For most entrepreneurs, it doesn’t make sense to establish a Web site on their own computer system. The cost of putting in place a high-speed connection to the Internet in order to make the site available to the world can far exceed the relatively minor cost of locating it on someone else’s computer.

It’s also better that experts who know the technology are responsible for ensuring that the site is available 24 hours a day, seven days a week.

Internet service providers (ISPs) have long been a good choice for Web site hosting. They should have the experience, skills, support systems and infrastructure to ensure that the site is available on a consist basis.

Yet many alternatives to traditional ISPs are now emerging, with a variety of companies hosting Web sites. One example is NetNation Canada (http://www.netnation.ca), a subsidiary of a U.S. organization that focuses on this opportunity as its primary business.

NetNation services range from a basic Web site for a fee of $10.50 a month, to a “power site” of up to 100 megabytes in size for $65. Both options specify a maximum amount of Web traffic appropriate to their size — exceed this limit, and you pay an additional charge of a few pennies a megabyte. But in many cases, your site would have to be huge and extremely busy to exceed the limits.

In going after the Web hosting niche, NetNation offers a number of supplementary services, such as full-fledged on-line stores using a variety of technologies, a choice of operating systems to host your store and Real G2 servers for audio and video elements. This allows you to take advantage of many other specialized capabilities in the creation of your site.

As an alternative to hosting your site on someone else’s computer, you can still choose to use your own — simply place it at a company such as NetNation Canada or NetCom Canada. The “server co-location” services offered by these companies allow you to install your own computer hardware at their location.

They are then responsible for providing a link from your computer to the Internet, and for ensuring that your computer and Web site are accessible at all times. In other words, you use your own technology but take advantage of someone else’s high-speed Internet connectivity and expertise. Have a look at the NetCom Canada co-location site (www.nbc.netcom.ca/cbc/co-locate.html), which lists some of its benefits.

Finally, keep an eye out for new and innovative methods of hosting a Web site, such as the services offered by a U.S. company called Rackspace (http://www.rackspace.com).

You can visit its site, fill out a form specifying the type of computer you need for your site, the type of operating system you want and the bandwidth you require. It will quickly set you up with a dedicated computer and Internet connection for a monthly lease fee.

Services such as these provide the flexibility of having your own system with the best possible type of Internet connection.

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Here’s the short answer: Online.

Already squeezed by the commission-slashing major airlines, the conventional travel agent of 1999 is locked into market-share combat with the Internet. Buoyed by the popularity of discount-fare sites such as Priceline.com (see “Will Priceline.com Fly?” Premiere issue, p86), a few well-funded Net travel businesses, and airline-owned Websites, online leisure-travel bookings surged to $2.1 billion in 1998, up from $911 million in 1997 and $274 million in 1996, according to Jupiter Communications.

Jupiter’s findings don’t suggest that the Web is exactly storming the airline travel business by itself. Overall travel expenditures in the United States ran more than $500 billion in 1998, according to the Travel Industry Association of America. That figure makes the Internet’s current $2.1 billion share a mere drop in the travel-market monsoon. Travel agents themselves booked $126 billion in 1997, according to Travel Weekly.

Still, signs are emerging that some of Main Street’s travel slouches are tagged for demise as the Web opens access to information, displaces less-informed travel representatives, and secures reservations with a click.
Online ticket buyers
According to Jupiter Communications, by 2002, airlines will ring up 62 percent of online travel bookings. That stands in stark contrast to conventional ticket sales, of which airlines only control 15 to 20 percent.

Compounding the situation, aggressive Web campaigns and tough online commission policies by the airlines are making life doubly difficult for those Net-minded agents who dare to enter cyberspace. Online ticket buyers are spending more money on sites run by Delta Air Lines, American Airlines, United Airlines, US Airways, and others than they are with agents, according to Jupiter, and Net-smart suppliers in air travel seem determined to recapture some sales-channel control from the middlemen, whether they’re online or not. In January, Delta began levying $2 surcharges on round trips booked through any means other than its own Website.

