Apocalyptical Confusion

Ok, there seems to have been some confusion over my opinion that the digital industry will flourish as the economy takes a down-turn.

My original comments related to online marketing.

Alongside my otimistic agency views, I’m also of the opinion that other internet-functioning businesses could be hit pretty hard. Examples:

E-Bay issued a stark warning that profits could be down this christmas – this last quarter saw revenue rise by 12% ($2.12bn) which was lower than analyst predictions. A quick recalculation later and the number-monkeys expect total 2008 revenue to be between $8.53 – $8.68bn (still more money than most people will ever see). 

To be more competitive, Amazon has slashed it’s free delivery qualification costs from £15 to £5. This means that over 90% of their products will be delivered for free. I personally think this is just common sense – leading industry experts have long-advised companies to play around more with free delivery.

Google’s market-share has dipped a teeny-tiny bit. My cynical side says that this explains why they’ve suddenly backtracked on their long-standing policy not to allow gambling advertisements. Now, potentially generating £millions more with this hypocritical move, as we have already seen a quarterly increase on profit this year. I’m sure we’ll see Google beginning to strangle the competition again.

Social networks are struggling to generate viable income. Which is no big secret. Sadly though, this is directly affecting people working in the industry, as they become statistics in the economic downturn. The most recent victim is Hi5, the third largest global network, where it was announced this week that around 10-15% of the workforce would be laid off. Other companies being affected include start-ups and software; again, the most recent casualty being Jive.

When the whole world is suffering economic crisis, it’s obviously going to affect the world-wide-web. But to reiterate my original point; some parts of the digital industry will do well from the misfortune of others. Yes, it will get increasingly competitive, but with decent strategy and user-confidence, those who succeed will be very apparent. Whilst we’re seeing companies collapse every day, I hardly think this is the end of the internet.

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