Internet economy softens the downturn

Implications: 1.  A downturn is the US alone can has less impact on web-based companies. 2.  US is the leader in the online community

Analysis:

The growth of the US internet business segment since the end of the dot.com bubble has had the effect of creating a global business model.  This model is unlike the large multinational corporation of the past that were required to have a presence in countries around the world in order to grow its business.  The internet world being virtual can grow to global proportions without the physical barriers of local presence.

The fact that global distribution companies are already in place means that products can reach the end customers anywhere in the world for most internet company.  The challenges for the internet companies is more of getting name recognition in economies around the world. 

At first you might think that this would require a local presence.  But even marketing and advertising for internet companies has largely moved online along with its business.  So the speed of business growth is a much more efficient online because of the virtual nature.

This raises the question of what can CIO's do to help their businesses move more online.  From 2001 to 2004, there had been a bit of a backlash in some areas around the internet economy at some more traditional companies.  This article raises the opportunity that it might be time to push forward again into an accelerated online capability.

One simple approach would be to forward this article to other executives (and other articles like this one).  It would also be a good opportunity to create a strategic initiatives within the company to reevaluate the business model and see if there are online opportunities that have been missed or could be expanded.

The other thing to realize is that it has gotten a lot less expensive to go online.  For example, I sit on a nonprofit board that used to spend around $5K per month on the website, email blasts, and did not have a ecommerce website.  In less that six months, I personally have setup an email blast solution, an online store, and a survey solution (in my spare time).  We spent less than $20K to have a content management solution implemented for our website.  And now, we spend roughly $300/month to do more online than we did in the past.  We also hope to generate enough revenue from our online presence to more than cover our costs.  In less than one year, The "IT" costs have gone from $60K per year to a revenue opportunity.

This could be one of those times when we in IT reevaluate the ROI of being online as more than just a technology.  It is a way to reduce the company exposure to a US downturn and a way to become more global.