MERCER STUDY FINDS SOME INTERNET NICHES ARE ABLE TO MAINTAIN THEIR VALUE DESPITE RECENT DOT-COM MALAISE.Despite widening losses, deteriorating cash flows, and increased difficulty in raising capital, a few Internet industry sub-sectors are retaining or even growing their market value this year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a study by Mercer Management Consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects . The consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a also found that a fundamental redistribution of value is under way in the Net economy, helped along by declines at the great majority of organizations within six surveyed segments. Mercer's newly released "Internet Economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. Stock Market Value Flow" study analyzed more than 400 Internet organizations in the United States and over 200 in Europe. There were a few bright spots to report. For example, Mercer found that infrastructure hardware companies in the U.S. as a group added 3 percent in value so far this year. The security software segment was able to hold its value. Far more prevalent, however, was the evidence of widespread shareholder value destruction, including a 70 percent loss this year among B2C e-commerce B2C e-commerce The conducting of commerce by companies, government agencies, and institutions with consumers over the Internet. Amazon.com is typical of a company engaged in B2C e-commerce. companies and more than 80 percent losses incurred by B2C (Business to Consumer) Refers to a business communicating with or selling to an individual rather than a company. See B2B. portals, B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business marketplaces, and Application Service Providers. According to Mercer Vice President Tim Byrne, the year 2000 will be remembered as one in which wealth was redistributed in the Internet space. "The infrastructure and software segments in the U.S. are increasing their share of value, while B2Cs, B2Bs, ISPs/ASPs, and consultants have lost share," Byrne says, adding that "value is rapidly flowing to the few remaining profitable companies." Indeed, the Mercer study found that as of February of this year, only 12 percent of Internet companies were profitable and that they controlled 38.5 percent of the sector's market value. By November, about 14 percent of Internet companies were profitable, but their share of the value had jumped to more than 56 percent. "Those Internet companies able ultimately to create shareholder value will be the ones that challenge their own business design," Byrne says. "Venture capitalists still have opportunities within the Internet sector, but they'll have to dig a lot deeper to find companies with profitable business designs," Byrne says. For more information about Mercer's "Internet Economy Stock Market Value Flow" study, please contact Howard Bailen at 212-345-7506. |
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