Internet Value – Business Sense

1999-04-14

Nobody really knows what the Internet is worth, but whatever its value, companies which have successfully invested in the Web are reaping its rewards to the detriment of those left behind. At the Massachusetts Institute of Technology yesterday, Bill Gates underlined his predictions of ubiquitous Internet usage by saying that “Billions of dollars of market valuation are based on knowing how quickly this [Internet uptake] will happen.” Organisations unable to exploit these cash flows are proving the losers. For example, Merrill Lynch came in 12th in the US last year, down from 8th in 1997, relative to other securities companies setting up Internet IPOs. Merrill blamed the “less-than-constructive” advice of its (former) Internet analyst, but it must bear the cost.

Smaller companies, too, are suffering as they find that the Web does not wait around for the late arrivals. Bob Geldof’s flight reservations site deckchair.com, announced last September but not launched until today, will pay the price: the unique features it touted six months ago, such as flight availability, personalisation and online booking, have become standard on a wide variety of travel sites. The Internet is a club with little respect for its members: it remains to be seen whether deckchair.com is arriving too late to join.

(First published 14 April 1999)