One doesn't need to go to highly publicized web sites to find what you
want online. Usenet is a fun frontier to visit. My favorite mail reader
is Tin, discover your own.
kelly
from The Wall Street Journal
[Special Report -- Technology: Thinking About Tomorrow]
December 7, 1998 [Special Report -- Technology: Thinking About
Tomorrow]
Person to Person
Before Companies Ever Set Out on the Web, Before There Even Was a Web,
People Bought and Sold Stuff on the Net. They Still Do.
By JASON FRY
Ask most people what they know about electronic commerce, and the
first thing they'll mention is the rapid growth of online companies
such as Amazon.com Inc. Some might even mention the fevered efforts of
businesses to build intranets, extranets and other systems for their
corporate customers.
But there's another, much older variety of online sales that's also seeing
plenty of action. Call it person-to-person e-commerce: the multitude of
deals struck every day between individual Internet users for everything
from old baseball cards and vintage lunch boxes to unwanted stereo
equipment and the holiday season's hottest -- and least available --
toys. Whether on carefully regulated Web sites or rough-and-tumble
Internet bulletin boards, person-to-person commerce is thriving.
By allowing far-flung people to get together and make deals, says
Maria LaTour Kadison, an analyst at Forrester Research Inc.,
Cambridge, Mass., "the Internet allows a whole new form of shopping
that was cost-prohibitive before."
Dropping a Line
Most of the action in person-to-person commerce is taking place in one
of the oldest corners of the Internet: Usenet, a text-only section of
the Internet made up of newsgroups, which are electronic bulletin
boards organized by topic and subtopic. Ms. Kadison says Usenet "is
definitely a hot place online -- and exploding rapidly."
Usenet is more than a decade older than the World Wide Web -- it was
born in 1979, when a pair of Duke University graduate students thought
of a way to link up computers at Duke with machines at the University
of North Carolina so that Unix operating-system buffs could exchange
information. From there, a number of people tinkered with Usenet's
technical underpinnings, allowing the network to grow steadily until
it contained not only newsgroups about computer arcana but also
discussions of everything from science fiction to ruminations about
how networks would change society.
Commerce wasn't a stranger to that environment for very long. Mark
Horton, a Usenet veteran who was the co-creator of one of the earliest
upgrades of the software underpinning the system, recalls that the
first want ads appeared within weeks of Usenet's creation. Online
commerce grew quickly enough that in the early 1980s specialized
newsgroups such as net.forsale and net.wanted were formed -- a step
taken, Mr. Horton says, so that "the rest of the Net wouldn't be
bothered" with the individual users looking to buy, sell and find
things online.
Nowadays, things are a little looser. There are thousands upon
thousands of newsgroups containing millions of posted messages about
everything from Buddhism to baseball to "Star Trek" to strip clubs.
And, in many of them, people are buying and selling things.
If you can imagine it, odds are someone on Usenet is selling it. A
Mickey Mouse yellow plastic lunch box? No problem: There's one being
auctioned off on the newsgroup alt.disney, with bids starting at $5.
(Three bucks will get you in the running for a trio of 25-year-old
"Disney on Parade" Viewmaster reels.)
Maybe you collect, say, Kiss tickets. Drop by rec.music.artists. kiss,
and unused tickets from the band's 1996-97 tour are available. (No
price given.) How about a baseball signed by Enos Slaughter? One will
run you $25 on alt.sports.baseball.memorabilia.
Bigger-ticket items abound, too. Someone on alt.california has a 1989
Honda CRX available for $3,200. "RUNS/LOOKS GREAT," the note says.
It's difficult to put a dollar value on all that activity. Forrester
estimates that business-to-business e-commerce will total $43 billion
this year, with consumer e-commerce accounting for an additional $7.8
billion in sales. Ms. Kadison says her firm hasn't broken down its
figures to isolate person-to-person e-commerce, but says that it's
"certainly worth hundreds and hundreds of millions of dollars in
sales."
DejaNews Inc. (http://www.dejanews.com/), an Austin, Texas, company
that archives Usenet messages, offers a starting point for arriving at
an admittedly rough estimate. Guy Hoffman, the company's chief
executive, says that there were about 500,000 postings to "for-sale"
newsgroups in a six-week period this fall, with an average value of
$50 a transaction.
That would come to nearly $217 million in annual deals over the
for-sale newsgroups alone. But that figure comes with a number of
qualifications.
On the one hand, the number could be much higher: The for-sale groups
are only a fraction of the total number of groups where buying and
selling takes place. On the other hand, DejaNews has no idea what
percentage of the advertised deals were actually consummated -- buyers
and sellers nearly always get together via e-mail to hammer out
details.
Business and Flames
One thing is certain, though: New Internet users who have just gotten
used to sending a credit-card number to Amazon.com may find
person-to-person e-commerce a bit unnerving. Newsgroups are rowdy and
chaotic -- even the calmest "boards" routinely erupt into "flame wars"
in which participants battle by publicly posting points and
counterpoints until one side concedes or, more commonly, gives up the
fight in disgust.
So how does e-commerce flourish there? Because, ultimately, newsgroups
are fairly small places where reputations matter. And if there's
somebody online that can't be trusted -- well, that news will spread
pretty fast.
