SINGAPORE, 15 June 2000 -- The Internet frenzy, over the past two years, created more B2B portals than there were legitimate business surfers on the net.
Latest statistics show that almost 98% of the Internet companies suffer from lack of funding or generate losses -- much less break-even. In reality, the prospects seem bleak.
Today, venture capitalists are reassessing their investments in internet start-ups. Money is no longer forthcoming. A sound business model, management experience or domain expertise would not make it any easier either.
The profit objective remains prime
Hence the need for dot.coms to propose a more down-to-earth business plan, one focused on generating real money - here and now.
A notable example of a moneymaking Internet venture would be eBay. Emulating the success of eBay, many such Internet exchanges began to proliferate.
Here in Singapore, such Internet exchanges are being launched on a weekly basis. Notable dot.com companies include Xponet.com, a print industry exchange; mypropertyhub.com, a property site bringing together not only buyers and sellers but also agents and agencies; and most recently, asiapapermarkets.com, a rather large exchange with the capacity to cater to the pulp and paper markets in the whole of Asia.
Obviously, the trend is towards creating larger and larger Internet businesses. Again, the trend does not stop here.
Inter-networking leads the way
The age old success story, network, network and network some more remains relevant for the "New Economy". Networking is a catch phrase that Internet businesses are quick to learn and adopt.
Networking at the internet level created businesses known as 'Meta-Networks', sometimes with the help of Internet Holding Companies. Such companies have been around for over half a decade. Examples include CMGI (1994), Softbank (1995), ICG (1996), and more recently Pacific Century Cyberworks (1999).
Their capacity to dominate the business scene has been recognized but their full potential is yet to be seen. These companies' market capatilization run into billions. CMGI, for one, has a market capitalization of over US$17 billion, with over 70 partner companies.
Today, a similar value proposition has been made by a Singaporean venture, Internet Technology Group (ITG). Its key strategy is to integrate its portfolio of businesses, known as 'Partner Companies' into a collaborative network.
It would provide guidance and operational support to its partners and promote business synergies between the Partner Companies. The ultimate objective - to create a highly effective business model for the New Economy worthy of the name 'meta-network'.
ITG is supported by a host of companies which include Ossia International and other yet to be named entities. To date, it has under its ambit some 26 partners and subsidiaries.
The question is, are the relatively small portals, dot.coms, B2Bs or B2Cs going to be a thing of the past. Value business propositions may only be in 'meta-networks'.
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