As Dave Winer noted yesterday, the New York Times published a story about how unsafe the Web is. The story was named "From Unseemly to Lowbrow, the Web's Real Money Is in the Gutter."
Coincidentally or not, the Cover Story of the last issue BusinessWeek talks about the same "dangers." But I had to wait until today for the story to be available online for free.
First, the introduction.
Warning: You are about to enter the dark side of the Internet. It's a place where crime is rampant and every twisted urge can be satisfied. Thousands of virtual streets are lined with casinos, porn shops, and drug dealers. Scam artists and terrorists skulk behind seemingly lawful Web sites. And cops wander through once in a while, mostly looking lost. It's the Strip in Las Vegas, the Red Light district in Amsterdam, and New York's Times Square at its worst, all rolled into one--and all easily accessible from your living room couch.
Now, some big numbers -- remember it's a business-oriented publication.
That has spawned a bustling Underground Web that's growing at an alarming rate. Black-market activity conducted online will reach an estimated $36.5 billion this year -- about the same as the $39.3 billion U.S. consumers will spend on the legitimate Internet this year, according to researcher comScore Media Metrix. Today, illegal online gambling is the eighth-largest business on the Internet.
Then, add a little touch of "philosophy."
The Underground Web, if unchecked, has the potential to undermine the values of society. It enables--even encourages--ordinary citizens to break the law. People who wouldn't even jaywalk find themselves bombarded with offers to place bets at offshore casinos or order drugs online. For many, the offers are hard to resist. There's no need for surreptitious rendezvous in back alleys. It's antiseptic crime.
And remember this is the Cover Story. So BusinessWeek explores several issues at length, discussing painful -- and even deadly -- real stories: gambling, drugs, child porn and money scams.
For this last issue, BusinessWeek gives another round of unconfirmable numbers.
BusinessWeek estimates that financial fraud on the Net costs businesses and consumers $22 billion annually, based on law-enforcement and analyst projections. Online identity theft led to losses of $12 billion last year, according to the Identity Theft Resource Center, a San Diego nonprofit group that helps victims. Meanwhile, the SEC prosecuted cases last year in which investors lost $1.5 billion from Internet stock-manipulation schemes. Since the government estimates that only 1 in 10 Web cases is reported, actual losses could easily top $10 billion.
You don't have enough? Read the full article. And please remember there is no irony on my side. I enjoy this magazine and I'm a long-time subscriber. But analysts' estimations are less and less credible.
Source: Ira Sager, Ben Elgin, Peter Elstrom, Faith Keenan, and Pallavi Gogoi, BusinessWeek, Sep. 2, 2002 Issue
5:57:50 PM
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