Has the dotcom bubble burst?

[Michael]

Hi

We've found that we are gettin steady traffic to our site, a lot of which are people representing new or small businesses that go on to use our service.

I keep reading though that the dotcome bubble has burst and yet at the same time more and more people are working from home in internet related businesses? Is this simply because these days almost all business at some stage is an internet business?

It seems to be a confusing message....

Is the dotcom going through a revival or has it just found it's true purpose as a support / marketing tool?

[DuaneJackson]

Hi Michael

The bubble burst years ago.

I think the internet related industries are now maturing and have entered a new phase. The years of companies being valued at a small fortune based on the concept rather than on revenue is certainly over. Thankfully.

[Coding Monkey]

Also, I'm finding that many companies who never saw the potential of the Internet and spent £50 on their entire website are now spending thousands to redo their brand and realise the importance of their website for marketing. It's like a perpetual leaflet that you can update for free.

[puravida]

Advertising companies are reporting drop in spend all elements of the advertising mix apart from online whch has INCREASED.

[Astaroth]

Just because the bubble has burst doesnt mean that the internet is not a viable option for companies (in any possble terms; markteting, sales, communication channel etc). As Duane says, the bubble burst because someone would have an idea, knock together a basic website and almost instantly the "company" was valued in the millions. During the dotcom peak the "million dollar homepage" wouldnt have needed to exist as the concept of selling pixels off for marketing in a grid itself would have valued the company much higher than the revenue that it was ever going to generate ($1m)

[gary]

As Duane says, the bubble burst years ago! It's not even relevant anymore, except perhaps as a heady reminder of the chaos a gold rush can bring!

The internet is more than a viable medium for business - for many companies it is their business and there are a lot of very successful online businesses now that have been built on traditional business principles, which should have been the case from the beginning.

I think however there should be some caution in getting too excited about the current rapid growth of online sales - the market as it is now is only just building a base and of course because it's new it's going to grow quickly. It won't be long though before we see a levelling off, but I suspect we have a couple of years at least to go before then.

[Michael]

mmmmmmm gold rush!

Yeah i see what your saying there does seem to be a fad for online sales at the moment....

[pierce.lynch]

There is still a demand there from the aspect of service providers, but obviously not *as* great as it used to be those years back.

The market is so saturated with high levels of compeition now, which has resulted in massive price crashes due to that fact everything comes down to price in this market.

Thankfully - there are still a few, what could be considered 'niche' markets left as technology does improve. But they are definately not as profitable as they used to be - but there is still a demand there so its not all that bad from a business point of view.

[Steve Roberts]

I can tell you that there are a lot of business buyers out there who are very interested, and will pay a premium, for good internet based companies. Obviously the first bubble burst a few years ago, but that was because it peaked far too early and the market backed the wrong horse. Nowadays there's serious money to be made, but it's less about speculaton and more about pragmatic success. The dramatic growth of broadband is largely the cause of this.

Trust me when I say this (because it's what I do), if you want to develop a company and then sell it for a LOT of money, then develop a profitable, borderless, internet based company. Sectors of particular value are: new technologies, environment, power generation, medical.

[SillyJokes]

Trust me when I say this (because it's what I do), if you want to develop a company and then sell it for a LOT of money, then develop a profitable, borderless, internet based company. Sectors of particular value are: new technologies, environment, power generation, medical.

So not Fancy Dress and Party Goods then? ;)

[DuaneJackson]

or bookkeeping software designed for you not your accountant? : )

[Steve Roberts]

or bookkeeping software designed for you not your accountant? : )
That is most definitely of interest. Reason being, with software the GP is usually very high because most of the cost is R&D related. As such, once the product is developed it costs virtually nothing to deliver (unlike, say, furniture or whatever). Equally, when version two comes out there is scope to sell this, and/or a subscription which gives ongoing revenues. Sorry if I'm teaching grandma to suck eggs! My point is, if you got a niche product, internet based and an established and growing client base, it would most certainly be of interest to a large software company.

[DuaneJackson]

It's very true. Now most of the development is done, each sale is virtually all profit. There's very little additional resources needed with each new user.

And as it's subscription based and online there are no delivery costs and a constant revenue stream.

I think we've got it all right. It's just a matter of marketting it to build up the customer base now.

[Steve Roberts]

It's very true. Now most of the development is done, each sale is virtually all profit. There's very little additional resources needed with each new user.

And as it's subscription based and online there are no delivery costs and a constant revenue stream.

I think we've got it all right. It's just a matter of marketting it to build up the customer base now.
If I were in your shoes, I'd become a 'stone in the shoe' to the likes of Sage. As such, this will give you what we call, "irritant value". If someone like Sage approaches you say something like:

"I had planned on selling the company to a large strategic purchaser who would take it to the next level. As such, Mr Sage, you will need to make me an offer I can't possibly refuse. Equally, if you don't buy me then you will have a far more serious competitor on your hands".

Such a negotiating posture is pretty effective I've found. However, before you get to that position you'd do well to have enough clients that you occasionally appear on their radar.

[DuaneJackson]

Yep, that's kinda the plan. We're deliberately keeping off their radar for now. I got some good advice from a partner at a multi-billion dollar US firm that are experienced in competing with MS and other big firms and they've suggested we creep up behind them so that by the time they spot us we have a decent foot hold. We've just about got the foothold now.

Sage would be a logical buyer for us, and thankfully I have a very well respected and experienced partner in the business now too. I'd hope that'll help if and when it comes to negotiations.

Thanks for the advice, it is very useful and much appreciated. Feel free to give me any more that you want to : )

[Kevy]

There is lot confidence in dot com at the moment, if you see what has happened in the past few months, Itv buying friends reunited, News corp buying MYSPACE.COM , ebay payin billions of dollrs to get Skype ,Daily mail buying Rightmove.com, it all goes to show that business has faith in dot com, with more people getting broadband connection the future is bright.

[Michael]

I agree thats why I posted the thread as it seems to me that there has definitly been a resurgance of the dotcom business. Lets hope this bubble doesn't burst!

[Azam.net]

As long as businesses are based on sound principles, it won't burst again. There was too much hype and hot air six years ago, too many smart-ass talkers saying they'd reinvented business models. This time round, as has been said above, companies are making real money.