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Cyber Monday, Your Business and the Economy

Added by Kevin B on Sun, Dec 14, 2008, 10:44 PM

The old New Economy and CMS

It is the on-line version of Black Friday, right after Thanksgiving, the official start of the holiday shopping season in which most merchants make their profit for the whole year. This day became a widely celebrated day in the on-line community in spite of the gloom and doom that was predicted by some analysts back in 2000 after the bubble, created by the 'New Economy' frenzy, burst.

How did it all start?

On-line shopping started as early as the origination of the 'user friendly', or so-called 'public' Internet. How did this whole Internet phenomenon that makes your life so easy (in most cases) come along? You may not know that the Internet was originally a military project in which the main goal was to get computers to talk to each other even when they were in the different part of the country. The military leaders envisioned these interconnected networks as part of the defense system. They wanted a flexible network in which certain parts of the network are still operational even when the other part is hit by the enemy.

So ARPANET was born.

Eventually this military project, similarly to other previous ones (just like the radar or the television), the predecessor of the Internet made its way to the civilian life. By the end of the 1980s all major universities, bigger public and private institutions in the United States were interconnected. Many users used a so-called bulletin board system (BBS) to send messages, share information and even files with each other electronically from the distance. In those days personal computers just started to evolve and they were difficult and clumsy to use so one had to be a technical expert, in other words, a 'nerd or geek' to be able to use them.

Then everything changed.

The user friendly, graphical interface that was initially developed, but then actually scrapped by Xerox got picked up and tweaked by some very talented software engineers at Apple. Their creativity, innovation and hard work lead to the development of the first Macintosh computers that were the predecessors of today's convenient graphical user interface (GUI) that an average user with minimal technical knowledge is able to use. To make the long story short, eventually Microsoft's Windows operating system revolutionized the way computing was done and gave way to millions of people to join the action and eventually have a small part of the phenomenon called the kind of Internet that an everyday person can easily use.

Many skeptics initially called the Internet just a toy for kids...

...or adults who wanted to be kids again. However, most of the participants in the cyber action had actually something else in mind. They wanted the Internet to be a useful tool for the masses. Something that can be used to assist solving problems, delivering information and sharing files (just like in the good old BBS days), but on a much larger scale with many more people involved. There was also a movement that rapidly started to develop in the newly created cyberspace in the mid 90s that focused on utilizing it for generating income and eventually setting up a business model that can provide a new way of doing business in many areas. Yahoo and Amazon were the pioneers in that. Yahoo focused on generating revenue from advertising other businesses on its portal. Amazon was one of the first on-line retailers giving grounds to today's massive e-commerce and on-line advertising. Basically the Internet and e-commerce developed hand-in-hand. This development was not without pain, however.

Many venture capitalists saw a big opportunity...

...to make a quick buck on the Internet in the late 90s so they started to invest heavily in the emerging so-called 'new economy'. The buzz was on. They gave billions and billions of dollars to new startups with no real business plans and no strategic vision for the long term. As you may remember, this era was called the dotcom boom or craze. In 1999 and early 2000 the Internet all of a sudden became a hot commodity and everybody started to jump in. And that created an enormous bubble (almost as big as the housing bubble lately). In 1999 there were 4 times more IPOs (Initial Public Offerings) on the NASDAQ than in 2001. Over 90% of the new IPOs doubled in price in 1999 whereas only a few of them made close to doubling in 2001. There was even one more factor that contributed to the bubble. Remember the Y2K scare? In 1999 many companies got huge sums of money for fixing a problem that affected some computers mainly in the banking system. After fixing the problems, most of these companies disappeared along with the money that was given to them.

During the dotcom craze many analysts (interestingly, sometimes the same skeptics who, a few years earlier were ready to write off the Internet as a toy for kids) now envisioned a bright future with the new economy in the center. They pointed out that in this new economy there would be no need for physical stores or shopping malls, no need for cars because everybody would shop on-line and work through telecommuting from his/her computer.

Then came March 11, 2000.

On this day the NASDAQ literally crashed and continued to lose its value until late 2002.

What went wrong?

After almost 8 years later and finally figuring out how e-commerce really works we can safely say that during the infancy of the new economy companies

• did not know what they were doing
• far less than honest
• did not have a long term vision

Those companies who survived the dotcom bust lacked the previously mentioned negative properties. They were success driven, had a long term vision and wanted to do business honestly. Among them was Google that was just a startup around that time and consisted of two kids in the basement at Stanford University working on a school project that later turned out to be the predecessor of the sophisticated search algorithm that underpins today's Google's search technology.

In the infancy of e-commerce, logistics and handling it properly became a major headache that turned into a nightmare to most of the companies. It was not unusual that someone ordered presents for Christmas only to get them in March in the following year. Why did this happen? Many dotcoms did not have good order tracking software. In fact, many of them only had the good, old fashioned way: pen and paper. Imagine: a

multi-million dollar software company with pen and paper

order tracking.... Amazon's founder was one of the few people who recognized that he needed to do something different than the rest the guys. In its infancy, Amazon was selling nothing else, but books and they did their order tracking by hand. But as they grew, they realized really fast that they need to implement a way that ordinary people (their order handlers) with minimal computer knowledge need to be able to handle the orders from an easy to use web page through a network. So this recognition gave birth to the first generation of so-called on-line or web-based applications that became popular in the commercial world within a few years. Sure, there were web-based applications before: they were used by the military, banks, power plants and traffic controllers. These were clumsy, required expert users and the underlying systems were beyond an everyday startup company's pocket. So it was not until the mid 90s when the first widely used web based applications started to gain ground. And even then most of the time, only 'intelligent' on-line merchants used them. One of the first on-line merchants who let their customer use their web-based applications heavily was E-bay with its unique approach of brokering deals between people selling and buying on-line.