“There will always be good travel agents, but the average agent doesn’t have much of a career,” says agent Nancy Zebrick, who in 1997 shuttered her storefront travel agency in Cherry Hill, N.J., to go strictly online. Zebrick moved into cheaper office space, added telemarketers to her mix, and started fulfilling requests via email, phone, and fax. Sales rocketed to $5 million in 1998, up from $1.8 million in 1997. She even made $375,000 in commissions. In comparison, the bigger online agencies, such as Microsoft’s Expedia, Sabre’s Travelocity, and the publicly held Preview Travel, are all losing money. (Microsoft and Sabre decline to break out the losses, and for the nine months ending Sept. 30, 1998, Preview reported a net loss of $14.4 million.) Priceline.com has also yet to see profits take off, as it heaps much of its $100 million in venture funds into advertising campaigns.

If Zebrick presents a model for switching from Main Street to cyberspace, she also serves as a reminder that free-falling airline commissions are causing just as much pain for online agencies as they are for their storefront counterparts, if not more. Like them, Zebrick is cutting back on unprofitable airline ticketing and is instead emphasizing more lucrative, higher-commission travel products such as honeymoons, spa trips, cruises, and vacation packages.

Commission free fall

Airlines began slashing fare commissions in 1995, when they imposed a $50 cap on the existing 10 percent commissions that they paid for domestic round-trip flights. Suddenly, any flight more than $500 earned agents only $50. In 1997, commissions fell again, from 10 percent to 8 percent.

“That was a killer, because that was a 20 percent reduction in income,” recalls Michael Pingrey, general manager of ACT Travel, a corporate travel agency in Washington, D.C. Things worsened again last fall, when airlines imposed $100 caps on round-trip international flights, which previously carried no caps.
Revenues
The percentage declined to 56 percent in 1997, compared to 61 percent in 1995, trade newspaper Travel Weekly reports.

These cuts stung sharply because agents have historically collected the majority of their revenues from ticketing. Ultimately, it has forced many conventional agents to start charging service fees; Travel Weekly reports that 42 percent of travel agents charged fees in 1997, and of those who did not, 54 percent said they would soon

Thank to the calling cards, you may save fund, as you can simply track your balance.

In a world evolving so quickly, I’ve got to find instant information relevant to any topic, issue, company, person or industry I might be dealing with.

Over the years, I’ve found two powerful ways of managing the information in my working life.

The first involves a little known but fabulously powerful software program; the second involves some sweat.

For years, I’ve been a huge fan of askSam, which might best be characterized as an information management program (http://www.asksam.com ). The company has recently released a new version (askSam 4.0) that is extremely fast and has loads of new features.

Basically, I feed into askSam much of the electronic information that I generate and collect. The best example is e-mail — askSam lets me instantly find any e-mail message that I might have sent or received since 1984. That’s right, some 16 years of stuff.

It makes for a very powerful and useful tool. If someone calls me on a business issue, I can quickly browse through any communications I might have had with them to get up to date. AskSam works with e-mail from many popular programs such as Microsoft OutLook, Eudora and others.

But it isn’t restricted to e-mail — you can create an askSam data base of your other electronic documents. I’ve used it to create a searchable index of almost every word processing document I’ve prepared in the last 10 years. Chances are if I am working on a project, I’ll remember earlier material related to the issue, and I can quickly locate it.

So how can you keep up to date with new information? That’s where the sweat comes in. It’s the season of resolutions, and many people are deciding to deal with the results of Christmas dining excess. If you’re in that boat, there is an opportunity to combine a fitness program with on-line information.

I began using an exercise bike on a regular basis about five years ago. From the first day, I found the process to be extremely boring — so boring that I couldn’t stay on it for long. Then I set up a PC and monitor near the bike, and built a little table over the handlebars for a keyboard and mouse.

I can now work away for an hour or more, and plow through several dozen information Web sites on the issues that are important to me — and barely notice the time go by. I’m achieving two goals — getting a good workout, and keeping myself informed on matters important to my business.

But while I was creating my own Internet-equipped exercise equipment, a revolution in the world of health clubs was underway. Anyone who regularly works out at a club has observed that plenty of exercise equipment is becoming linked to the Internet.

Perhaps the best example is Netpulse, which boasts that it has the “world’s largest Internet media network serving upscale, active-lifestyle consumers.”

