Something very old-fashioned, almost Sam Walton-like, is happening on the Web and I like it: The value-added notion is coming back.

Think back to when you first heard of the Web. For me, it was because of


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. I love books. I love libraries. But I'm also very lazy about my leisure time. If I have free time, I want to spend it with my wife and kids, not shopping or looking for books. Amazon was perfect for me because I could research and order books when everyone else was asleep, so I didn't waste time. Frankly, I was immune to cost; time is my most precious asset and Amazon gave me that. It was a value-added proposition.

My second experience with the Web was with



. I always wanted to find out what the news was on


. I could pay $1,400 a month for a Reuters feed. But on Yahoo! Finance, I got the same feed for free. More value-added.

Then I fell in love with

Motley Fool

and the idea of people interacting to help each other make money. It later got a bit corrupted -- what hasn't been when it comes to chat? -- but I loved the community sense of it. True value-added.

But then all heck broke lose. People forgot the value-added proposition. They began to create companies that didn't need to exist in order to bring the company public, which was a giant branding event. Most of these companies were simply catalogues in disguise. In fact, they weren't as good as catalogues.

True, there would be exceptions. I like the sites that match buyers with sellers nationally,


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being the best examples. They have value-added. But online sporting goods? Online shoes? Online suits? Online pants? Online groceries? Where is the real value-added there? Aren't these just 800 lines? And how come many of these Web sites had to go into catalogues anyway? What's the deal with that?

The survivors of this process will be pretty easy to name, soon. All you have to do is ask if they have a value-added that can't be produced by an 800 line or a catalogue.


they do, maybe they'll make it, but if they don't, forget about it.

Obviously, the reason it's so hard to get value-added out of the Web is because the Web culture is free.

has been about as successful as anyone charging for the Web, and yet people scorn us as fools to charge for value-added, as if value-added has to be given away on the Web even though it would be expensive in print. I often think if we were a print or a fax product and we didn't charge, we would be labeled fools, but because we're on the Web, we are fools for charging. Pretty funny when you think about it. But soon we will be free, except for a certain extremes which I think, once again, will embody a great value proposition and we will, in turn, charge more for those.

I thought about this a lot because of something that happened earlier this week. I was on a

New Media

panel hosted by

New York Magazine


Industry Standard

, and someone asked if there was anything still investible out there on the Web, particularly in content.

I immediately spoke proudly of an investment I made personally and for my firm, in

Powerful Media

. (You may have seen the advertising for it as

on our site. I am writing regularly for it when it gets underway shortly.)

John Huey, our moderator and the editor of


, immediately whacked me on the head with


, his new magazine, which, I can tell from the welt it left, will be a huge commercial success. Ton of advertising in it. John pointed out that I am friends with the guys behind Powerful Media. To which I responded that you don't give friends a couple of million bucks if you think they're going to lose it for you.

It was all done in jest. John and his magazine are about our only friends in the business at

and I hope I don't hurt him by writing that. And while I'm log-rolling, I have long contended that he puts out the best magazine in any business. We get three copies at the office because I'm sick of having to share mine with

Jeff Berkowitz


Matt Jacobs

; I get a copy at home in case somebody steals mine at work.

But I did want to point out at that session that the reason I'm investing in Powerful Media is that it's an intensely value-added product, the first of what I call the next generation of Web periodicals designed to blow away the off-line competition. is not a newspaper. It doesn't aspire to that. It doesn't aspire to be a newsletter, either. It doesn't aspire to be



Hollywood Reporter

, two very expensive publications that will be outdated the moment they come off the presses because of reminds me of one of my favorite movies,

Desk Set

. In it,

Katherine Hepburn

runs this group of people who know everything and can answer anything, until they are replaced by a fumbling, stupid computer. This piece of Luddite celluloid is pretty much on the mark. Computers have continually let us down as a source of information because, in the end, they are programmed by humans.

If Tracy had brought in instead of that clunking piece of hardware, Hepburn would have had to quit. Because this service is so value-added, and can answer so many questions and inquiries in real time, the notion of not paying for it, simply because it's on the Web, seems totally harebrained.

The press jackals who have never invented a thing and live to carp are probably gnashing their teeth right now, eager to rush stories into print about how nobody will pay for anything on the Web and don't we know that because of

. To which I always say, since when are 110,000 people nobody? How did that get to be nobody? Is 200,000 somebody? Or when we get to that number, will that be nobody? When it hits a half-million, that will really redefine nobody.

The beauty of is that it gives you tons of information for free that others now pay a ton to get. It does it to get you in. When you see the paid stuff, you will want that, too. To me, that's Yahoo! meets



. Even the biggest Web-phobes admit to the success of those institutions.

While I'm ranting on this, let me add one other thought: If you really think that nobody will ever pay for something on the Web when that same something is available only for big bucks off-line, and the Web product is speedier and better, I think you'll be proven very wrong, very shortly.

I know that's an out-of-favor position. But, believe me, companies that come public now are going to have to have more going for them than advertising if they're ever going to tap the public markets. You wait and see. I know I'm going to be right. Big time.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long America Online, and Yahoo!. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at