RIF-2001: The Millennium
As one participant sharply remarked, RIF is the kind of event where 100 well-known people in Runet come to party, and 500 more show up just to watch them do it. That wasn’t quite true. For the next year, Russia’s internet industry would evolve strictly along the rules and vectors established on RIF’s stages.
Time for Conclusions
Five years is a long stretch—especially by internet standards. Some of the forum’s veterans began drawing conclusions.
For the first time, the number of participants dropped. Not critically, but 100 fewer applications was a clear marker. The level of brands represented was also lower compared with the previous forum.
If RIF-2000 had felt like a nonstop carnival, this year’s mood was sobering, if not outright hungover. Venture capital firms, e-shops, and advertising agencies had set the tone the year before, when it seemed that serious money had arrived, a solid market had formed, and internet companies were about to rival raw-materials giants.
But March 2001 was far from rosy. Hastily learned buzzwords like “B2B” and “e-commerce” lost relevance before they became boring. With NASDAQ collapsing, foreign investment disappeared from view. Layoffs swept through companies—news of them sometimes breaking right at RIF, adding to the gloom.
Users and businesses agreed: CTRs on most platforms collapsed, as did online sales—even within Moscow. Other indicators were just as bleak: extremely low channel capacity at every “mile,” slower upgrades of consumer hardware, and a reminder that the internet’s 1.5% audience hardly represented wealthy spenders—or, if they were, they still preferred shopping offline.
Sketches from Reality
To see the broader context, consider this: 2001 was the year Russia set up the .ru domain coordination council and launched its first domain registrars. Russian Wikipedia also appeared, and the country became the first in the world to officially recognize e-sports.
Legally, the State Duma passed a law equating electronic digital signatures with handwritten ones.
The leading national news agency opened free access to its entire newswire online. President Vladimir Putin held his first internet conference, answering questions from users of three online outlets for an hour. Later that year, he met in the Kremlin with heads of major IT companies, jotting their proposals into his notebook.
The Content Side
Despite major upheavals, the topics of talks and roundtables stayed familiar: access technologies, web marketing and advertising, e-commerce. A new section on offshore programming was less substantive than the websites covering it.
What did change was the role of the state. For the first time, government involvement in regulating and supporting internet business became a central theme. Evening talk shows on the subject featured TV host Dmitry Dibrov, alongside sharp and conflicting speeches.
Calls rang out to dismantle state monopolies, abolish VAT on imported equipment, mandate network wiring in all new apartment buildings, and require state-funded students to repay their tuition before moving abroad.
Interestingly, companies not directly tied to the internet also attached themselves to RIF, making the forum a prime source of market intelligence.
Runet’s major players, flush from last year’s foreign investments, reported their viability—though news of pending restructurings quickly followed. Revenues came mostly from advertising, paid subscriptions, and, like in the offline world, direct sales. Yet the hard truth emerged: hardly anyone in Runet had even reached break-even, much less recouped their investments.
Learning from Mistakes
Most online ad platforms were unprofitable, prompting participants to rethink their strategies. Banner ads in particular had lost effectiveness: once novel, they quickly became background noise, delivering just two to four clicks per thousand impressions. Expensive presentation sites reached only tiny audiences. Companies turned instead to indirect advertising, PR, and branding in online media. Online shops and digital news outlets also reported disappointing results.
The cold shower led to a few hard but productive realizations.
First: there is no such thing as “internet business”—only business in the internet. Nothing arises from zero, not even in Runet. Only companies with real-world infrastructure could survive; the key was positioning and promoting existing offline businesses online.
Second: Moscow’s internet and Russia’s internet were distinct phenomena, each with their own rules.
Third: Runet suffered from a lack of its own scientific base—unique among industries. It needed serious analytics, grounded forecasts, and strategic research.
Fourth: policy mattered, but the competence of policymakers had to rise as well. Updating rapidly aging licensing and certification standards was essential, along with shifting focus from “control” and “order” to protection and support.
Fifth: universities needed proper IT education, not only for specialists but as complementary skills across disciplines. Business had to take an active role in this.
The bottom line: the investment game was over. Real business had begun.
