Summarize Strategy and the Internet by M$.$ Porter interne is an extremely important new J technology, and it is no surprise that it has received so much attention from entrepreneurs, executives, investors, and business observers. Caught up in the general fervor, many have assumed that the Internet changes everything, rendering all the old rules about companies and competition obsolete. That may be a natural reaction, but it is a dangerous one. It has led many companies, dot$-$coms and incumbents alike, to make bad decisions $-$ decisions that have eroded the attractiveness of their industries and undermined their own competitive advantages. Some companies, for example, have used Internet technology to shift the basis of competition away from quality, features, and service and toward price, making it harder for anyone in their industries to turn a profit. Others have forfeited important proprietary advantages by rushing into misguided partnerships MARCH $200163$ strateg y an d th e Interne t and outsourcing relationships. Until recently, the negative effects of these actions have been obscured by distorted signals from the marketplace. Now, however, the consequences are becoming evident. The time has come to take a clearer view of the Internet. We need to move away from the rhetoric about "Internet industries," $"$e$-$business strategies," and a "new economy" and see the Internet for what it is: an enabling technology $-$ a powerful set of tools that can be used, wisely or unwisely, in almost any industry and as part of almost any strategy. We need to ask fundamental questions: Who will capture the economic benefits that the Internet creates? Will all the value end up going to customers, or will companies be able to reap a share of it$?$ What will be the Internet's impact on industry structure? Will it expand or shrink the poo! of profits? And what will be its impact on strategy? Will the Internet bolster or erode the ability of companies to gain sustainable advantator