In 1996, Modahl was a VP at Forrester Research, the Cambridge, Mass., technology industry researcher, and Bezos was a nobody, at least in Internet circles. So she made him wait while she wrapped up another meeting. It wasn't until later during a presentation - where Bezos mesmerized her with his calculated approach to opening an online bookstore - that Modahl began to get the feeling the man could accomplish anything.

It's a nice tale, and a good example of one of the main points of Modahl's new book, Now or Never, which is that companies that want to win in the Internet Economy will do whatever it takes - whether it means startups spending gobs of cash like Amazon to acquire customers, back-end technology, and warehouses, or old-line businesses reinventing themselves to operate online.

The trouble is Modahl waits until the last three pages of a 218-page book to get to the Bezos story. In journalism, that's called burying the lead. To reach the tasty tidbits that fill the second half of the book, readers must wade through a first half that's written like, well, an industry research report.

For companies to best take advantage of the Internet Economy, Modahl posits, they need to understand who uses the Internet and where their existing customers fit in. So she spends the first part of the book outlining Forrester's method for studying people's attitudes about technology to determine who uses the Net. The firm has even coined a name for the approach: technographics.

According to Forrester, consumers either have positive or negative attitudes toward technology. People generally fall into one of three categories: "early adopters," "mainstream" or "laggards." Within each segment are groups whose differing needs drive how they will or won't use technology. In the early adopter segment, for example, are "fast-forwards" who use technology to advance their careers, "new-age nurturers" who are more family-oriented and "mouse potatoes" who use technology for entertainment.

Modahl naturally concludes that to target their Internet offerings and marketing campaigns to the right audience, Internet strategists must ultimately understand a customer's technographic profile. The theory explains why online music stores were the first Net companies to launch aggressive (some would say bizarre) TV commercials: They were chasing after the mouse potatoes who, Forrester feels, are typically young people, who want to be entertained, watch a lot of TV and spend even more time online.

Modahl really hits her stride, though, when she turns her attention to the business models she thinks will work in the Internet Economy. As the Net matures, she says, it will become easier for consumers to get information about things they want to buy, and as a result, supply and demand will become more transparent, causing prices to drop. The companies best suited to compete in this environment will have large customer bases to which they can sell lots of products - in other words, scale. It's no wonder Amazon.com is spending every penny it can adding product lines, building warehouses and snagging customers.

None of this is earthshaking stuff. But Modahl's case studies do a nice job of driving home her arguments. In one of her better examples, she describes how Charles Schwab transformed itself from a "stuffy leader" into an Internet brokerage leader.

In 1998, Schwab bit the bullet and began offering all trades at $29.95. To distance itself from other online brokerages, Schwab added an array of financial information and services the others couldn't match. It also targeted individual investors who'd traditionally used a full-service brokerage. The strategy paid off. It took Schwab just 14 months to make up in volume what it had lost on lower prices.

Modahl has other words of wisdom for established companies getting into the dot-com game. firms must turn their IT departments inside out so they're integrated with other departments and run by managers who respect customers as well as hardware. Unless they're in the technology business, companies should buy rather than build key software. And they'd also do well to avoid new technology until they know it works and provides a clear return on investment.

If you can get past the research-report tone of the book's opening, Now or Never is an intelligently written how-to manual for succeeding online, with real-life examples that offer lessons to managers at startups and at established companies alike.

- Michelle V. Rafter -- From The Industry Standard