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Has Internet Business Become Relevant for Stocks? (Part 2)

25 October 2007 - Features - Editor

Has Internet Business Become Relevant for Stocks? (Part 1)

Threats to Corporation Stocks from Small Internet Business

The nature of competition and the pace of market penetration are other new threats to entrenched stocks; conversely, they are exciting opportunities for venturesome capitalists who aim to make quick tracks with smart investments. The Internet helps new entrants and relatively small players in ways and at rates, which were not possible earlier. Investors have to take note of this because new kids on the block could replace some blue chip stocks of yesteryear.

Online communities, products, which are sold exclusively through this medium, and services, which have been created exclusively on the World Wide Web, make for some of the most amazing success stories known in business. Music is another example of how the medium has revolutionized a traditional business, creating new winners and revenue models at the cost of old ones.

Information Technology, which was once no more than a management function, has become an industrial sector of repute in its own right. Investors need new skills to spot such opportunities in time, and to purchase the right stocks.

The rules of the investment game have changed!

Book publishers provide demonstrative examples of how conventional enterprises can adapt to the Internet in order to use the new medium for their business aims. Executives can forge new strategies so that the Internet works to their advantage rather than help competitors take away shares. It is a matter of understanding the technical possibilities offered by the Internet, and changing delivery systems to meet new customer expectations. Investors must start asking management teams for appraisals and plans of action with respect to how the World Wide Web affects each business, and how each company plans to deal with the emerging situation. It would be naïve to think any longer that search engines and software engineers are the only ones to benefit from the Internet phenomenon!

Competitive pressures on cost structures, and brilliant new ideas will continue to spawn electronic brands, which are born and live entirely in the virtual space. Other businesses will use the medium in varying degrees, combining their investments in it with processes and infrastructure that have always existed. Few companies can afford to remain completely isolated from this global means of electronic communication and trade.

 


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