Yea, yea, I agree with those sentiments - there is real danger here that is marked by the wild growth. I think we agree. The thing driving these stocks is good 'ol greed and as long as sales boom, a closer look under the hood is easy to avoid.
What would you think is the "fundamental rule of business" that can best be used to describe this evolving situation? From my training and experience I would guess that it is "Easy money draws intense competition" or something like that. For the next few years it will be dramatically obvious that ecommerce is growing like no other phenomena in world history. That's "BIG, REALLY BIG".
It's easily comparable in scope of change that it will cause as when the railroad was first laid across America. That changed the way people settled the land, developed industry around it, and the nation prospered. At the time few people speculated that many railroad companies would end up at or near bankruptcy as they each fought over business and rates went lower. The real beneficiaries of the railroad, as I believe will be the case with the Internet, will be the consumers and utilizers of the communications (transportation) mechanism. In the final analysis, there are fewer barriers to competition and much greater enabling facility to promote it than conventional channels of sales and distribution. In the end, the Internet companies will be much more like rail cars that carry freight, they will become much more common and mundane and people will decide which ones to load their business onto based on " . . . what's the price? And of course you must promise to deliver it in good shape and on time." In the end, the Internet will become a fiercely competitive commodity (something that is readily availed from a multitude of sources who offer similar product, price, and place (delivery) - the 'ol "Three Ps" they teach you about in B-school. |
