Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (14121)	5/17/1999 8:18:00 AM
From: j.o.	Read Replies (2) \| Respond to of 99985

OT I second that, Donald! I am presently part of an internet startup, and it is becoming very clear that the future of website and application development will heavily involve overseas developers. Some of our development is being done in San Francisco, but other pieces are being done in the Phillippines. I am presently weighing creating my own development shop and working on a joint-venture basis with coders in India, Hungary, and various parts of Asia. Considering the very high salaries that I am paying in San Francisco, it makes a great deal of sense. I am certainly not the first to be doing this, and over time it will take some of the air out of the salaries of coders in SF, NYC, etc., and much of the profitability from the hot website development shops now going to market (unless they are also already shifting production worldwide). I would maintain that the US economy, most of the growth of which comes from the service-, not manufacturing-sector, will meet with incredible price pressures on any services which can be provided on the internet. And don't forget the implications of tax-free domiciles on the price-cutting ability of foreign firms. Imagine competing in a service industry and paying 40% tax on earnings while your competitors who have set up in the Free Trade Zone in, say, Dublin pay 10% tax. Economics will tell us that those firms will price you right out of business. For when your company produces a 6% post-tax return, they can produce 9% - and they will attract further capital while you cannot. Yes, the US will reap the highest rewards in the short-term, but it will more dramatically affect the developing economies over time. Give it 3-4 years and marvel at the results. j.o.