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The Census Bureau thinks that for the 1st Quarter of 2006, total Retail sales were at 976,110 million dollars, of which e-commerce 25,218 million (or 2.58%, roughly).
Being the scientifically minded folks that they are, they also include a definition of what this e-commerce means, namely E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an Internet, extranet, Electronic Data Interchange (EDI) network, electronic mail, or other online system. Payment may or may not be made online. Clear enough. The pie is 25 billion and some change. This pie includes then, all sorts of things, from buyers of email-spam-viagra to victims of Nigerian scam letters. It also includes the sales made through websites. Put that down for a second, and let's look at something else. For one, there are about 210 or so million Americans on the Internet. For another, there's this very cool website which counts just how much you type/click a day. Let's see what they know. Project WhatPulse has 119,913 active members, which have typed 235,277,655,743 keys and have clicked 86,770,432,382 times. If we look in the Internet Archive, we see that the site was started April 2004. So, in the three years this site has been counting, 119,913 people clicked their mouse 86 billion times. If we sit down and do the math, it comes that each person generates an average of 20,100 mouse clicks each month. Of course, not all people registered from day one, if we look at traffic statistics, the site was born in 2004, nearly died end of 2005 and was reborn early 2006. Doing an graph-area interpolation, it'd come out we need to multiply that figure by a factor of 2.5 to get averages closer to reality, but we won't do that. So now, since there's 3 months in each quarter at the last census, and 200 or so million Americans on the Internet (so we lost 10M. a well), and since a sample of over 100,000 people averaged a little over 20,000 mouse clicks a month per capita, what's that mean ? It means that for the 1st quarter of 2006, Internet-surfing Americans have produced no less than 12,000,000,000,000, or 12 thousand billion mouse clicks, and quite possibly 2 or 3 times as much. Now, as the Bureau was saying, those clicks correspond to 25,218 million dollars in sales. Therefore, the value of one click on the Internet is no more than 0.002 dollars, or a fifth of a cent. That presuming, of course, that whatever is being sold has absolutely no cost, so the entire revenue generated can be used to pay for clicks (a more and more accurate presumption, on the Internet). And now, to the mystery. Google, the world's biggest mouseclick salesman, manages to get about half a dollar, or 50 cents, per click. When those clicks are worth, on their own, 0.2 cents, or 1/250 the price asked. At most, because it could well be closer to 1/1000. O no, wait. I just remembered. We're only counting Americans for some reason, what about all the Indians going to work every day, employed by bulk click sellers ? O. And also, didn't the money pie include email spam and everything else, not just website sales ? O boy. 1/2000 ? 1/5000 ? Anyone's guess, really. How does the magic work ? To understand that, let me explain modern banking. Bank A opens for business. Customer 1 comes in and deposits 1000$. Bank A issues customer 1 a certificate saying he owns $1000, deposited. Bank A then puts 150$ in a special reserve fund, and issues customer 2 850$ in credit. The money now in circulation is 1000$ in deposit certificates and 850$ in credit, so 1850$, instead of the original 1000$. This is the magic money-multiplication power of banks. If customer 2 goes and deposits his 850$ somewhere, and customer 1 goes somewhere and takes credit against his security, the "money" in circulation grows and grows and grows. The same thing happens with people on the Internet. Here, there exists one single bill, the click, and the total amount of money is called traffic. So, website A pays someone for 1000 clicks. Now it has traffic. Traffic is good. Website B wants some traffic. It proceeds to buy it from website A. And then proceeds to sell it to C. By the time this traffic actually gets put to some usefull work, it's been through so many channels it's dizzy. This speculation has nothing to do with economic reality, however, since adding middlemen isn't actually increasing the total of actual sales. The only thing it increases is the number of people who think "they got traffic" and are, obviously, "bloggers of authority". Now, of all the people caught in that rat race, some are doing better than others. The ones at the end of the pipe, where traffic "converts" are seeing some real money out of the entire thing, so they aren't doing all too bad. The people running the rat race, now they're raking it in. Yahoo made a lump of cash back in the day of the bubble, because every single start-up would go take real money from investors, and then dump as much as possible into Yahoo for "advertising". Whether the start-up floated or flopped, Yahoo got its tax, paid in real money. The same scheme works today for Google. Like with any pyramid scheme/faith based investing, the only people who aren't doing all too well are on one hand the ones caught in the middle, ie, just sold the house to buy Google ads, and the ones that don't know what's coming, and keep sticking all their profits back into the crucible. All this does not come without its generous icing of hysterical humour. Make sure you read all the self appointed experts who are "professionally" involved in maintaining a 20-page website, especially if it's dedicated to - you've guessed it - how to make money by maintaining a 20-page website. That would be their "business", and having a "business" is obviously making them "entrepreneurs", so they may as well make "contracts with themselves" to one day become pro-bloggers. And "authorities" in their "field". Don't quit your day jobs just yet boys. It's been the fate of all bubbles ever to sprout this sort of expert, living precariously on the two square inch foundation of "If you act like you belong there nobody will likely ask you to leave". Asking these idiots to leave may well become my purpose, at least for a little while. 14 authoritative blogging guru keynote speakers left already. What are you waiting for ? |
