Recession hurting e-business

I have to say that in Australia (don't shoot me) this slow down is just about the best thing that could happen.

Why?.....

There are so many start ups, e-businesses and big Web houses that are simply being run into the ground by bad financial management (take for instance a place I used to work at; they suffered a slow down and couldn't meet their outgoings.. why? they were too busy buying BMW's for themselves to think about running a business).

As soon as there is a lul in work or consumer spending or something , they simply dont have the liquid assets to cover all their staff- particularly contractors. This Slow-down, is the first real darwinian culling in the Internet age.

Regards business prospects, the Aussie market for the web is still quite strong: There are still very big contracts, and millions of small contracts out there. The e-business side of things is still strong, whilst we haven't seen as big a take up as America or Europe in e-tailing and customer support, people are increasingly utilising the web for their needs

I think the best way to say it is like that IBM ad at the moment:

Quote:
Venture Capital didn't dried up, it wisened up..

this can be said of all aspects of the web, be it business, design etc

Yeah, it will change things. The companies that were giving products away to gain marketshare will now be forced to rethink their positions and ...gulp... try to make a profit. As some of the more agressive companies go under, it will make it less competitive. But there are always the new guys out there trying to make a name.

Detox, I am not so sure about Venture capital wisening up. They only wisened up when the stock prices went south. They will be back investing in garbage companies.

Two guys I know with very good links with V.C funds and fund managers around the world have been saying there will be a shift. I trust these guys judgement, as they helped organize funding for the china dam's and the new Hong Kong Airport, along with countless e-business ventures.

I don't know, maybe this is just in Australia. I suppose you can't change the nature of the beast. But in an economic recovery, fund managers at the very least are more wary of bad investments, particularly when the mistakes of the past are so fresh in the mind.....

All good points.

But I'm also interested in how you think (or have experieneced) the down turn has effected or will effect the smaller non-VC web site owner.

Many of the webmasters who come here are sole props or have small companies, either selling products or providing hosting and design. How have these companies been effected? Or do you think they will be impacted.

I think it hurts webmasters who run sites that make money just from banner ads. Many companies just can't afford to advertise online (or they don't want to because of the crappy click through rate), which has 'caused these sites to suffer. I know one person who was making $8,000 per month in banner ads, but he's now only making $500 per month. It hurts.

Three people out of our team of five (including me) have their own design companies, which they work on outside of work. None of us have experienced any down turn in demand for small to medium projects. The larger companies, yes, but they have bigger overheads and therefore need more money in the door to stay afloat.

Any business on the net will see a slight downturn, people are worried about job security so they hold off on spending. But really I think that is a cross the board, regardless of whether the business is on the web or not. Personally it isn't that bad yet, might not get worse.... (in Australia at least)

Consumer confidence figures (US) rose in March, so if that holds steady, you guys have already started to strengthen. We obviuosly take our lead from the US and Europe, if they strengthen... so do we.

I would say all banner-ads based sites have suffered big time.

As for small retailers - I don't know. They say that people buy more and more on the net so maybe these businesses are doing better.

Web design - a sharp fall of prices over here in Israel. The reason is that in the past year or two everyone who couldn't be a programmer went on to learn some sort of webmaster/web designer course and there are tons of those around. I run a small web design company (just me with a couple of freelancers) and I get people knocking on my (virtual) door everyday looking for a job. I've even been offered more than once to hire people that would work for me for free for a few months!!! When things are as bad as that it's no wonder prices drop down.

I think the dot-com deaths in the last six months have at least one good thing. They eliminate some of the weaker, more fragile sites with no real business plan and makes the web sites who make it through this stage (when will it end?) stronger and more experienced for the future, thus making a better web site. Only the strong survive.