The company makes a wide variety of high-end exercise equipment, and outfits it with everything you need to keep engrossed while working out. You can surf the Web, send and receive e-mail, or watch TV. Rather than selling it to individual consumers, the company seeks to market it to health clubs across North America.

For couch potatoes everywhere, there might be hope yet, whether they choose to work out in their home or in the comfort of a high-end health club.

Thank to help of our online store, you easily, quickly find reliable, convenient, economical manner to make a worldwide call. Call cards – they are a real godsend for those who go on frequent and important trips.

All I needed to get to work and gain access to my home network and the Internet was my laptop.

No wires, no fuss, no muss.

It’s a way of responding to the people who took exception to last week’s column, which suggested that you consider wiring your home with a local area network (LAN). They weren’t quibbling with the idea of home-based LANs — after all, many of us want to be able link our various personal computers at home. But they took issue with suggesting a technology based on wires.

Wires have almost become retro, as companies such as 3Com and Apple provide homes and offices with a very uncomplicated way of linking different computers without wires.

There’s no doubt that wireless technology for LANs is going to be a fast-growing market. Consulting company Frost & Sullivan, based in Mountain View, Calif., suggests that by 2011, the wireless market will be worth $884-million (U.S.), and will experience a torrid annual growth rate of more than 100 per cent.

But the technology is already here, and it works extremely well. In my case, it was simple to install a wireless LAN, using the new 3Com AirConnect product. I simply took the “base station” — think of it as a transmitter — and lugged it into my existing wired-home network to link to my other computers and the Internet.

I placed it up high on a shelf on my main floor so that it had good transmission capabilities. I then installed an AirConnect wireless card into my laptop, did a little bit of configuration, and walked out the back door to the pool.

Wireless LAN technology lets me tap into my home network from within a few hundred feet of my home, and from there, gain access to my high-speed Internet connection — all at speeds equal to what I’m getting on my traditional home-based LAN.

So although the previous column suggested you consider building a home-based local area network using traditional Ethernet wiring, you should keep a wireless LAN in mind as a worthy alternative.

Keep in mind that you will pay a bit of a premium compared with the wired solution, but I’d expect the cost to drop as new technology hits the market.

If you want to understand where this important technology is going, visit the home of what has come to be known as the “Wi-FI standard.”

In a nutshell, technology companies have come to agree on methods by which different wireless LAN products can work together. In the not-too-distant future, you might be able to buy a base station from one vendor, and link into it using a network card from another vendor.

This fact alone will help to drive down prices, and make wireless technology that much more of a worthy contender.

Of course, the estate-gift gap will be different at lower tax rates. Gregory Kolojeski, of Brentmark Software in Winter Park, Florida, is working on a program that will help compare these two taxes for different-size gifts and different brackets. But other things being equal–which they rarely are in estate planning–gifts are more tax efficient than bequests.

Dadakis and Jones have also challenged another piece of conventional wisdom: that cash is the only suitable gift for family members or other taxable entities. Many affluent Americans hold much of their wealth in common stock and other appreciated assets, which often have low cost bases and thus high potential capital-gains liabilities.

When an asset is given away, it retains the cash basis of the donor. But when it is inherited, it receives a step-up in basis to the current market value. So the traditional advice has been: Hold the stock, and leave it to your heirs in your will.

Suppose Dad has $1 million worth of stock for which he paid nothing. His basis is zero. If he gives it to his son, Jerry, Jerry’s basis is also zero. When Jerry sells it, he owes capital-gains tax on $1 million. But if Jerry inherits the shares, his basis is stepped up to the current market value of $1 million. He can then sell it for $1 million and owe no tax.

In the past, that has seemed a compelling argument for leaving appreciated assets in an estate. Now, though, experts like Dadakis and Jones argue that the cut in the capital-gains tax has changed the equation. It may not make it more advantageous to give securities than cash, but it reduces the difference significantly.

“Let’s go to the extreme example and say I have an asset with zero basis,” Jones says. “So the child will pay 20 percent in capital-gains tax. But I saved 20 percent right out of the starting gate because the tax rate went from [the estate rate of] 55 percent to [the effective gift rate of] 35 percent. So I have nowhere to go but up. And now all the future value is out of my estate.”

