Diminishing Returns On The Web
from the going-down-down-down dept
We’ve already discussed how web businesses are really like perishable goods, so now we find out that there are diminishing marginal returns on the web because it’s a mature market. This seems a little pointless to me. Of course you’re not going to keep growing at the same rate you were two years ago if you’re in a “traditional” web business. No one keeps up that sort of growth. However, what a good business does is look for new areas it can move into that will help increase the growth. The article seems to indicate that all such areas are gone for now. Seems a bit shortsighted.
Comments on “Diminishing Returns On The Web”
Good ol' time rant
“With the capital markets now wary of pouring more money into the communications industry, the pace of development could be in jeopardy”
Development will keep going on, no matter what. It just won’t be at 1000%/year or 100 times further than we were eighteen months ago (exaggerated, yes, but I’m just trying to make a point) and have gotten used to. Well, duh, you can’t keep that up forever.
people are spending less time online than they were, though most indicate that online usage is still rising.
I don’t think this is a bad thing at all. In fact, I’m sure I was reading this survey (or one very similar to it – Canadians were #1 for usage and % hooked up!) and it said that most users felt they were using the internet more effectively and weren’t doodling around for hours searching not only for what they wanted, but even just how to get there. I know I prefer dealing with more effective users rather than those stumbling around blindly, though we all started out that way.
I also agree with the rest of the article talking about how the law of diminishing returns is starting to kick in, a law that most investors and companies thought they could ignore, or simply put it right out of their minds. I hate to say I-told-you-so to all those companies, but my father, who still likes to play around with computers, but is not really near the leading edge, called this one years ago. “One of these days, those guys on Wall Street are going to realize that the companies can’t give them 150% revenue growth every year, and then it’s all going to fall,” he said while companies were IPO’ing with 300% increases in the first day. I guess maybe he was far away enough to see the forest. Good thing I listened to him. Even now, companies are still giving growth, but even a month ago with Q3 results, some companies were only giving, say $0.38 per share increase instead of $0.45 that investors expected. Well, that’s what happens when the market starts to saturate.
There. That’s enough ranting.