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Mr_Furious
TRIBE Member
.com's are businesses based solely on the internet
i.e. Amazon.com. They don't have an office, or a warehouse, its just basically a middle man who purchases books from wholesalers and then distributes them to you (the consumer)
i.e. Amazon.com. They don't have an office, or a warehouse, its just basically a middle man who purchases books from wholesalers and then distributes them to you (the consumer)
Mr_Furious
TRIBE Member
not all of them plummeted, but the majority of them did.
I don't think anybody really knows why, it just kind of happened.
that just goes to show...the faster you make your money, the more likely you are to lose it....
I don't think anybody really knows why, it just kind of happened.
that just goes to show...the faster you make your money, the more likely you are to lose it....
[- FuNKtiOn -]
TRIBE Member
as someone who works selling web hosting and ecommerce packages and various other online business solutions, I can say that the novelty has done anything but worn off.
companies are capitalizing on being able to market their products to people throughout the world, without the buyer even having to speak to a companies representatives.
this is another reason spam emailing has become such a bastard issue.
the fact that pretty much everyone does have an email address, makes them primary marketing targets.
no more printing costs, shipping costs, or lag time for snail mail to show up.
instant gratification for the companies involved.
increasing amounts of marketplaces (ebay, msn marketplace, bcentral marketplace, msn auctions, to name a few) also increase the amount of people wanting to hop on the ecommerce bandwagon, because, well, we all know how succesful ebay is, and the ebay company itself isnt even doing the selling.
vive la internet.
companies are capitalizing on being able to market their products to people throughout the world, without the buyer even having to speak to a companies representatives.
this is another reason spam emailing has become such a bastard issue.
the fact that pretty much everyone does have an email address, makes them primary marketing targets.
no more printing costs, shipping costs, or lag time for snail mail to show up.
instant gratification for the companies involved.
increasing amounts of marketplaces (ebay, msn marketplace, bcentral marketplace, msn auctions, to name a few) also increase the amount of people wanting to hop on the ecommerce bandwagon, because, well, we all know how succesful ebay is, and the ebay company itself isnt even doing the selling.
vive la internet.
amazon is the best example of what a .com is...
the company has been around for a few years.. got tons of money from the stock market.... has no real product... just reselling... has never posted a profit.. but actually posts hundreds of millions of losses each year/quarter.
so basically.. its an overvalued stock... its a bubble stock... the business plan was developed from people who live in a bubble.
Cheers,
Dave
p.s. amazon is not expected to post a profit for 2 more years i believe
the company has been around for a few years.. got tons of money from the stock market.... has no real product... just reselling... has never posted a profit.. but actually posts hundreds of millions of losses each year/quarter.
so basically.. its an overvalued stock... its a bubble stock... the business plan was developed from people who live in a bubble.
Cheers,
Dave
p.s. amazon is not expected to post a profit for 2 more years i believe
They plummetted because in most cases, these companies did not have a solid business model. Anything connected with the internet did was having an incredible run on the stock market.
So, companies would be created via funding from all to eager banks and venture capitalists. they would quickly be floated onto the stock market and watch their price take off. Using this money, they would buy state of the art computers, servers, fibre optic routers, high speed phone lines etc. etc
Unfortunately, no one really ever gave thought to how their web based businesses would make money. As a result, as companies started running out of cash, they found banks were not willing to extend more credit to them. Hence, they collapsed.
The 1000's of companies that crashed, then tried to sell the computers, servers that they had bought. This in turn led to large companies like Dell, Sun and Nortel going to the shitter. They were competing with themselves and their own products. They had way too much inventory, with no buyers, which just wasted away.
So, companies would be created via funding from all to eager banks and venture capitalists. they would quickly be floated onto the stock market and watch their price take off. Using this money, they would buy state of the art computers, servers, fibre optic routers, high speed phone lines etc. etc
Unfortunately, no one really ever gave thought to how their web based businesses would make money. As a result, as companies started running out of cash, they found banks were not willing to extend more credit to them. Hence, they collapsed.
The 1000's of companies that crashed, then tried to sell the computers, servers that they had bought. This in turn led to large companies like Dell, Sun and Nortel going to the shitter. They were competing with themselves and their own products. They had way too much inventory, with no buyers, which just wasted away.
da MiGHTy pLUm!
TRIBE Member
they died mainly because a lot of the companies that sprung up had no solid business plan to back up their innovative ideas. They were the fad for investors at the beginning so they pumped large volumes of money into ideas that didn't necessarily amount to anything, and then investors wised up and took a step back to see what was going on. Companies that had no business plan on how to implement their ideas to generate revenue disappeared, leaving the ones still around trying to hold on to remaining investors and trying to attract new investors by convincing them they had a solid money making plan.
at least that's my understanding of what went on....
-ron!
at least that's my understanding of what went on....
-ron!
Re:
would you post on tribe if they started charging a monthly fee?
the minute you introduce fee's you lose a lot of people. they tried to compensate for this by allowing adverts on web sites. all was hunky dorey for a while, but then when the cash crunch hit, people couldn't afford to buy web advertising.
