Internet Marketing, Business Models, and Public Policy

The authors examine the role of the Internet in marketing in the context of business models that are economically viable. This examination raises questions regarding the degree to which the Internet is genuinely different and whether it will be a boon to consumers and investors. Economic necessity associated with the need to obtain and maintain profit streams suggests that Internet markets will likely be more similar to than different from traditional markets. The authors challenge assumptions regarding the role of the Internet in creating frictionless markets that benefit consumers and the role of personal information and privacy on the Internet that are necessary conditions for potentially profitable business models. The authors also discuss subsidization of Internet businesses in the context of public policy and examine other issues related to the relationship of current models of Internet business to public policy and consumer welfare.