Bargain beets, babushkas, and Russia's Internet

The outdoor market at Mytischi is like so many in Russia: drab, muddy, and filled with rudimentary kiosks. Old women trudge through the icy slush, looking for bargain beets or tea.

While the scene appears little different from that of decades past, there is a change afoot, heralded by the huge yellow sign hanging over the entrance. It advertises a web site - (www.yarmarka.com) - where the babushkas can order their groceries at the click of a mouse.

The dotcom revolution that has so changed American life is remolding Russia too, if more slowly. The number of Net users has doubled over the past 12 months to 2 million - about 1.4 percent of the population. And just like wired societies in the West, Russians can now check their bank accounts, reserve plane tickets, and book opera seats online.

Even Russia's acting president, Vladimir Putin, is getting into the act. Although widely considered a throwback to the old days of a sterner state, Mr. Putin chose to publish his political manifesto on a new government Web site launched Dec. 27 (www.pravitelstvo.gov.ru).

In an introductory statement, the site declares, "The significance of this development is well beyond another official public information channel taking off in the Internet. In fact that means a fundamental turnabout in government information policies. From now on, the latest first-hand government news will be immediately available to all Internet users."

Putin is just one in a growing tide of Russians who have practically overnight discovered the Net's powerful potential. And he confirmed that the virtual is now a reality here.

"It is impossible to stop the progress," says Irena Fadeyeva, a spokeswoman for Golden Telecom, an Internet service provider (ISP) in Moscow whose business recently was extended to 60 cities.

The cyber explosion is all the more dramatic considering that technologically backward Russia is not a computer-driven society and has far less disposable income than the West. Phone lines tend to be lousy, and imported computers costly.

But the lure of the Net is such that users were not greatly hampered even by an economic crash that began in August 1998 and lasted for most of last year. The crisis especially hit the sort of people who use computers: well-educated, middle-class, young, urban professionals.

Now, the quantity of Web sites has topped 20,000. Search engines number more than a dozen in Moscow alone. Russians can stay on top of trends with various new magazines, one television and three radio programs devoted solely to information about the Internet.

Perhaps the biggest sign that the Internet's day has dawned in Russia is its harnessing by politicians and security services. The Federal Security Service (FSB), successor to the KGB, has devised a system called SORM by which it can potentially spy on Internet traffic.

Meanwhile, the Internet made its debut as a major campaign tool in Dec. 19 parliamentary elections. Most major parties and candidates set up Web sites to try to attract voters.

One such site, operated by the Kremlin-linked Effective Politics Foundation, was particularly active, publishing online smears against Moscow's Mayor Yuri Luzhkov.

Then the group released early election results before balloting was over. Although illegal under Russian law, the practice went unhindered because the Web site (www.elections99.com), was registered abroad and thus could not be closed by authorities here.

"A whole new trend began - the role of the Internet in politics. Next time, it is bound to be even more widely used," says Mikhail Akopov, a partner of DM Studio, an Internet company based in Moscow.

Foreseeing the growth of the Net as a business tool, the huge MediaMost information-financial group recently bought a local search engine, Netskate.ru, for $450,000 - a massive sum by Russian Web standards.

Founded just two months ago, Molok.ru, a Russian version of the eBay online auction house, offers everything from cars to chipped, old teacups.

But for now, the biggest Internet business seems to be trading in Web-site names themselves, rather than goods offered electronically. In a practice known as cybersquatting in the West, small-time users register the names of big companies, people, or other titles that they believe someone one day will be willing to pay a hefty fee to acquire.

For instance, the domain www.Putin.ru has already been snapped up by SiteShop.ru, a small company that specializes in buying and selling sites. Industry sources are curious to see who the next owner will be.

Another downside of the Net is hacking and electronic scams. Criminals who have penetrated every other level of Russian society are committing cyber-fraud, breaking into sites or using the Web for theft.

"Maxim," for example, claims he is a teenager from Russia. He claims responsibility for the theft of thousands of credit-card numbers from Internet music retailer CD Universe over the holidays, and for publishing them on the Web.

Industry sources agree, however, that honest Russian e-commerce has a long way to go before it completely alters how business is done. Russians do not shop online in large numbers due to a lack of buying power. Unlike Americans, Russians do not widely use credit cards or make many purchases from catalogs, which would facilitate the switch to electronic shopping.

There are also legal obstacles - such as no digital equivalent of the rubber stamp and paper required to formalize a trade transaction here.

This can be frustrating for pioneers of online shopping such as Sedmoi Kontinent, an upscale food-store chain in Moscow. It uses the Internet to take orders from customers - and then has to trust them to come up with the cash upon delivery.

Some 75 percent of Russian Internet users surf the Net for fun, not work, according to Andrei Plushev, who hosts the daily Internet radio program EkhoNet.

This is perhaps why one of the most popular Russian Web sites is Anekdot.ru, which devotes itself to recounting the latest political jokes.

"Most people use the Internet for amusement," he says. "It has become a status symbol, like mobile phones."

(c) Copyright 2000. The Christian Science Publishing Society