Dadakis agrees emphatically and, to prove his point, goes back to that $1 million, taxable at the highest 55 percent rate, that Dad wants to give Jerry. Assuming that the new combined state and federal capital-gains tax is 24.138 percent, versus the old figure of 32.142 percent, and that the value of the stock does not change for three years (to account for the required three-year holding period), here are the alternatives:

Dad does nothing, and Jerry inherits the money, netting $450,000. Dad gives Jerry $1 million in cash, for an after-tax gift of $645,000. Or Dad gives Jerry the million in stock, paying a gift tax of $304,000, which becomes its new basis. Under the old capital-gains rates, Jerry nets $472,000; with the new rate, the net is $517,000.

Dadakis also looked at how the alternatives would play out a decade later, assuming 10 percent growth on the money. Jerry still gets most if Dad leaves him cash: $1,424,840. But with the gift of appreciated stock, he has a not inconsiderable $1,218,254. And Dadakis is assuming a worst-case scenario–that the stock has zero basis. If instead the basis were, say, $250,000, the numbers would change substantially. “People are always looking for an arbitrage,” Dadakis says. “The biggest arbitrage we’ve got is the difference in tax rates here. The numbers are jumping right off the table at me.

The act’s income tax sections, which received most of the press coverage, give high-income earners little to cheer about: The much-touted education credits and retirement-savings provisions phase out long before they reach the upper brackets. Taxpayers in those rarefied strata find their rewards in the capital-gains rate cut–from 28 percent to 20 percent–and a few nuggets in the estate-planning area. Together, these changes make it more attractive than ever to give early and to make gifts of assets rather than just cash.

Current law allows each person to pass on a total of $600,000 during his or her lifetime or at death without paying gift or estate taxes. Taxes start at 37 percent on the first dollar above that amount, rising to 55 percent for anything over $3 million. The new law gradually increases the exclusion from $600,000 to $1 million by the year 2006. It also provides an exclusion of $1.3 million–effective January 1, 1998–for transfers of family-owned businesses to qualified heirs, but this provision inspires little enthusiasm among estate-planning experts. They point out that it will be worth only an added $300,000 once the $1 million exclusion is fully phased in and that, moreover, it is hedged with restrictions and conditions: The family business must account for 50 percent of your estate (a calculation the law makes quite complex), and your heirs must hold the business for 10 years or the money is swept back into your estate, making it subject to tax.

The 1997 act also gives a small boost to the annual tax-free gift allowance, though not right away. Currently, you’re permitted to give as many people or entities as you wish $10,000 a year each without reducing your lifetime exclusion. Under the act, the $10,000 figure is scheduled to rise with inflation beginning in 1999.

The annual gift is a good conduit for moving a great deal of money (not to mention growth on that money) out of your estate tax-free. You and your spouse together can give $20,000 to each of your children and another $20,000 to each of their spouses and your grandchildren. The gift can be as simple as funding for a young child’s college account or as complex as conferring shares in a limited partnership, to transfer the value of the family business. These shares may be given at a discount if they represent a minority stake. In this case, the IRS regards the whole as worth more than the sum of its parts. A 15 percent share in a partnership, for example, might be valued for gift purposes at $10,000, because it is considered illiquid.

Estate experts always advise clients to make the most of the annual-gift provision. The theory is much the same as with contributions to an IRA: If you don’t use it by year-end, you lose it. But some experts go further, recommending that people with large estates give away more than they’re allowed under the annual–or even the lifetime–exclusion. “This is counterintuitive to many estate planners,” says John Dadakis, a partner at Rogers & Wells, in New York. “We used to say, ‘defer, defer, defer.’ But now I’m starting to tell my clients: ‘If you don’t need an asset, give it away now.’ “

Why go against the conventional wisdom that, when it comes to incurring a tax liability, later is better? Because the gift tax is almost always less than the estate tax. The rates are the same, but the way they’re applied is different. Michael Jones, a certified public accountant in Minneapolis who specializes in estate planning, explains it this way: The estate tax is inclusive, which means you pay on the entire amount of the legacy, including the sum you lose through the tax itself; in other words, you pay tax on the tax. The gift tax, on the other hand, is exclusive; it applies only to what you actually receive: the amount of the gift minus the amount of the tax. As a result, the effective federal rate on the largest gifts would be about 35.5 percent, compared with 55 percent for bequests.

