, merging new technology with the existing free enterprise system, the entire e-commerce sector gets a boost from the increase in credibility and consumer trust.

Meanwhile -- albeit, probably unintentionally -- the renegade file-swapping service has set an example for newcomers to Internet selling. The message? Artistic and intellectual property have value in the marketplace.

Saving Privacy

Just as regulatory agencies begin their work toward standardizing the conduct of e-commerce firms, and high-profile companies take steps in the protection of legal rights, the U.S. government has announced its own positive move.

This week, U.S. Attorney General John Ashcroft acknowledged that privacy is a central concern for e-businesses and individuals alike. Ashcroft announced the appointment of a new Internet privacy aide within the office of the Deputy Attorney General, who will be charged with the protection of consumer rights on the Net.

Other than customer service, no single issue has hampered the growth of online business more than public perception of Internet businesses compromising in the privacy of individuals.

While some naysayers will object to further involvement of the government in electronic commerce, if the new effort helps consumers feel more secure in their online experience, then everyone on the Internet will benefit.

Although new privacy aide's initial assignments will apparently be focused on the FBI's controversial "Carnivore" e-mail surveillance system, Ashcroft's decision signals the government's recognition of personal privacy online as an national priority.

Destiny's Child

Certainly, one good week in the new economy does not a full transition to honesty make, but taken together, the latest developments bring a new maturity and respect to e-business.

If anything has hampered the progress of the New Economy, it is the public's image of Internet commerce as untrustworthy and unsafe -- and a passing infantile fancy.

Those on the inside know it is none of the above, but the real job ahead of us is convincing consumers their dollars are well spent on the Internet and their lives will be enhanced by their participation.

What do you think? Let's talk about it.