Internet Businesses at 10

The Economist writes:

In their brief history, most online businesses have found profits harder to come by than publicity. Many early stars crumbled to dust (remember Webvan, and, and Amazon’s string of losses (which touched $1.4 billion in 2000) only turned to profits in 2003. Though quarterly results this week from eBay, Yahoo! and Google show their already healthy profits to be growing strongly, none of today’s online successes feels able to rest on its laurels. Each is trying to move beyond its original source of revenueselling books and an ever-growing list of other goods (Amazon); auctions (eBay); online advertising (Yahoo!); and contextual advertising (Google)by adopting the successful strategies of its rivals.

What might drive the next round of e-commerce business models? Mr Brynjolfsson says that two new technologies are already throwing up opportunities: mobile access to the internet and RFID tags, which enable the non-stop monitoring of the whereabouts of goods. Wharton’s Mr Amit says that the old-fashioned offline world was one where producers said to customers: I’ve made this; buy it from me at this price. In the online world, customers are saying, I want this; sell it to me at this price. That is why these internet birthdays really are worth celebrating.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.