Boom And Bust.... And Kinda Floating @:-) (The future of the .com industry)

Name: dadofthree

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Product:	The future of the .com industry
Date:	20/05/06 (173 review reads)
Rating:

Advantages: It's a new way of doing business, broadening the audience of many

Disadvantages: Still expensive to run, consumer doubts

We all remember the stock market flying through the roof during the boom of the internet or .com industries.

I'll begin by explaining for those of you who don't know. In the example of Amazon and such, the idea that a company could reach billions of customers world-wide astounded many. So when Amazon went live and people actually started buying from them online, investors went mad. It was assumed that because the internet could be seen by billions, Amazon would have the biggest possible target audience and so would make more money than anyone had ever dreamed of. So the stock market prices went up, the news reporters were sent scrabbling for a paper and pen and the future looked rosy.

But then something happened to burst the bubble.

Rather than billions of people buying books, Amazon had found limitations. The first was advertising. Now, in time, had they been overly successful, they could have advertised in every country in the world, and thus tapped into the billions of people that they refer to. As it stood, nobody outside of the UK and America had a clue who they were.

Internet search engine advertising wasn't drumming up anywhere near the expected business, and things began to look a bit down. Now, I use Amazon as an example you all know - mainly because they survived this whole saga and are still going today. Indeed, they have emerged rather well considering. But this was something that faced all .com businesses. They went in with a very optimistic outlook, and soon found that the grass wasn't as green on the other side as they had anticipated.

But lack of advertising wasn't the only reason. If it was I am sure Mr Bill Gates would have put his pounds into a venture or two for it. There was also the little matter of consumer confidence. The internet was still a new and to some, scary adventure. With this in mind, and news stories coming out about Microsoft, the biggest company in the world of computing, having someone take 4000 credit card numbers and post them to the general public, consumer confidence in security was beginning to wane.

Rather than risking sending their details through an unknown and unchartered hyper space, people were sticking to more traditional methods of shopping.

But then came further warnings from trading standards about rogue companies posting online and prentending to be legitimate, taking your card details from you, charging it and never being seen again.

We started to hear about how unregulated the internet was. While this was considered a big selling point for most, the .com industries soon realised that this was something that would put many consumers off.

Indeed, the bubble soon burst and the majority of the .com industries started to die off. Going bankrupt was the only way out for some, and some investors lost entire life savings in a very short space of time.

So what happened with Amazon then? Well, they kept a fairly tight ship. Through downsizing and lowering their expectations, they found a level they could operate at. With all the publicity they had received, they had built up a small but loyal customer base. Indeed, they had a target audience for their goods.

You see, the .com industries came along too soon. In todays Britain, almost everyone has internet access at home. Indeed, it has become one of the governments key objectives. But what companies are doing online now, is simply wisening up. As people use the internet, they become more secure about it.

As the banks allow customers to access their accounts online, customers begin to feel safer about shopping online. Advice from the banks about online transactions (such as look for the blue padlock to ensure the site is secure), has also served to help us feel more at ease when using our payment cards online.

This has helped remove the barriers that were previously in our way. But how do companies overcome the problem of rogue sites taking your card details and never delivering? Well, the industry had to respond as a whole. And you're reading it right now. Those who want to check if a site is reputable can now do so on an independent reviews site such as this one. Just type in the company name and see what people have to say about it.

It's an internet version of word of mouth. To see just how effective this is, see how many non-member reads occur on this site. Thats the people checking this information, and thats one reason why Dooyoo can support itself.

So what else helps? Well, the companies we now see operating successful online services are the same ones we see in our high street, or at elast have seen in the past.

Tesco.com, Asda, PC World... they're all at it. Rather than an internet business aimed at world domination, it's simply an effort to generate more business at home, attract the online shopper in the UK who wants added convenience and an extra service, and is willing to pay for the pleasure.

However, none of these companies are making massive profits from their online devisions. While tesco is raking in Billions, it still sees it's .com service as a potential for the future. It's still churning in a small profit just now, as are many others, but it's the preparation, setting the groundwork for a wider network and a bigger target audience in the future. By building a solid foundation, you can ensure that you don't collapse, and that's the lesson thats been learned by the survivors of the .com boom, and bust!

So what's still to come in my opinion? Well, the internet companies really want to see a real boom in consumer spending online. Personally, I think it will increase, but over a very long period of time. As it increases, I think we will see bigger retailers taking all the business, in much the same way as the high street, using their reputation to bully others out of the market.

The steady increases in spending will inevitably lead to bigger investment and better service, but its all a little early yet. With too many people still wary of the internet, the target audience is still too small. Keeping themselves in check, making sure they don't over commit and waiting their time is what the current .com industries need to do.

While I feel the start of World War 3 is the only way to stop online companies altogether, I think the rise in their stature will be a very gradual one. Although my vision of 20 years time? Well, Mcdonalds will still be serving fast food, Tesco will still dominate our out of town shopping experience, and everyone will be buying from the very same companies online... because very few .com only industries can survive the lack of advertising and customer doubt to get themselves off the ground. You see the name PC World, you trust them straight away - at least where credit card fraud is concerned, you see 'bens hack shack', you wonder what country they're actually based in. And who can really be bothered checking with trading standards prior to use when a big company does it for the same price?

So there we go... the online future is exactly the same as the current reality. I wouldn't even be surprised if someone creates a literal computerised high street when you click you mouse to wonder from door to door, looking at the goods on the shelf before purchasing... no need to leave the website - just like we rarely leave the main high street in our towns.

So here's to wishing them well, and hoping not everything goes online, I don't think a pint would last the digital signal between the brewer and my brain!

Summary: Keeping the size and financial backing in check, .com industry is starting to make money.