First the computer mouse, now the cat

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June 29, 2000
Web posted at: 8:30 a.m. EDT (1230 GMT)

by Nicholas G. Carr

(IDG) -- When you say the word "mouse," no one thinks of a small furry rodent anymore. If a startup named DigitalConvergence.com has its way, a similar thing may soon happen to the word "cat."

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The company is about to blanket the world with a little wand that plugs into your computer. You'll be able to use the device -- called a Kat -- to scan printed bar codes, which act as physical hyperlinks that automatically transport you to sites on the Internet.

DigitalConvergence hopes that the killer app for Kat will be advertising. Print publications, the thinking goes, will rush to adopt the technology as an enticement to advertisers. Ford, for example, could put a bar code in a magazine ad for the Explorer, allowing readers to easily get to a Web page that promotes the vehicle. Already, Forbes and Wired have announced plans to give away Kats to subscribers.

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But the real impact of Kats and similar devices goes far beyond print advertising. They are the tools that will accelerate the melding of the online and offline worlds. Yes, you'll be able to use the links to access marketing information, but you'll also be able to use them to reorder goods, buy spare parts, get content updates, register products, program VCRs and so on.

And when these devices go wireless, things will really start to get interesting. Shoppers will be able to scan product bar codes in stores to compare prices, read reviews and check for coupons. All retailing will become e-retailing.

The Simon Property Group, one of the country's biggest mall managers, is preparing for this future. It has set up an incubator to create products that bring the Internet into brick-and-mortar stores. One product it's testing is called FastFrog -- a wireless scanner geared toward teenagers. The company knows that kids spend lots of time in malls but tend not to buy much. With FastFrog, teens can scan bar codes as they walk through shops, creating personalized Web pages of favorite products. They can then e-mail wish lists to parents and other relatives.

A major battle over standards looms on the horizon. DigitalConvergence's business model is based on a proprietary system. It will give away the Kat and its software, but will charge companies to use its codes. Other firms, like Digimarc and GoCode, are developing their own coding schemes that they each hope will become the de facto standard.

The stakes are high. No one is going to want to own a bunch of different scanners that read only certain codes, so a universal standard will have to be established. One can only hope that it will not be a closed standard controlled by a single company. An open system, like the Universal Product Code that spurred the adoption of bar codes in the 1970s, will be the best way to promote this important new technology.

Whatever the outcome of the standards battle, companies need to start thinking creatively about how they're going to link their physical publications and products to the Internet. Functions like customer service, advertising and market research will almost certainly be shaken up. Web strategies that treat sites as self-contained documents will be upended. And as products become portals, a whole new range of business opportunities will open up.

In the end, a product's ability to link to the Internet may be as valuable as the product itself.

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