Mon, 24 Feb 2003

End of the great Indonesian Internet age?

Vishnu K. Mahmud, Contributor, Jakarta

Four years ago, in the aftermath of the Asian economic crisis, a virtual industry exploded, promising to change the world.

With former U.S. vice president Al Gore's declaration of the so-called "information superhighway", the Internet was meant to make our lives easier. It was supposed to enhance communications, promote cultural exchanges and educate the masses. The "Worldwide Web" would eliminate middlemen and empower small mom-and-pop shops, turning their small neighborhood brick and mortar stores into virtual storefronts with global reach.

In Indonesia, the 'Net led to a "trickle-down" effect. Web- related businesses began to spring up, cyber cafes became commonplace, as did Internet portals, web-hosting services and data centers. Internet Service Providers (ISP) increased from fewer than half-a-dozen to over 50. Graphic designers, Web programmers, content providers, marketing agents and brand managers all had a field day, demanding huge salaries and getting them.

Now, in 2003, in the aftermath of the dot-com bust, the ruins of the Internet economy can easily be seen. Small Internet cafes are closing by the dozen, information technology-related businesses have been abandoned by the hundred and Internet companies are laying off people by the thousand. The busy cyber cafes now stand mostly empty while multiplayer game shops are only patronized by their most loyal customers.

It seems that people are no longer interested in getting "online" to chat with their friends, exchange e-mail or read the latest news. All the great stalwarts of the Indonesian Internet age, such as Astaga!, Lipposhop and Satunet are either gone or shells of what they once were.

Does this mean the great Indonesian Internet experience is all over? Actually, this is perhaps a good time to get into it.

Practically everyone who signed up to a dot-com-related company knew that the ride wouldn't last. At some point there was going to be a market correction that would bring some good sense into that insane world of IPOs, venture capital and millionaire shareholders.

We just hoped that we were on the top before the bottom fell out.

Now, the "Last Man Standing" principle is in effect. Whoever stands now has the possibility of becoming the leader (or perhaps sole survivor) in an industry that still has enormous potential: An industry that no one else wants to enter.

Those who have lived through this thrill ride are now older, wiser and more experienced. These are the type of people who embrace new technology and could lead Indonesia to rejoin the global race toward an information-based society, to complement the agriculture and manufacturing sectors that exist today.

Despite the rise in telephone and electricity costs, Indonesia still has a market for the Internet. Or perhaps more specifically, the "mobile 'Net". With a market saturation of cellular phones in Indonesia, it is only a matter of time before someone sets up a mobile "home page" filled with the latest content and entertaining games. It could be a medium for communicating news, market information, government policy and ads. All of which could bring in tons of revenue to the participating partners.

The market may be small compared with China or even Singapore, but the Indonesian "mindshare" does exist. It just has to be developed further. With the cost of cell phones and computers decreasing almost daily, more and more people can get online.

Like the previous dot-com revolution, this new medium can be used to teach, inform and entertain. The masses are now more open to the concept of paying for things that used to be free: It's just a matter of how much and with what.

Now is the moment to seize the opportunity to start a company with clear goals and revenue streams. With an army of former Web workers in this country, we can get the jump before one of the global conglomerates such as Yahoo! or Vivendi comes in. It could be a unique news site, an event-driven community program or a company that offers unique supporting services.

As with the Internet age, the IT-linked economy is vast. Establish a market base and develop it. Offer products and services within reasonable costs and continue to innovate. By the time others begin to take notice, you hopefully would have a six-month lead and what you do during this period would either make or break the company.

As with the end of any era, we can build a new structure on the foundations of the old. I wouldn't be surprised if Indonesia experiences an IT renaissance.