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In the last few
years, we all witnessed an explosion in the virtual world as people
adopted the Internet as a tool for communication and transaction.
Consequently, investors and entrepreneurs rushed to the negotiating
table to start web companies. Deals were closed left and right without
much due diligence because the opportunity cost of missing out on
the Internet wave outweighed the risk of financing as many e-commerce
projects as possible. Most of the funds raised went to marketing since
brand building became the primary goal of every start-up. With so
much money available, online companies tossed advertising funds into
practically every corner of the globe.
The year 2000 marked a shift in this story with high profile start-ups
going bust one by one. Overvaluation and sporadic 'marketing spend'
failed to yield sustainable and attractive returns.
Today's financiers and e-entrepreneurs are much more cautious on fund-allocation.
Nonetheless, marketing and business development
remain as the two critical factors of success for today's budding
e-businesses. |
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©
2000 Clyent Internet Architects
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