The list of failed predictions goes on an on. The fact is, making predictions is very difficult. Even the most brilliant people don’t always succeed: in 1932, Albert Einstein stated that “there is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.”

Today

Today, we are surrounded by predictions about the century and millennium to come.

Read a newspaper, open a magazine, watch TV or attend a conference, and you’ll be inundated with material from experts who purport to tell you what will happen in the 21st century.

By fall of this year, the millennium-prediction industry was in high gear. Business Week headlined a “A Look At Things To Come,” with “21 Ideas for the 21st Century.” AsiaWeek featured “Countdown: Twenty Trends Recasting Asia,” while Newsday published “21 Inventions for the Next Century.” The Los Angeles Times weighed in with its “Special Millennium Issue,” including a piece entitled “Get Ready for the 21st Century …”

Maclean’s ran it own “Peering into the future” article, in which it tracked “the trends that will mark the closing months of the millennium.” At least it had the humility to note that “divining the future is tricky at the best of times….”

Tomorrow

What can we learn from the fact that our past is sprinkled with so many incorrect predictions?

It is this: we should be wary of many predictions, and take them with a grain of salt. We need to approach them with a sense of judicious, cautious scepticism, in which we seek further, supporting evidence (from other sources) for any statement being made.

Most important, we should analyze each prediction in light of the affiliations and interests of the person who is making it.

Does this mean we shouldn’t listen to what is being said? Not at all: it seems to be a basic human trait to want to know what will happen next.

It’s just that we need to develop an ability to carefully and critically assess all the predictions that come our way.

Charles Franklin Kettering once suggested that “we should all be concerned about the future because we will have to spend the rest of our lives there.” Rightly so – but let’s also be cautious.

We are in the last month of the last year of the last century of an entire millennium – and we are surrounded by predictions.
Should you believe them?

Maybe not: you might instead heed the words of poet Jack Barron, who stated (in translation) that “the trouble with our times is that the future is not what it used to be.”

In other words, humankind doesn’t have a great track record in predicting the future.

Yesterday

Consider, for example, the 1858 prediction that residents of London, England would face a very serious problem within 100 years, because most of the city would be buried six feet deep in horse manure! Of course, we now know that this was quite wrong, and we can chuckle at the folly of the man who uttered those words.

Yet we can also learn from his error, by understanding how he came to be so far off the mark. He had looked at the population growth rate of the city and factored in the bathroom habits of horses. The conclusion seemed obvious – at least, as long as no one considered the possibility that horses might be replaced as the primary means of transportation.

There are different categories of incorrect predictions. First come the ones made by people like the gentleman in the example above, who are convinced that the world around them isn’t going to change, or, if it does, that new inventions won’t have much impact.

Take the memo circulated within Western Union in 1876, stating that the “telephone has too many shortcomings to be seriously considered as a means of communication.”

Or the 1889 statement by British scientist William Thomson (Lord Kelvin) that “Heavier-than-airflying machines are impossible. X-rays will prove to be a hoax.” Or the Boeing engineer who commented, after the first flight of the 267 (with a passenger capacity of 10 people), that “there will never be a bigger plane built.”

And then there was an inventor called Lee De Forest, who suggested that “while theoretically and technically television may be feasible, commercially and financially it is an impossibility.”

Perhaps the most boneheaded prediction of this type was made in 1946 by Darryl F. Zanuck, then head of 20th Century-Fox Studios, who stated that TV “won’t be able to hold onto any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”

The second category of erroneous predictions contains the statements made by people who are convinced that the world about them — far from never changing — will change totally. As a result, their predictions are so fantastic that they don’t come true.

In 1955, the New York Times quoted one individual who suggested that nuclear powered vacuum cleaners would be available within 10 years. In the 1950s, a Newsweek article about the home of the future featured a housewife taking an ultrasonic shower – sound waves did the cleaning! It also suggested that there would soon be a machine that would automatically make beds.

