By Heather Green My mom, who runs a magazine in Virginia, was all excited about a speech a local businessman recently gave to the county chamber of commerce. Barry Schuler, CEO of America Online, the online-service arm of AOL Time Warner, laid out AOL's grand vision of being the digital heartbeat of a household. A magic combination of wireless, broadband, and networking technology would control and link every device in the home -- and deliver AOL Time Warner's music, movie, and online content.
People would wake up to an alarm clock programmed with music downloaded from AOL. And all the clocks in the house would be linked digitally and precisely set by AOL Time Warner via the Internet.
My mom had a couple of questions after being presented with this glimpse of the digital future, and because I cover technology, she thought I might be able to answer them. She knows why AOL Time Warner wants to keep pushing itself into her life -- and pocketbook. But why would she buy everything the media giant wants to sell her.
WARNING: LOW O.J. "I don't really need a computer to synch up all my clocks in the house," she says. "What if I want to set one clock to be five minutes fast? Would AOL let me do that? What is so great about all this?"
I stalled for a minute, but convinced she was just being closed-minded, I launched into a spirited defense of the future. It would be so much easier if AOL set her clocks, I told her, and having a computer wirelessly track what's in the refrigerator would mean never running out of orange juice again. Already, Microsoft's own Bill Gates has wearable electronic pins that let him change digital art and music in his home from across the room. Yet mid-ramble, I realized my mom had a point -- just because we can use technology doesn't mean we need to.
All too often, technology isn't applied to a real problem. It's just thrown at a supposed need. And not just any mundane need, but one that's affecting a mind-bogglingly large market. The urge to foist new technology (or new uses of existing technology) on people becomes more intense when adoption rates for a technology plateau. Internet usage is now at about 55% of Americans, and AOL's subscriber growth is slowing (see BW Online Special Report, "AOL Time Warner -- One Year After").
WHO NEEDS IT? So the online giant has to figure out new services that would get its current users to spend more time and money online and encourage others to sign up. And AOL needs to tie in the entertainment assets it acquired when it bought Time Warner. Voilà -- AOL's networked home.
The search for a breakout use for technology has plenty of other examples. Because data and telephone calls could be merged over wireless networks, suddenly the one thing that U.S. consumers absolutely were going to want, according to tech companies, was the wireless Web. They looked at how popular wireless data services were among consumers in Japan and thought the same thing would happen here. Who wouldn't want to get alerts zapped to their cell phone about special offers at the nearest Starbucks while walking down the street?
Who would? Unlike Japan, the U.S. has high PC Internet usage, and we're used to surfing the Web on big-screen monitors. But in the hype of the wireless Web two years ago, marketers and execs jumped right to the billions of dollars that could be made in getting people to browse the Web via a phone, looking up sports scores from ESPN.com or buying books from Amazon. In the U.S., the wireless Net might be best used for relatively humble -- but extremely useful -- messaging.
LESS TECHNO-CLUTTER. Still, the Net, home electronics, and digital technology are converging, but not in as grand a way as AOL envisions. Just take a look at Moxi Digital's new Media Center. It's a single device into which five different products are collapsed: DVD player, stereo, high-speed cable modem, digital satellite receiver, and personal video recorder. O.K., it won't synch your clocks or tell you when you're out of orange juice. But it will do something many consumers, or at least big tech adopters, will want: It'll let you get rid of some of those consumer electronics appliances in your living room.
That might not be enough for the companies that are desperately looking for the next big thing to jump-start the tech industry. No matter how much companies like AOL may want to create a major new market, consumers shouldn't be counted to provide it. Green covers e-commerce and the Internet for BusinessWeek in New York