'Twas the season to make money Analysis/Commentary Despite the Luddites and nay-sayers, the Net performed smashingly this holiday season. For one thing, it didn't crash. (Thank goodness for small favors.) For another, Net-based businesses generally met, even exceeded profit goals. How did this come about? Was it really a miracle of technology? Hardly. The fact is, many traditional businesses made an effective leap into hypertext. The so-called brick-and-mortar retailers, based in three-dimensional space, proved that the I-economy wasn't headed for cyberspace without them. Many built up their server farms, drew up effective delivery contracts, beefed up their customer service staff, and calmly reaped a harvest. The slowpokes lost out -- the Wal-marts, Home Depots, and Best Buys -- according to analysts from Deloitte and Touche; the sellers that were ready outmaneuvered the pure-plays -- Web-only businesses. Exceptions were Amazon.com, AOL, and Yahoo! And although only 38 percent of the population was on-line, the consumers that were didn't balk at buying there. In urban areas, doorsteps lay cluttered with packages the week before Christmas, with Santa nowhere in sight. The triumph of commerce on the Web bodes well for the general acceptance of the Net as a medium of exchange and delivery. Consumers discover they can obtain what they want, with a minimum of effort, and within a reasonable delivery time. Why burn tires and gas? Better to let your fingers do the clicking. Electronics such as computers and DVDs came out on top this Christmas, as did toys. Shoppers found entertainment-oriented devices more tangible than food or clothes, but collectibles also did well. Some sites even discovered that they could trim costs by offering Internet-only merchandise, setting aside the expense of brand names. Yet, profit margins were a big worry -- with delivery expenses often absorbed by the seller and the price of infrastructure (servers, back ends, and fulfillment) exorbitant. Now, with the final tally in, big business braces for a time when selling on the Net will be business-as-usual: a tempo of competition that will heat up, leading to the dropout of many current success stories, and a time when consumption will truly become a calculus of convenience, a choice between shopping in two- and three-dimensional space. January 26, 2000