UK: Techknow - The people and products shaping your future.

UK: Techknow - The people and products shaping your future. - In most industries Amazon.com would be regarded as a young company Yet the leading online retailer is already being referred to as a 'first generation' net business. The title implies a 'next

by ROGER TAYLOR.
Last Updated: 31 Aug 2010

In most industries Amazon.com would be regarded as a young company Yet the leading online retailer is already being referred to as a 'first generation' net business. The title implies a 'next generation' although nobody can say who or what this generation will be. But as Bill Gurley, one of the most influential venture capitalists in Silicon Valley points out, e-commerce has only started evolving.

Sites which do little more than put products for sale on web pages are regarded as most vulnerable to change. Web visionaries - of which there is never a shortage - will tell you for nothing that such crude reproductions of the 'bricks and mortar' shop front will seem very old fashioned in the not-too-distant future.

Shopping robots - search engines which seek out the best deals on the web - have disappointed in the past. But new efforts to improve performance by companies such as Excite, the web portal, are bringing them back into fashion. Manufacturers are also developing online selling tools which would enable any web site to set up in business as a retailer. A growing number of services such as BizRate can help consumers pool information on which products offer the best value. They are still in their infancy.

But they raise important questions about how much value companies such as Amazon.com and eToys add to online shopping.

Another source of pressure on established online retailers is the rapid rate at which offline retailers are moving to the web. Softbank, the canny Japanese operation which started out selling software but has made its real money with investments in the internet, appears to be ahead of the curve with its latest venture. Its new $1.2bn fund will invest not in internet start-ups but in joint ventures with existing 'real world' retailers.

Web experts say that that first mover advantage counts for all and that offline retailers move too slowly to ever grasp the opportunities of the internet. Softbank is betting that the expertise of these businesses will prove to have just as much value in cyberspace as on the high street if it can successfully be adapted to the new environment.

Getting to present your ideas to a venture capitalist can be worth millions if you hit the right notes. A recent charity auction at a conference in California saw bids of up to $33,000 for one hour with Bill Gurley of Benchmark Capital, the leading venture capital firm. But the evening's highest bid was $53,000, paid by internet entrepreneur Sunil Paul. He got the chance to push Meg Whitman, head of eBay, the internet auction business, into the pool.

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