"Low hanging fruit" is a shorthand expression, the idea that some sales are so easy, so obvious, that they're virtually automatic. Hot dogs at a ball game, the need for a plumber when the hot water heater goes, and title insurance when a home changes hands are all examples of low hanging fruit.

But while there may be low hanging fruit in every field, the volume of such easy pickings tends to be limited.

We have seen numerous Internet sites ramp-up to a given level of visitors, members, registrations, and revenues, but when you ask how much further such sites can grow projections get fuzzy.

You could argue that future Internet growth is effectively unlimited. But after years of growth even computer production has begun to slow. People only need so many TVs, radios, and Internet services. At some point, growth stagnates.

There are some 2.2 million real estate licensees nationwide, according to the Association of Real Estate License Law Officials (ARELLO). But does anyone really think all 2.2 million license holders are out there every day helping consumers buy and sell homes? What number would you choose? As a point of reference, the National Association of Realtors has about 760,000 members, one-third of all licensees.

Suppose you have 1,000 MLS members in a local community. Are they all equally successful in the marketplace, or is common wisdom correct -- the claim that 10 or 20 percent of local real estate practitioners do 80 to 90 percent of all the business?

There's an assumption on the Internet -- and on Wall Street -- that much growth for real estate sites lies ahead simply because a large percentage of licensees are not now online. But is this assumption correct?

It's generally estimated that some 350,000 to 400,000 NAR members are now online, and that such web users represent 40 to 50 percent of the possible market for online real estate services.

But what if 400,000 licenses are not 40 to 50 percent of the potential market? What if the real market opportunity is substantially smaller?

Let's agree that by "licensees online" we mean those active in real estate who have a website or other online presence beyond e-mail or incidental inclusion on sites operated by brokers, associations, MLSs, franchises, etc.

On the conservative side, if 350,000 brokers and agents equal 50 percent of the potential online universe, then there are potentially 700,000 licensees who will buy Internet products and services. If we use a more liberal set of calculations, there are 400,000 licensees now online and they equal 40 percent of the potential online marketplace, then as many as 1,000,000 licensees will ultimately be on the Internet for business purposes.

How reasonable are these estimates?

In the first case, 700,000 possible online brokers and agents equals 92 percent of today's 760,000 NAR members. In practice it seems unlikely that 92 percent of NAR members will go online with any specific site. Why? Because there are strong national, state, and local competitors all vying for such business.

As to the high estimate, 1,000,000 licensees, this number must include both NAR members and non-members. The rules in four states require that all licensees have access to MLS services, so there is some logic to the idea that the potential pool of licensees who might go online exceeds the number of NAR members.

That said, the Internet is no longer new. The "early adapters" long-ago signed-up. More than half of all households are now online. The low hanging fruit is gone. What we have is a business in a developmental limbo -- the Internet is no longer new, but it is also not "mature" in the sense of autos or steel.

So yes, there is remaining Internet growth. Unfortunately, much of the growth that remains falls into four categories.

1. Those who will eventually go online -- but only with steep discounts and rebates. These subscribers and users represent new revenues, but revenues which are increasingly expensive to obtain.

2. Those who will go online, but not commercially. They'll have a web address and perhaps free e-mail somewhere. For our purposes, they're not doing business on the Web.

3. Those who will go online -- but with some other service. It doesn't help the Smith site if a licensee goes online with Jones.

4. Those now online who will leave a particular site or service, or cut back expenditures.

In the first case, the cost to acquire new subscribers is so great that additional users may represent limited profit opportunities -- or maybe no profits. In the second, third, and fourth cases, the results are no revenue to any online sites, revenue only to someone else's site, or less revenue.

What does it mean?

The overall pool of potential revenue-generating online licensees is likely far smaller than many believe. And the pool of potential clients for any specific site or service seems far smaller still.

The result is that four ways to build an online business from this point forward are likely to emerge:

• First, get more clients, visitors, and users. For many sites and services this will prove costly and perhaps impossible because that low-hanging fruit we discussed is gone.

• Second, offer more services. Here the idea is to make a site more valuable to users, thus keeping users you now have and hopefully gaining others who hear about what you offer.

• Third, charge current users more. Even small increases can produce big benefits. The absolute best example of this strategy is AOL -- in July it raised monthly rates $1.95 per user. Given 30 million members, that's an additional $58.5 million a month or $702 million a year.

• Fourth, try to capture clients, visitors, and users from other sites. If the market is only so large at any given time, the best way to obtain additional market growth is to get clients from other sites and services. This can be done by marketing, offering more and better products and services, or reducing fees.

Will online sites and services prosper in the future? Surely some will -- but many will find that much of the marketplace opportunity the Internet once represented has already been absorbed.

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