Yahoo is a good example. they have tried to keep the majority of their services free, and have relied on web advertising for revenue...this has fallen significantly in the last 4 quarters. Their latest results which came out on Monday were pretty poor.
would you post on tribe if they started charging a monthly fee?
the minute you introduce fee's you lose a lot of people. they tried to compensate for this by allowing adverts on web sites. all was hunky dorey for a while, but then when the cash crunch hit, people couldn't afford to buy web advertising.
Yahoo is a good example. they have tried to keep the majority of their services free, and have relied on web advertising for revenue...this has fallen significantly in the last 4 quarters. Their latest results which came out on Monday were pretty poor.
), but it seems that just when the it seemed the world was headed in that direction, KABLOWEE, it comes crashing down, or so it seems. maybe it's just a case of competition, and big-wig winnings.dicksherwood
TRIBE Member
The biggest part of the problem is that those who created the online businesses were so obsessed with keeping up with the technology (constantly upgrading connections, hardware, software) that they forgot about what their core buiness was (selling pet food online, selling music, selling computers whatever)
They bought all this equipment on credit from companies like Dell, Nortel, Cisco, @home. Then when the companies that sold the products went under, so did the companies developing the technology. Those creating and selling the technology established a very questionable practice of vendor financing, where Nortel would lend hearts4you.com the money to buy Nortel routers, cables etc. hearts4you.com goes under and can't payback Nortel, we see what happens.
The Internet is all about enterprise business development now. It used to be about selling to individuals, now it's about selling to companies. If you look at initiatives like Microsoft's .Net which uses XML to allow companies to communicate instantly with vendors via the internet to update inventories, prices...that's where the Internet is going. Allowing companies that have some sort of relationship to seamlessly move information across a variety of platforms (especially databases like Oracle, MSSQL etc)via XML
There will always be places for freedom of expression, mad designing and of course our wonderful Tribe, but someone's got to pay for it all and the original 90's business model didn't work.
They bought all this equipment on credit from companies like Dell, Nortel, Cisco, @home. Then when the companies that sold the products went under, so did the companies developing the technology. Those creating and selling the technology established a very questionable practice of vendor financing, where Nortel would lend hearts4you.com the money to buy Nortel routers, cables etc. hearts4you.com goes under and can't payback Nortel, we see what happens.
The Internet is all about enterprise business development now. It used to be about selling to individuals, now it's about selling to companies. If you look at initiatives like Microsoft's .Net which uses XML to allow companies to communicate instantly with vendors via the internet to update inventories, prices...that's where the Internet is going. Allowing companies that have some sort of relationship to seamlessly move information across a variety of platforms (especially databases like Oracle, MSSQL etc)via XML
There will always be places for freedom of expression, mad designing and of course our wonderful Tribe, but someone's got to pay for it all and the original 90's business model didn't work.
you know something is wrong when you hear the clerk at a convienence store telling stories about how much money hes making off the stock market.
thats the tell-tale sign that something has gone amiss, when too many people are making too much money with little or no work.
the .com's were the largest pyramid scams ever witnessed.
them and bre-x.
Dave
thats the tell-tale sign that something has gone amiss, when too many people are making too much money with little or no work.
the .com's were the largest pyramid scams ever witnessed.
them and bre-x.
Dave
It wasn't a fad..
Micheal Moore put it best. Paraphrasing him, he used the example that at the beginning of the 20th century, there were over 150 car manufacturers due to every mom & pop startup trying to get a piece of the new and freshly lucrative market. Now today out of that amount, the US has 2 auto manufacturers. This is the same thing that's happening with the Internet, it can only support a certain amount of business economically and there were just too many people trying to jump on the wagon. It's normal for any new business.
Micheal Moore put it best. Paraphrasing him, he used the example that at the beginning of the 20th century, there were over 150 car manufacturers due to every mom & pop startup trying to get a piece of the new and freshly lucrative market. Now today out of that amount, the US has 2 auto manufacturers. This is the same thing that's happening with the Internet, it can only support a certain amount of business economically and there were just too many people trying to jump on the wagon. It's normal for any new business.
Many .coms failed because their business models were based primarily on technology. While many of the ideas were good, the business acumen was lacking. Technology, for the most part should be the enabler, not the raison d'etre. Many of us have heard "Wow, now its on the internet.
They're going to make a fortune" - delusion #1.
The internet is only a channel and way of connecting systems.
Its kinda like the telephone but with visual features. It has to be used to connect people to other people and info and it's in this process that most of the .coms failed. The internet is completely disposable. There is rarely person-person contact.
If you don't like where you are - you just click out.
Micropayments will be the next Ecommerce revenue model...the ads just aren't footing the bill.
Go to www.useit.com
....if anyone is interested in Internet and EComm trends
what happened to the 3rd?
as OTIS said, this is a newly found marketplace that is [millhouse]radically[/millhouse] different than anything seen before. the business models are not yet defined and this will take time.
companies like eBay, amazon.com, yahoo! are trying to define and exist in this new market and for what it's worth, they are doing a very good job. they are losing / have lost a lot of money mostly because they realise that everything has to be BIG in order to survive in innerweb land. the infrastructure is huge ... akin to trying to setup a 100 car/hour manufacturing plant to handle the thousands of customers that come to your door every day.
give it 5-10 years, and as long as the corporate world doesn't completely take over content and the pipelines it will be a very interesting place for the global marketplace.
--craig