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Even experts still puzzling out how-to's of Net business

Internet profits
How do you make money on the Web? Good question, experts say  
March 27, 1998
Web posted at: 10:21 a.m. EST (1521 GMT)

From Reporter Rick Lockridge

(CNN) -- The Internet has proven to be the wild, wild West of the business world. Some cowboys of commerce have ventured out to the new frontier and made a quick killing, while others have been ambushed and shot down, as investors learn that the Internet plays by its own rules.

So if you're hoping to make money in business on the Internet, the question "How?" is a valid one, perhaps best posted to some of the world's top Internet entrepreneurs. At a recent meeting, they shared what wisdom they have on making a quick Web fortune.


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Unfortunately, much of their insight is of little practical use. How do you make a wad on the Web? "That is a very good question," said venture capitalist Fausto Boni, laughing.

"None of us really know very much, really, about what we're doing," said Softbank Internet Advertising executive Gordon Simpson.

Added Internet venture capitalist Esther Dyson, "It's not the easiest way to make money."

Extinct site
Fossils of former Internet business sites now litter the Internet  

Fossil remains litter Web

The fossil remains of now-extinct businesses, testament to Dyson's statement, litter the Internet. Their founders once thought they would make a killing with their clever Web-based plans. Instead, they folded, either because nobody ever found their site or because those that did never pumped any money back in.

The Internet is one business venture where the rules of success are still being written, explained Simpson; once Internet business passes its infancy, mogul wannabes can look at past examples for a sound business strategy. icon 113 K / 11 sec. AIFF or WAV sound

Internet commerce, also still in its infancy, must gain a foothold among wary shoppers, many of whom are reluctant to send their credit card numbers over the Internet. Boni said he considers their reluctance ill-founded and nonsensical; you give your credit card information out over the phone, don't you? Internet shopping is no more risky than phone shopping, he said. icon 118 K / 11 sec. AIFF or WAV sound

Nonetheless, experts say, there are some areas of Internet commerce that may be worth investing in. Potential investors should consider businesses like financial services, stock trading, and travel, where there are frequent transactions.

The transactions deliver your cash flow, explained Michele Appendino of Net Partners Venture Capitalists, and allow you to realize a profit immediately, since "each time people use the service you make money out of the transaction." icon 131 K / 12 sec. AIFF or WAV sound

But no matter how crowded the Web gets, some investors believe there will be great opportunities for little mom-and-pop operations to succeed alongside industry giants.

For 200 years, Dyson noted, businesses thrived on the principle of mass production and automation. Today, however, there is more room for small-scale business, as consumers demand diversity.icon 145 K / 13 sec. AIFF or WAV sound

So take your best shot, but be aware of the high casualty rate. And remember what the experts say: On the Internet, it takes heart, smarts and luck to make a buck.


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