The third category consists of what we might call “replacement predictions,” in which it is assumed that a new technology will simply replace something else.

Back in the 1800s and early 1900s, experts suggested that photography would replace painting, since the quality would be so much better. When television came out in the 1950s, many predicted that it would spell doom for the radio industry. In the 1970s, VCRs were going to make movies theatres obsolete. Just a few years ago, people were suggesting that the Internet would replace
newspapers.

“For years, men have used the good-old-boy network,” says Deborah Temples, partner in an all-female law firm and president of Atlanta Women in International Trade. “It’s worked for them. This is our answer.” Her group has grown to some 200 members, all coming in with the mission of enhancing women’s careers in trade.

Ali Lassen’s Leads Clubs, founded in California by a single-mother-turned-entrepreneur, takes a direct approach. Every week, club members meet to promote their businesses and actively seek referrals from each other.

“There are lots of people who do marketing and advertising,” says Garold Raimond of Baron Limen Marketing in Marietta, Ga., who won a contract for a $1,000 monthly retainer through an Ali Lassen Leads Club referral. “What makes a difference is when someone can provide a recommendation — such as ‘I know her. I know the kind of work she does.’”

Networking can be as informal as a periodic lunch date with former associates, each bringing a new acquaintance. Above all, think of this as a courtship, not a one-night stand. You’re trying to build relationships.

Able to be purchased almost anywhere, prepaid calling cards are extremely common. Many retailers sell them, including gas stations, drugstores, and convenience stores. A lot people make an error of buying a card that has the cheapest call rate, however they might have to pay a higher price when all of the other important issues are taken into consideration.

The costs and available services for prepaid calling cards vary greatly. This is why it is vital for buyers to collect all the relevant facts, so they will spend the lowest amount of cash and don’t compromise any necessary aspects. The tips that follow are for the selection and use of prepaid calling cards.

Before you purchase a prepaid calling card, shop around some and compare features. Don’t just grab the first prepaid calling card that you see. Try to look at as many prepaid credit cards that are available through the various telephone companies and compare how much they cost, what other fees might be involved, and the terms of usage. It might be enticing to accept a card with the cheapest rates, but don’t buy it until your have further investigated.

The calling rates per minute along with their advertisements are predominantly advertised on the cards. Other items such as charges for call connections and terms of use are not mentioned so enthusiastically. But the second step is to look at the tiny print, which typically is a surprise. Since when you begin to make calls with the supposedly cheap prepaid calling card, you may discover that the connection fees are very high, and you have to spend more money to make a call later on.

The trouble is that the business makes up for the loss by raising the connection fees, although the rate is less for each minute. This can be very expensive for making mostly short calls. Although you might be charged a few cents a minute for the phone call, the fees to be connected is typically in dollars. The charge you have to pay each time you place a call is the connection charge, and does vary a bit according to the plan.

For those who want to make mainly shorter phone calls, it is better to buy a card that either does not include a connection charge, or is very low but will usually carry a somewhat higher rate per minute. So you should make a reasonable comparison with the prepaid cards that are available considering the plan and length of the calls that you will make. And don’t forget about the long distance fees as well as the international calls fees since they will typically be more expensive.

Some prepaid calling cards have fees as much as $3 for any international call you make. As well as the fees previously mentioned, additional hidden fees such as taxes, rounding and maintenance might also apply. As an illustration, if the card rounds up to 5 minutes, then the price will be charged for 5 minutes in spite of the fact that your conversation only lasted for 2 minutes. These types of hidden charges are overlooked by most people, and they pay more in the end.

The increments of billing for every card is another factor that is important to look at. You should learn what the billing fees are for the available cards. Be aware that billing increments may charge you for time you didn’t actually use; for example, if your increments are three minutes and you talk for four, you will be charged for six minutes total. When you have reasonable billing increments you can spend a lot less money.

An additional issue you have to think about is that a fee is charged if you use a pay phone to make a call. This fee is controlled by the FCC, however it can also be different depending on the company. Various fees might apply when you use a cell phone and a prepaid calling card together. In addition you should become knowledgeable as to whether a card can be recharged. Dependent upon your needs, you need to shop wisely for a prepaid credit card.