There have, of course, been failures. IBM’s World Avenue Mall was probably launched too early, before online usage became sufficiently popular to justify IBM’s investment in that project. Merchants particpating in the World Avenue Mall also complained that IBM did not adequately promote the project. IBM claims it learned another valuable lesson from the project -- that IBM’s name alone is not sufficient to bring enough customer traffic to the site to make it a success. MCI’s 1-800 Music Now, which permitted both telephone and online ordering of CD’s, shut down in December 1996, only one year after it was launched. That failure was attributed in the press to a variety of factors, including: (i) weakness in the music industry that year, leading to deep discounting by retailers; (ii) the site was not easy to use; consumers seemed to prefer ordering through traditional stores; and (iii) its prices were relatively high, compared once again to traditional stores.

Certain anticipated technological breakthroughs will make e-commerce easier and more accessible to larger audiences. Increased use of digital certificates will make it easier for vendors to confirm that identity of customers. Higher capacity media for video and audio recordings will allow end-users to order and receive entire albums and movies on a single disk. Faster Internet access through cable TV wiring will permit an end-user to download those albums and movies in only fraction of the time it takes now through conventional telephone wiring.

Not surprisingly, there are also problems or "bumps in the road" which may slow down the growth of e-commerce. The U.S. Federal Communications Commission may permit telephone companies to charge special rates for accessing the Internet. U.S. state governments continue to try to collect sales and use taxes on transactions consummated over the Internet. Some traditional "brick-and-mortar" stores are feeling threatened by Internet-only retailers, and are pressuring major manufacturers to stop selling through that channel. Some efforts to increase security (e.g., Intel’s new Pentium III processor use of a different serial number for each computer) have been quickly withdrawn when faced by concerns about privacy rights.

It is the handling of privacy issues that may, in the end, prove to be the most difficult "bump in the road" for e-commerce to overcome. The European Union’s Data Privacy Directive imposes rules concerning: (i) the gathering of data, (ii) the conditions under which that data can be used, (iii) access to that data, and the ability to correct information; and (iv) time limitations on how long data can be kept. Unless the United States adopts a comparable regulatory scheme, the European Union countries will be prohibited from transmitting personal information to the United States. Making matters worse, U.S. companies have, so far, been lax in protecting privacy rights.

"Cookies" have also become controversial. Cookies were originally designed to leave information about the user on the user’s computer, so that when the user returns to a particular web site, the site will search for the cookie, identify the user and immediately allow that user to use the site, without entering any passwords. However, to the extent that cookies are doing more, they have been dubbed as "Cookie Monsters." Some sites are currently using cookies to determine what portions of the page were previously visited by the user, and then to take the user to the page where it left off. Perhaps most alarming, cookies give the web site the ability to direct specific advertisements to users, based on a profile developed from their use of the site.

However, most consumers do not seem to be troubled about the threat to their privacy. A recent New York company over free personal computers, in return for the user filling out a detailed questionnaire and then receiving advertisements directed to that user. The company offering 10,000 free computers on this basis received over 1.2 million calls during the first morning after this offer was announced.

Seven lessons that might be learned from the track record, so far, of e-commerce in the United States