All just a litle bit of history repeating... (The Future of the .com Industry)

Member Name: imagin8or

Product:	The Future of the .com Industry
Date:	06/07/01 (61 review reads)
Rating:

Advantages: Free stuff (atm), the broadband is coming, we love you, net!

Disadvantages: Not free stuff in the future, Yahoo! is coming, we hate you, adverts.

Well, we did it again. This time on a global scale. Suddenly, the net gets interesting and people start getting their own domain names, setting up web servers, putting up internet sites. Then advertising companies realise they can broadcast to the whole world. Then everyone wants their own domain, their own server, their own site. Pretty soon there are too many domains, too much advertising, and not enough money moving around. And then everyone realised the New Economy had become the New Folly. And then the beams broke and everyone fell through.

Now this all reminds me of a little know early 20th century thang called the Gold Rush. Suddenly, someone realises there's gold in thum thar hills. Then everyone wants a piece of the action. Everyone buys their pick and shovel and heads for the gold hills. More gold than before is found, but not enough to uphold all these people, and suddenly it all goes nectarine shaped.

And once again, the stock market went wobbly. Nothing like the 1929 crash of course, but still rather wobbly. And once again the people who made the most money were not the people who went digging, or in this case went htmling, but the people who sold the picks and shovels - the server hosts, the people like Cisco who put up the backbone. In fact the immense demand caused fastest growth of telecomms imaginable, somewhat like the huge spurt in growth of the railways across America.

So now we have the New Economy. This one seemd to have a little more longevity than the gold rush, as there is actually money to be made. But the point of the internet is information, and the speed of its transfer. That doesn't mean that you can only sell information, of course not. But your service has to make use of the transfer speed to make people prefer doing it on the net as opposed to otherwise. So it makes sense for Argos Additions (Kays) or other catalog services to go online, but not Pick'N'Mix. Thus I have reservations about Th
orntons online, but there may be enough people buying Thorntons' chocolate for other people to sustain the site, as this is Thorntons' main customer base.

One thing that has really disappointed about the net was the sheer difficulty in getting revenue. At first, it was all advert based but if you're faced with thousands of adverts, the revenue that a company can generate from you is limited to one or two of them, and the advertising is worth less. So I'm afraid, people, that we will have to pay. BarrysWorld was a dedicated dialup gaming service for which you paid by the dialup revenue share as per free ISPs. But the costs were higher than ISPs as they had to have all the gaming equipment, etc, as well. So BarrysWorld went into liquidation. So they issued an email to all the members (including me) to say 'sorry guys, that's the end' and provided us with a URL to go to which was for a questionnaire about what we would pay. Now that was a smart move, because people realised the price they would put on the service they had been receiving. I think enough people must've said they'd pay enough per game, as BarrysWorld sent another email a couple of weeks later to say that someone had given them funding to carry on, if only with a better business model.

So you see there has to be money changing hands somewhere. The original university to university net was fine, as academics are nice people who don't mind paying to talk to other academics. But now the net is open to all, and we need to define how it will continue. The biggest, most well known sites have struggled through because their advertising revenue did not take a hit. More people went online, and more went to their site. A case of there being more blackcurrant squash than water, so add more drink and the amount of blackcurrant increases, instead of being diluted further. This enabled Yahoo!, Google, etc to gobble up the lesser, ailing startups whose owners wer
e getting cold feet. Of course they went for a song as the startups could see the plug hole fast approaching, even if they would have survived.

So the New Economy is about big ideas. Basically you make a great site - these usually start small, a note to you champagne launched startups - and then when you have a reliable, loyal customer base look at your options. These will be either to hook up with your competitors (if on a similar level) to make another über-site, sell out to a big company like Yahoo!, or to attempt a big expansion programme. The last will mak the most money, if it works but is the least stable and therefore not often used. Usually you'll hook up with your competitors or sell out. An example of hooking up is the QXL-GoRicardo merge, whereby QXL and GoRicardo both had majority customer shares in different countries; GoRicardo were big in Germany I think, whilst QXL was bigger in the UK and France, etc etc. So in the UK its known as QXL and in Germany it's known as GoRicardo (it might be Italy actually, but hey). On the other side is the swallowing which is more commonplace - just look at Google's acquisition of deja.com (much to its detriment) and eGroups, or MSN's hotmail and various others.

So today's market is of little upstarts who'll make it big, upstarts who'll sell out, and germlike little sites that'll merge into a man o'war (a jellyfish that can kill you in 3 minutes, whilst being made up of millions of microbes). Prepare to pay for what you love, or watch it disappear into the depths of a giant. One place I really hope makes it to the big time by itself is dooyoo, but I think that the attraction of dooyoo Yahoo! will play too much on the purse strings.

Happy surfing, and watch out for the little writing at the bottom that says 'a Microsoft Network subsiduary', ::shudder::.

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