The "new economy" is now an old phrase - it's been around for more than a decade!

As the name suggests, the new economy refers to revenues/expenses generated by methods heretofore unavailable. It is often based on activities that are related to entertainment. And being Internet based, frequently takes advantage of the "long tail". While relying on existing communication infrastructure for its billing & collection !

The SMS Engine
The first step towards the new economy started with commercial SMS. At first, the digital, wireless infrastructure was set up as a reliable communications link. Next, this system was extended to short text messaging (SMS). And soon, telecom operators started sharing revenues with commercial establishments to "entice" consumers to use SMS over & above their communication needs ! (It certainly helped that the rugged billing mechanism of telecom operators provided a smooth route for collection.)

Today, SMS is routinely used by game & reality shows to communicate opinions via votes & polls,by commercial establishments to generate product enquiries and sometimes just generally! All for sheer revenue.
(Examples of the last type: "SMS 'Win India' to express your support for the Indian cricket team" Or "SMS 'Taj Mahal' to ensure that the edifice gets included in the Seven Wonders of the World" ?)

Reality Shows
Reality shows were the next step towards defining the new economy. And have they come a long way!

Today, a minor celebrity with little qualifications / track record, can win a hundred thousand dollars. And earn another few millions subsequently by endorsing product lines, giving interviews and even writing memoirs. All on the (dubious?) qualification of having spent 3 months bickering, in full public glare, with a dozen similar strangers!

The revenue model is based on scale - the large scale of viewers who participate by "voting" by SMS. Along with a supportive media (print, TV, radio, Internet) which bombards the lay public and helps create a "celebrity" status for the winner.

Such fervor was unimaginable even a couple of years ago (old economy) !

Online Gaming
Massively multiplayer online role-playing games (MMORG) started off as the blood & gore variety. Who can forget the world of Prince of Persia (2D version) ? Counter Strike (CS), Quake, et al were the forerunners in simulating near real life 3D characters who could shoot you down. (Of course Prince of Persia also came up with its 3D version.)

Then came virtual world games like Ragnarok, where your expertise would help you accumulate Ragnarok money. Which you could use to buy virtual Ragnarok thingies (including swords & the like). Which could use help you accumulate more Ragnarok currency!

Although there are "curb" deals reported where Ragnarok money is transferred from one player to another in consideration for dollars, this is not part of the official business model.

Even Nickoledeon TV is working on a virtual world for its tiny viewers!


Google Ads
Can any discussion on the New Economy be complete without mentioning Google ?!
Google Ads has successfully targetted the "long tail" of small advertisers spread across the globe (for the most part, this comprises of companies with less than 10 employees) and offered them an economic way to market their services & products over the Internet by tyng up with the Google Search Engine results ! A classic case of creating a new revenue model, no economy (with revenues projected $ 12 billion revenues p.a. and growing @ 25% every quarter).


Social Networking
Have you spent hours "chatting" with strangers on the Internet? Sharing amateur video, making comments & linking to new "friends" (most of whom you'll probably never, ever meet in your life)? Welcome to the world of online social networking.

Revenue: Apart from online ad banners and possible fees for community product sampling / feedback, there's a new, interesting possibility : using online communities to promote & extend TV programming ! If U.S. TV major NBC Universal has its way, it will soon link its TV properties like "The Office" to a new social networking site - to promote/extend its properties via online communities.

Virtual World
This latest phenomenon is actually a hyper-extension of the MMORG. Games with pre-set rules have evolved to to pure role-based games. And now, to a near-real simulation of the world as we know it - welcome to the virtual world!

A good example would be www.secondlife.com. Each "resident" of this virtual world is called an "avatar" (Sanskrit for re-incarnation) with the right to log in, trade currency & visit community pages. Linden dollar is the currency within the virtual world. And businesses set up by "avatars" in the virtual world mostly accept payments in Linden dollars - although some accept payment via credit cards and payment gateways like Paypal.

With the Swedish Govt. all set to host a virtual consulate in SecondLife.com, it looks like the Information Age is driving the new Age of Entertainment !