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SINGAPORE (AP) - Internet commerce companies and their wildly popular stocks will have a hard time surviving, media magnate Michael Bloomberg said today.
''Most of these companies will never have earnings. They just can't survive in the real world,'' Bloomberg told the American Chamber of Commerce in Singapore. ''A lot of these Internet stocks are not formed as companies, they're formed as stocks.''
Bloomberg, founder and chief executive officer of financial news provider Bloomberg L.P., likened Internet stock trading to the art market. The stocks' value was based largely on whim and publicity, rather than the concrete value or earning potential of their companies, he said.
''If you want to look at a regular stock you go to either a financial analyst or an economist. If you want to value Internet stock, you go to a psychologist or publicist,'' Bloomberg said.
E-commerce, or selling goods or services over the Internet, has inherent pitfalls, Bloomberg said. The ease and low cost of access to the network would make it difficult - and massively expensive - to hold customers, he added.
He mentioned the well-known Internet bookseller Amazon.com as a prime example.
''There is no reason why anybody here couldn't go into competition with Amazon literally by this afternoon,'' he said.
Amazon will have to market itself hard to stay on top of competitors, he said, predicting that ''the cost of doing so is, in the end, going to keep them from ever making a lot of money.''
Founded in 1995, Amazon.com has yet to make a profit as it spends freely to advertise its site and expand offerings.
It is the Internet's top seller of books, music and video. In recent months it has expanded into auctions and greeting cards, and has invested in the online pharmacy drugstore.com and Internet pet store Pets.com.
Bloomberg, who founded his financial information empire in 1981, is estimated to be worth $2 billion. <<
AP-NY-06-23-99 0558EDT |
