The failure of dot.com advertising shows importance of bringing in PR people who can think strategically, Ries says. "Strategy may not be strength of traditional PR firms. Many of them are totally focused on getting publicity in media. But getting coverage is not what it's about. They even measure value of a story by amount of money it would cost to advertise in comparable print inches or minutes of air time. That's ridiculous."

For example. Ries explains, introduction of New Coke is said to have gotten over a billion dollars worth of publicity but product was a complete failure. "The PR firm should have told them they were crazy to mess with formula for most successful soft drink in history. From a traditional PR point of view I'm sure it looked like a plum of a story, but strategically it was a disaster. The best strategists don't take what a client says they are going to do at face value. They question name, price, distribution, and slogan. The best PR strategists would have told them not to launch product."

Good strategy will give way to better business models that will change with times. Adapting to Internet age doesn't necessarily mean you need to launch a web site, Ries says, but you may need to change way you do business. He predicts it will be 50 years before full impact Internet-fueled change is fully understood.

BUSINESS MODELS MUST CHANGE Ries rails against bricks and mortar companies trying to become bricks and clicks companies. Putting an Outernet company online dilutes brand, he maintains, and that's a sure recipe for failure. A far better strategy for changing with times is to give online venture a new name or a new function.

For example, he says, Home Depot has a low price strategy in their stores. Their Internet strategy is to warn suppliers that if they catch them selling products on Internet they will drop them, Ries notes. "They're in a squeeze because suppliers could make more selling their products online."

In order for both Home Depot and its suppliers to thrive, Home Depot could shift its store strategy from price to a more service-oriented approach, perhaps giving classes in plumbing and carpentry. Then they could launch a web site under a different name, and suppliers would be able to sell to Home Depot and through their own Web Sites.

Low price is driver in Outernet, Ries maintains, but that will change. Research shows, he notes, that Number One reason people give for buying in retail stores is price. But Internet soon will offer best buys and Outernet will be forced to make great service its main selling strategy. There is a high end, but it's a tiny share of market.

"The Number One retailer in America is Wal-Mart. Their theme is 'we sell for less.' Because of Internet Wal-Mart could potentially be in trouble strategically. They have to move toward service because Internet companies will be able to sell same products for less money because as a result of their lower overhead."

INTERNET CAN'T PROVIDE A HAND SHAKE Observers say that many shoppers will use Internet for research but make their purchase at an Outernet store. Ries concurs. The consumer's ability to get instant price comparisons on Internet will force most Internet retailers to have a price orientation.

"If all you want is low price, you have to go to Internet. The Internet can't provide one thing that people still want: to touch and try product."

A recent study by London-based by Economist Intelligence Unit (EIU) drew same conclusion. It reported that instead of Internet crushing traditional dealerships, car buyers are likely use Web sites for finding information, but not for completing deals.

Projections were that 60 percent of car sales would be made over Internet by 2005, says Ian Robertson, director of EIU's automotive group. In reality, report shows people using Internet to gather information and intelligence on prices, but to conclude deal they are still searching for reassurance of that traditional handshake you can't find over Internet," Robertson told Reuters.

Some may insist that Internet businesses will provide low price, convenience and service. Others will note that trend toward one-hour delivery by companies like http://www.kozmo.com will add element of instant gratification now missing from online experience.

To those we say: Ignore Al Ries at your own peril.

However, with recent demise of so many dot.com players, pendulum is attempting to swing in other direction.

This week another major player has announced that their once free service will no longer be free as of August 6th. If you have a list hosted on ListBot, http://www.listbot.com/, you will either need to make new arrangements to get it hosted by someone else or get ready to hand over around $150 per year.

What was once free yesterday may no longer be free tomorrow.

Considering need to become profitable online, trend is understandable. However, these dot.coms that are charging fees must keep in mind free nature of Internet and not ignore fundamental nature of that concept.

Yahoo, http://www.yahoo.com/, is an excellent example of a dot.com that began to charge fees but not for it's core service of search engine directory use.

Yes, if you want preferential treatment in getting listed on Yahoo you need to hand them almost two hundred dollars for privilege.

And, yes, they are "selling" you something on every web page that comes up with results of your online search.

It pays bills and still allows them to keep their original service free.

A compromise must be reached otherwise those faltering dot.com's and any Johnny come lately will find that in order to keep good will of their customers and potential customers, they must be given an incentive merely to visit web site.

Otherwise they will look elsewhere to still find it free.