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Friday, 20 July, 2001, 15:30 GMT 16:30 UK
Anatomy of a backlash 5
Hype's love affair with the internet, and the backlash which followed it, has been a remarkable period of recent history.

Yet all the time, internet usage figures have climbed regardless. This is the final instalment of five key moments in the shifting sands of opinion, by BBC News Online's Giles Wilson.

No. 5: Who has the last laugh?

Advert for the O'Neills pub chain, Jan-Feb 2001

Spring 2001

Hype turns its back

Dot.coms became a joke - at best. But as internet usage continued to rise, who was wise after the event?

Internet firms spent - and are still spending - a huge amount of money trying to get noticed.

In 2000, 293m was spent in the UK by dot.coms on TV, radio, press and poster adverts.

Before the year was out, the bell would toll for Dressmart, Boo, Clickmango, Boxman, CurrantBun, uTravel, Easier, Urbanfetch, Ready2, Worldsport, Foodoo, Wowgo and And many more besides.

To most of them it won't have mattered very much, because it wasn't actually their money - it had come from venture capitalists.

It became clear that people weren't getting what they were expecting from [the net].

Joe McGrath, O'Neills pub chain
As the founder of Kurt Andersen famously remarked that getting financial backing for a website during the boom was easier than "getting laid" in 1969.

But just as the media had been enthusiastic in hyping the internet, so it also made the most of the downturn which followed when dot.coms ran out of money to burn and venture capitalists realised they might have been overgenerous.

The O'Neills advert - which ran across the country in the run up to St Patrick's Day - is an extreme example of this realisation.

But its meaning is quite clear. Come and meet some real people down the pub; staying at home and using the internet is for losers.

Joe McGrath, marketing manager for the O'Neills pub chain, explains what led the company to choose the advert.

"The internet promised to deliver a lot. There almost seemed to be a mystery about it, and everything to do with it was 'cool'. But it became clear that people weren't getting what they were expecting from it."

Advert for Hyundai cars puts the boot in

The Hyundai advert (above) takes the thinking further. This car is fast, it says, and perhaps also sturdy and reliable and not a joke. Unlike this whole internet thing.

The examples may be trivial, but the impact of the backlash was certainly felt by dot.coms who were seeking new funding from investors. Even good ideas which may well have been viable were finding it hard to get backing. Dot.coms, after all, were a joke.

A study by Forrester Research found, for example, that the entire market in online health information in Europe had been stillborn because of the drying up of venture capital. American companies can turn to private investors, so called "business angels", for help, but Europeans do not have the same option.

The bright side

So where is there cause for optimism for the internet community?

A survey for Oftel last week found the following:

  • In May 2001, four out of 10 UK homes claimed to be connected to the internet. That's 10 million homes.
  • It means a growth of 3.75 million homes in the last 12 months. The speed of take-up has also increased.
  • Internet uptake is continuing to grow across all consumer groups, but it is especially strong with the young and the middle aged, higher income and large households.
  • It grew particularly quickly in the north of England.
  • Average weekly household time spent on-line rose to more than 7 hours.

    David Streek is design director of one of the UK's notable online successes, Deepend. The company, a new media design and creative agency, started in 1994 as three graduates working together in London. It now has offices worldwide.

    "Yes, there is a backlash against the web," he says. "But user numbers are still steadily increasing and so is advertising spend.

    "So what's going on? No-one wants to focus on the benefits, even though in many ways it still is the future of many businesses.

    "The problem is that proportionally, only a few companies have learnt how to get the best value from the net and understand not to expect it to be the answer to everything."

    The Oftel figures are backed up by these numbers from the Office of National Statistics.

    This chart shows that growth in the home internet market, regardless of people using the net at work, had risen by three times in just two years.

    Your comments:

    I think that a "number 6" will really change the way we use the net. The government needs to set up a national "pipe" that we can *all* tap into. This will mean public access internet devices everywhere. Look what happened on Waterloo Station in London when BT trialled free internet access - people were queuing several deep for most of the day to use the facility. Now that the free trial has finished they seem to be hardly used. This is one case where a public private sector *could* work, and it would truly guarantee access to all members of society.
    Peter Garner, England

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