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Technology Stocks : OnSale Inc.
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To: Mark Fowler who wrote (1158)6/13/1998 2:32:00 PM
From: Rob S.  Read Replies (1) of 4903
 
It's interesting to see what changes are ocuring: e-Commerce has grabbed the spotlight and the search engine companies have announced that they will provide shopping malls and auction sites of their own. Of course these are the same guys who make the bulk of their revenue by selling advertising to the other merchants and companies on the web. Its as if the New York Times set up their own stores, movie theaters and malls and used their publishing empire to undercut the competition. And now Onsale has followed the logical course by selling advertising on their site.

Advertising is already over a one billion $ business on the internet and is expected to grow to about $5 billion in just three years. That is about 10% of the cost of goods sold on the internet. Because the margins for e-commerce are so low, typically 5% to 20%, the advertising revenue can be a significant portion of the profit.
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