An expanded Web version of segments seen on CNN
Even experts still puzzling out how-to's of Net business
March 27, 1998
How do you make money on the Web? Good question, experts say
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.
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."
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. 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. 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." 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. 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.