Usenet is arranged in hierarchies of newsgroups, with general
categories broken down into narrower subcategories. For example,
rec.sport is divided into 34 groups from rec.sport.archery to
rec.sport.waterski, and those groups are themselves subdivided -- a
WNBA fan would head to rec.sport.basketball.women, with a fan of the
European game heading for rec.sport.basketball.europe, so that they
don't have to pick through irrelevant posts.
As a result, the distinctions between groups get pretty fine: The
difference between rec.arts.sf.starwars.collecting.misc and
rec.arts.sf.starwars.collecting.vintage may seem arbitrary to an
outsider, but it's of considerable import to the regulars in those two
groups.
Such fine distinctions mean that many newsgroups are actually fairly
small communities, where the lions of the boards are well-known -- and
accorded great respect -- and newcomers must earn their place by
proving their mettle.
"One of the things that we've found is that in the most highly
trafficked groups, you've got between one and at most a dozen experts,
and hundreds of people interacting with those experts," says Mr.
Hoffman. "This is a highly manageable society."
Bad Reputation
In those little societies, bad news travels as quickly as in any
real-world small community. "Bad Trader Alerts" -- sometimes simply
called BTAs -- are common sights in most any newsgroup that sees a lot
of buying and selling. They spring up in the wake of deals gone bad --
when packages fail to arrive, checks bounce, or merchandise is
misrepresented.
In most cases, such alerts are followed up by an explanation --
whether angry or apologetic -- from the allegedly guilty party, with
other members of the group weighing in as witnesses or self-appointed
jurors. Often, the whole saga winds up days or weeks later with a note
from the plaintiff letting the group know that everything has been
resolved.
In theory, the Internet's bad traders should be able to operate with
impunity -- after all, switching e-mail addresses now takes just a few
mouse clicks. But surfers have another, powerful resource: Once
something is posted on a newsgroup, it's basically available forever,
thanks to DejaNews and other archives of newsgroup postings. Those
archives let Internet users slice and dice the millions of accumulated
postings any number of ways: They can search for every newsgroup
posting from a given e-mail address, for instance, or every posting
that includes a given name or phrase.
The system isn't perfect -- authors can remove their own postings from
DejaNews' archive -- but it's valuable nonetheless. Bad-trader alerts
routinely include the real name and address used by the transgressor;
that material is easily obtained and re-posted by subsequent
searchers, and thus becomes impossible for the guilty party to delete.
As a result, DejaNews has become a standard tool used by Usenet
veterans for checking on a trader's bona fides -- and traders know
that they have to keep their reputations clean if they are going to
conduct much repeat business online.
"The greatest thing about the newsgroups is the first time somebody
rips somebody off, it's published immediately," Mr. Hoffman says.
"Somebody can only rip somebody off once through the newsgroups -- if
you're smart enough."
Chaos at Bay
Of course, not everyone is a Usenet veteran or a DejaNews jock.
Online-auction sites, led by eBay Inc., of San Jose, Calif., have
thrived in part because they provide a more structured environment for
online buying and selling. Usenet sellers have been setting up online
auctions for years, but eBay and its competitors have done a lot to
streamline the process and limit human error, such as by automatically
taking care of bids.
At eBay, buyers and sellers both register, supplying e-mail addresses
and phone numbers (which can be obtained by other registered users) in
order to offer a lot for sale or bid on one. The range of items for
sale is just as large as it is on Usenet, but on eBay, sellers pay
eBay a small fee (between 25 cents and $2) to list an item, and then
pay a percentage of the price that the lot sells for.
EBay doesn't enforce the terms of a sale -- buyers and sellers can
back out, and problems occur. But, as with Usenet, reputations are
important: Besides forums where users can talk about experiences good
and bad, eBay gives each user a "feedback rating" -- a positive
comment adds a point to this rating, while a negative one subtracts a
point. (Each user's comments can only move this rating up or down by a
single point, however.) Get particularly good ratings and stars appear
by your user ID.
EBay also provides links to a number of tools for making online buying
and selling easier, from links to shipping companies' Web sites to
sites maintained by third-party escrow services and arbitration
services. The effect is to smooth some of the rough-and-tumble that
can accompany deals struck on Usenet.
The success of eBay hasn't been lost on DejaNews' Mr. Hoffman. He is
looking to capitalize on DejaNews' role as the leading Usenet archive
and offer services to make buying and selling easier. In the first
quarter of 1999, Mr. Hoffman says, DejaNews plans to unveil tools that
will allow posts to be archived with an indication that the item
offered in that post has been sold, and that will let the company
serve as a middleman for credit-card transactions -- welcome news for
online sellers who dislike waiting for money orders and wondering if
personal checks will clear.
"This is an opportunity that we're very much focused upon," Mr.
Hoffman says, adding that "Deja News is thinking very aggressively
about how to do that."
But Mr. Hoffman emphasizes that he only wants to smooth out some of
Usenet's bumps -- not change the process.
"The whole objective is to increase the efficiency of the market, to
enable the most commonly used form of currency in the world, and to
remove the diceyness or the unknown with respect to the transaction,"
he says. "But everything else remains the same -- and it remains the
same because it's been proven that it works."
--Mr. Fry is technology editor of The Wall Street Journal Interactive
Edition in New York.
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