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Strategies & Market Trends : The Millennium Crash
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To: Yorikke who wrote (5159)6/6/2000 11:27:00 AM
From: pater tenebrarum  Read Replies (1) of 5676
 
Yorrike, my point in this case was specifically that the b2b internet sector was extremely overhyped w.r.t. profit potential. it's simply not true that these companies are needed as middlemen that will get a cut out of every transaction. this type of profit is precisely what the internet tends to compete away. remember ONSL in the b2c space? in the end they completely dispensed with earning a profit from their sales, instead relying completely on advertising income (imo another dead end, btw.).
to come back to b2b, a software company that sells enabling software for b2b web sites is of course subject to different valuation criteria than a company that gets a cut from every transaction made on such a site. the latter is imo a pipe dream.
generally speaking the long term ramifications of the internet for the economy have imo not yet been entirely grasped by the market...all people now see are the cost savings and additional efficiencies it brings about. the fact that it destroys profit margins is rarely discussed...the same goes for the fact that it brings about massive changes in the distribution infrastructure, which will definitely affect the existing system to a great extent...just as the car destroyed a large part of the agricultural economy at the time of its introduction (everything to do with horses went down the drain), a period of creative destruction has been unleashed with the introduction of the internet. it's of course great for the consumer, but the transition period from the old system to the new will bring about upheavals that are imo underestimated right now...
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