THE WIRED INDEX
Before the public Internet, it was clear who controlled transactions executed over private voice and data networks. When you made a long distance call, it was AT&T. When you charged a purchase, it was Visa.
Today, when you buy a book from Amazon.com using a Discover card to rack up discounts on United Airlines tickets, control of course is distributed among several parties, each of whom has a claim to a piece of the action. Soon such transactions might also involve a hardware vendor, application developer, ISP, telco, bank, fraud detection service, and delivery partner – all demanding a cut.
Banks and phone companies aren't inclined to give up even a nanoslice. After all, they own the customer, a position they feel lets them dictate the terms – generally a per-transaction fee for them and a flat fee for everyone else. Thus, for the moment, WIRX companies like Vodafone, the world's largest wireless carrier, are in the driver's seat.
Still, distributing the take from each transaction to every party involved has an inexorable logic: It generates revenue at the same moment that the customer receives value. Should banks and telcos loosen their grip, First Data will be well positioned to muscle in, with Broadvision, i2, and Oracle close behind.
Down the food chain, just about every company that makes information technologies hopes to make money through transaction fees, including WIRX's Sony and Nokia. And don't forget DaimlerChrysler. What is a car, after all, but a mobile delivery device for downloading audio, games, and restaurant menus? The tussle over transaction fees will follow the Net wherever it goes.
– Phil Hood (phood@digital4sight.com)
INDEX PERFORMANCE (as of 9/1/00)
| Name| Since 11/30/95| Previous 12 mos.| YTD
| WIRX | +499.20 % | +61.58 % | +14.54 %
| Nasdaq Composite | +297.13 % | +53.55 % | +3.37 %
| Dow Jones Industrials | +121.01 % | +3.56 % | -2.45 %
The Wired Index tracks 40 public companies selected by editors of Wired to serve as a bellwether for the new economy. For a complete description and the latest results, see stocks.wired.com. Data courtesy Bloomberg Financial Markets.
| NEW MONEY
| Fee-For-All
