"This may strike you as extremely naive, but ... [i]f there's all this money floating on the Internet, be it even the lowest of the amounts you mentioned, why does it seem that the truly creative and interesting (like, ahem, my own, listed below, which actually only just started so it's a bad example) don't make much money? Look at http://www.tabloid.net (I confess, I contribute to them). Original, refreshing, lively, broke. The story is the same over and over again..."

This message from the handsome and brilliant Edward A. Mazza II really got me going. If there is so much money floating on the Internet, WHO THE HECK IS MAKING IT??? Good question, and the answer is sobering.

The sad truth is that pioneers hardly ever get rich. Guttenberg didn't and neither will Tim Berners-Lee. This is for two reasons. First, it usually takes so long for an industry to grow and find its bearings that the pioneers are almost forgotten by the time the real money starts to flow. Second, pioneers can easily get suckered by the promise of what appears to be early and easy success only to find those first sales are often the last sales for a very long time.

Take the example of the Macintosh computer. Its introduction was accompanied by so much hype and good advertising that machines flew off the shelves before customers really began to notice there was nothing -- literally nothing -- you could do with a 128K Mac. There were two puny applications (MacWrite and MacDraw), a dot-matrix printer and no hard disk. After a few months, everyone who absolutely had to have an attractive but more-or-less useless computer had bought one, and Macintosh sales dropped to almost nothing.

The parallel with the Internet is obvious: Early Internet users would buy almost anything, browse almost anywhere, just because they could. Only the Internet was worse because a lot of it was free.

What saved the Macintosh is what saves every new industry worthy of continued existence -- vertical applications. Along came desktop publishing, and Apple had its killer application. Not only did desktop publishing make the Mac a success -- almost 14 years later, it's still the major reason businesses buy Macintoshes.

In e-mail and Web browsing, the Internet already has a couple killer applications, but it's hard to create an industry from products that are primarily given away. So the Internet needs a different model to follow -- like say, the California Gold Rush of 1849.

Who made money in the Gold Rush? Not the prospectors, most of whom didn't find gold. Even those who did find gold found the cost of doing business very high because of gouging by those who did make money -- the storekeepers and the whores. In 1849, Leland Stanford turned a general store into a world class fortune and eventually, a world class university. No 49ers founded universities. In fact, the only major U.S. fortune founded on gold was that of William Randolph Hearst, whose father founded the Homestake Mining Company (which exists to this day). Yet we think of Hearst as a newspaperman and maker of bad movies who built grand houses and invented the Spanish-American War. No universities for Hearst.

The storekeepers of the Internet are the makers of networking equipment and sellers of bandwidth. No, not your ISP -- he/she is more a buyer of bandwidth. I am talking about Sprint and MCI, and especially, Cisco Systems. As the Net grows, new storekeepers are appearing like Amazon.com and E-Trade.

The whores of the Internet are, well, whores: Adult content makes more money than all other types of Web service combined. For TV, I interviewed the guys and gals of an outfit called Virtual Dreams that makes $500,000 per month with nothing more than a couple TV cameras and a T-1 line to the Net. For $2.99-per-minute, the well-implanted Kat will do anything you ask her to, but you can't touch. Sitting next to her on the little daybed that doubles as a TV studio, I just kept looking her in the eye.

I know a couple of programmers who are making $7,500 per month with a 133-MHz Pentium server in a porno business that runs automatically -- no intervention required at all. They are so embarrassed by this success they are thinking of shutting down just because they'd rather be known as programmers than smutmongers.

This has to be hard to take for the serious non-X-rated producers of Web content who are struggling so hard to survive. At this early stage, it seems to take addictions to generate wealth. But what's new about that? Wasn't the British Empire substantially built on opium revenue?

In time, the World Wide Web will find its stride and X-ratings won't be required for major success. But what WILL be required is money, lots of money, because the Internet only looks like a medium with a low cost of entry. It's easy to get on the Web, sure, but it's very hard for people in large numbers to consistently find you once you are in business. This Web site is a modest success, but that has more to do with the PBS name and a decade of name recognition for me. If I was some newbie spouting this "wisdom," a lot fewer people would care or even notice.

Take the refreshing example of tabloid.net, mentioned at the top of this column by the admirable Edward A. Mazza II. Tabloid.net is a Web magazine. Web magazines are born and die in amazing numbers. Taboid.net, for all its cheeky freshness, isn't making much money. Why? MOST MAGAZINES DON'T MAKE MONEY. There, the ugly truth is out.

A third of all print magazines in America die each year, generally within a few months of being started. They die because they run out of money before finding an audience. Magazines that succeed are either those that find some unmet need (Wooden Boat, for example) or have enough money to be around long enough to be stumbled on by their audience. A major publication from Time-Warner, for example, is not expected to become profitable for 3-4 years. Seven years of losses are not unknown. I used to work for InfoWorld, a magazine that was not Net positive (did not pay back its early losses and become Net cash positive) for SEVENTEEN YEARS!!!! What keeps the big companies spending money like that is that when a magazine finally does become profitable, it can be VERY profitable. InfoWorld now makes a ton of dough.

Well, the Web isn't much different, except the cost of getting up and running on the Web is even less, which means more folks will give it a shot. But this makes the Web even more of a wasteland for publishers. How the hell does anyone even learn about tabloid.net? Add the lower cost of entry to the greater difficulty of even being seen, and I think the break-even period for the unexceptional Web publication is probably the same as for a print publication -- 3 to 4 years.

If the tabloid.net folks had known this, they never would have tried. But what if they truly do have a unique idea? And what if they get a few amazing lucky breaks? Well, then they might be profitable in a year and telling me how stupid I am. But do they even have enough money to last a year? I doubt it.

There are a number of trends operating here, but they all point to the significant conclusions that not many people are making money on the Net; those who are making money are operating in peculiarly rich puddles that are denied to the rest of us; and most of the really big money will be made by folks who are already rich. But that doesn't mean we shouldn't all become cybersod-busters -- just that we have to be very, very careful about which patch of Internet we plow.