Is the Web a Money Pit?

By SKillBot February 25, 2000 10:53 AM

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Have you ever wondered if the $2 mil E*Trade spent on their super bowl ad will ever pay off? Or if amazon.com will ever turn a profit? There's a very many .com companies operating in the red, which is starting to make investors worried.?Though it's nearly impossible to make a correlation between television ads and sales, many places are experimenting with coupons and promotions, which make it very easy to track the results of advertising.?But no one knows for sure if any of these businesses will become profitable.?The ad industry seems to be doing well though.?This is a really good article, by the way.?Read more...

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Minor addendum   reply

Posted by sKillBot (travis@pulley.org) on February 25, 2000 1:29 AM

E*Trade spent more than $2mil. They had three spots and halftime sponsorship. But if you saw the commercial, you know what I mean.

Going .COM Crazy   reply

Posted by Acheron (denny@dtheatre.com) on February 25, 2000 6:17 AM

These days, everybody is launching their businesses online, and while they might get much more business than they do(or would) in the "offline world," they're virtually all losing money. Never did they have to compete with corporations spanning the globe. For many of the businesses, they were pretty localized to one area in the country, and only had a few other businesses to compete with. Now that's greatly changed. 

Many of these online warehouses(Buy, Amazon, OnSale, etc) are selling their stuff at cost or maybe a little above it, and while they generate more sales because of it, they are still losing money in alll the excessive advertising, cost cutting, and diversifying that they do. Most of the "big time" online resellers will go public if they haven't already, and while the Trading Public drives up the price of the stocks of those companies, they can continue to operate as they do now (that's one of the reasons Amazon is still around today). Once the fire in the technology sector on Wall Street fizzles out, many of these companies will go under. Most of the big companies will still be here in a few years, but I'd be willing to bet a lot of companies get out of the online arena, or at least open up an "offline" business. They'd have to, we can't have a bullish market forever, and that's what they're relying on now. The competition is too fierce.