|
 Internet
Infatuation is Over!
Once the infatuation is over, the real relationship begins!
Published
in the February edition of Computer
Link Magazine
The year
2000 began with the continuation of the longest economic boom
in all history. Things looked unstoppable and everything was
changing more rapidly then ever before. This directly followed
the Y2K initiative that caused everyone to update their
computer systems. Although the Y2K scare turned out to be
unfounded, there was a positive result. As a nation we now
have the most updated and progressive computer resources and
networks in the world.
Over the
last few years venture capitalists have funded almost anything
to do ideas involving the Internet. The stock market responded
by valuing these new companies in a new way… based on
"future-value." Future-value, although was extremely
popular, now seems like it has run it's course & is
basically over, especially when compared to the age-old test
of measuring companies by their profits. Moving forward into
the future it seems that investors will surely use profits as
the best and primary gauge of a company's value.
Last April
the Nasdaq took a nosedive of dramatic proportions. The year
2000 will surely be recalled as "The Year of the Dot.Com
Crash." At the close of last year Nasdaq had lost a total
value of 39.3%… its largest loss ever! Well-known dot.com's
like Pets.com, ToySmart.com, Reel.com, Pseudo.com,
Pandesic.com, and Rochester's own WebPRN, along with hundreds
of others either closed down or slashed their work forces to
the bone because of lack of additional venture capital. All
dot.com companies were forced immediately to quickly become
profitable, get purchased, merge with a brick and mortar
business, or, as many did, simply shut their doors forever.
Because of this, Investor confidence in dot.com businesses has
been lost.
What's
happened lately seems to substantiate that we, as a nation,
have a love relationship with the Internet and just like many
love relationships our love of the Internet began with
"infatuation." Infatuation as defined by
www.dictionary.com:
in·fat·u·a·tion
1. A
foolish, unreasoning, or extravagant passion or attraction.
See Synonyms at love.
2. An
object of extravagant, short-lived passion.
Fortunately,
infatuation is normally short in duration and when reality
finally comes crashing down, sensibility sets in. That's just
what happened last April. We came to our senses, stopped the
madness and, like a relationship, once the infatuation was
over the real relationship began to build. Only this time it
was based on profits!
We have now
entered the post infatuation period of the Internet. The rise
and fall of the dot.coms does not, in any way, reduce the
importance of the Internet as a communication medium.
Beginning now in the year 2001 we turn the page to the new
Internet Millennium and moving forward we will be building a
sound and steady relationship with the Internet.
What we
have learned from the Dot.Com Crash is that the Internet has
more to do with doing things better not just differently.
Before the Dot.Com Crash the traditional brick and mortar
businesses were being attacked by new dot.com businesses that
were developing new business models designed to
disintermediate traditional business. Throughout the summer
and fall we watched as the dot.com's began to rapidly loose
their value. Many companies began to lay off employees at an
astounding rate and a number of large Internet names went out
of business. That dramatic change has removed the immediate
thereat to brick and mortar businesses and now has become
almost nonexistent.
Along with
the Dot.Com Crash we have seen traditional businesses stop
their knee jerk reaction to the dot.com Internet threat. We
are now seeing businesses taking a little extra time to look
at establishing a strong strategy. The most successful will be
the companies that embrace the Internet as a core element of
their strategy moving forward.
Today, we
are seeing companies analyze where they are positioned in the
big picture of their sustainable competitive advantage. They
are determining how they can integrate with their legacy
systems and simply do everything faster, more convenient, and
better. Some businesses are concerned about a downturn in the
economy. If this does occur then businesses will be forced to
rapidly adopt an Internet eBusiness to provide cost savings in
a tight economy. No matter how you look at it Internet
eBusiness is here to stay and is more important than ever.
Similar to
the positive aspect of the Y2K fiasco, the rapid changes of
the Internet have created an even more ominous competitor…
your traditional competitor armed with the new methods and
lessons of the information age. Those companies who are
proactive may be better equipped by the adoption and
integration of Internet capabilities.
The
"extravagant, short-lived passion" with Internet has
ended and we are now poised for exciting times and this is
when things are going to get serious. It's not just about
doing business in new ways, but more about doing business in a
better way!
|
