posted
So I was thinking tonight, while listening to a recording of "The Salmon of Doubt," a final collection of Douglas Adams' writing, about the "E-Commerce Bubble" he was so concerned with when he died almost a decade ago.
It's common knowledge that the bubble "burst." Over-capitalization of technology and IT firms with no real sense of what their profit possibilities or actual profitability were definitely went under, and a lot of people lost their jobs in the short term. What interests me is whether or not (or maybe the better question is *when*) our technology sector overcame this shortfall and really developed into the marketplace that the bubble was predicting would be there. Surely, more money is spent online, and by a vastly larger amount, than companies were predicting 10 years ago, even as they over capitalized and went belly up. But is it the same marketplace as, or a better one, or just a different one than the market was predicting and hoping for during that time? Has E-Commerce failed in a fundamental way that was not expected before the bubble, and if so, are we yet to approach a new horizon in E-Commerce. It even seems a dated word in the end of this decade- no one says E-Commerce anymore, because there can hardly be said to be much of a distinction between commerce in general, and commerce that occurs over the web. Perhaps the "E-Commerce" bubble was partly produced by the impracticable idea that the service industry would move online in a way that was utterly useless, but perhaps it was just a thing ahead of its time... Any bubble experts out there who would care to chime in?
Posts: 9912 | Registered: Nov 2005
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posted
Commerce is commerce, online or not. JCPenney's still has one of the largest online presences in the world, believe it or not, and profits last year were up 27% on top of high teens and low twenties of gain the previous 4 years.
All bets are off this year, but that is hardly an online failure.
Posts: 15082 | Registered: Jul 2001
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posted
I doubt the current size of the market has exceeded some of the wild pre-burst predictions.
My employer (one of the bigger e-commerce successes) sometimes talks about our current share of retail spending. It's a miniscule percentage. But it's clear they are pointing out what they think is a huge remaining opportunity. I'm absolutely certain that some jackasses were predicting that by 2010 e-commerce would be as big as brick and mortar.
"But is it the same marketplace as, or a better one, or just a different one than the market was predicting and hoping for during that time?"
Nobody knew what they were buying back then. Domain names, brand recognition, and high membership count don't automatically translate into money.
Investors now are just more aware of what the Internet is good for, and how Internet based businesses can work. The bubble was a result of people desperately trying to jump on a bandwagon without checking where it was headed.
Posts: 4287 | Registered: Mar 2005
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