Venture capitalists pulled the plug

on the dotcom companies and the so called 'new economy' collapsed. Over 95% of these companies disappeared overnight. Many of their owners got lucky and cashed in before the bust and 'parachuted' into companies with a different approach to e-commerce and on-line selling. Instead of trying to make money on the Internet themselves they went out as 'consulting experts' and found small business owners and promised them that the professionally looking websites that their companies design would make those small business owners very rich in a very short period of time. Their methods actually worked initially and they were tremendous successes indeed, in the beginning. As you may imagine, shortly after the initial successes, almost everybody started doing web design. That was when web design kits started to become popular and even a kid in the basement was able to design a professionally looking website. The underlying software for these website was overwhelmingly Flash which gave highly graphically intensive, many times absolutely beautiful web pages that moved around, played music and looked really professional. There are companies that even today want to sell Flash websites. Flash does have its place as it is a useful tool for a well-established business to reaffirm brand awareness and brand recognition.

However, Flash had and still have a few setbacks:

• It is a proprietary software that still does not work right in many browsers (the software that is capable of showing web pages from the Internet)
• It took too much bandwidth (data that could be transferred from the website's storage computer to the computers of the people who were looking at the site)
• It was too clumsy to handle e-commerce effectively from it
• Search engines were not able to recognize and index the content of Flash web pages (they still cannot do that)
• It required a lot of tedious work from the part of the web designer (or they said so), therefore they charged way much more than the site is actually worth (and they are still overcharging).

In the meantime CMS was somewhat forgotten.

Mostly some college kids, the so called 'geeks and nerds' used it and continued developing it. Some of the bigger users of the CMS were the few of the dotcom companies that survived the bust. At that time (all the way up to 2005) Flash was thriving. Everybody wanted a Flash website. However, many business owners soon realized that they did not get the bang for their buck and many of them abandoned their websites and wrote off the huge expense as advertising cost. Many of the web design companies started to have problems selling Flash. So, easy by easy they started to look at CMS and web based applications a little more in depth. Many web design companies recognized the importance of these and nowadays they are very aggressively and heavily pushing their template based websites that look very 'modern' to unsuspecting clients.

Regardless, how 'modern' an offer that you come across with may look, one thing you must not forget as a reasonable business owner: Do you remember the 'good old days' when web design companies came to you and told you that they would design you a website that would make you rich?

The same guys are doing their trick again,

this time with CMS systems. If a fast talking salesman comes to you promising that their company will design a 'modern looking' CMS based website and provide Internet marketing 'service', just ask them if they have this questionnaire or anything similar to that.

Have you heard of Myspace?

Your kids most likely have. Since the birth of Myspace almost everything changed overnight in the way business owners and Internet users (your customers) look at web design and the way they should look at web design companies. A new concept called the Web 2.0 was developed.

What is Web 2.0?

In a nutshell: the content of the Web no longer belongs to the web design companies, but belongs to, made by and constantly updated by you, the consumer or the business owner. Many social networking websites followed Myspace (Facebook is the biggest one and now it overtook Myspace as it has a neater interface that users like better) and they are in fierce competition for your advertising dollars. Their business model and the chance of survival is still questionable, many experts say. For example, Linked-In, a prestigious social networking website for executives and business owners just recently got a substantial capital infusion from an investor.

The good news is that the consequence of social media and web 2.0, a new concept called 'cloud computing' was formed. Cloud computing is nothing else but your business doing lead generation, fulfillment, communication, placing and tracking of all business participants and activities on an easy to use content management system on the Internet. Why is this important? You as the business owner do not need to invest heavily on equipment and infrastructure on your business location and you pay only when you use the services. Personalized web based applications can do almost everything you can imagine for your business in the 'cloud' (in other words, on the Internet). We specialize in developing many of these applications for you based on your circumstances and we do take your strained budget into consideration.

Give us a call at 1-888-969-3887 to talk to one of our Web Solutions Experts!

The Almighty Google

The reason why the social networking business model is still questionable is because of the mere existence of Google. By now that school project in the late 90s became a multi-billion dollar company and they dominate the on-line advertising market. How did they do that?

One word: relevancy

Google built its business model on that. Did you know that today the majority of people go on-line to find something that they want to purchase or find a service they want to use? Now that is a far cry from the Internet's "toy for kids" status, isn't it? Google made this possible because it delivers relevant results, because people find what they want and they are happy with what they find. Of course there are ways to "fool" a search engine and Google is not perfect either, but nowadays they "slap out" companies who try to "fool" (use tricks to deliver irrelevant results) it.

Web 2.0 is great because it increases relevancy.

There is another form of web 2.0 that forms its majority and that is called blogging and blogs. Blogs are certain web pages that initially the industry called web logs and later they just simply called them blogs. In other words, blogs are on-line diaries and they usually have something to do with a very specific topic and they are personal. A blog has a main area where the editor(s) can write and there is the comment area where people who want to make a comment can write. Therefore blogs are very relevant because they are usually topic specific and created by real people. Almost anybody who writes a blog nowadays is considered as an 'expert' on a certain field. Whether that expertise is valid or not is sometimes hard to tell. However, when many other people agree with the blogger in the blog's comment area, the prestige of the blogger gets higher. Blogs are also organic which means the entries are usually made on a volunteer basis and usually people who enter their opinion in a blog are not paid. Therefore, the opinions in blogs and the links to or from blogs are natural and relevant and that is what Google wants. Google also stressed that it wants to keep the Internet open and it will not favor paid back links coming from blogs to your site.

Why is it important what Google wants? Because currently over 70% of all searches on the Internet are done on Google.

It was not always like that. In the beginning there were thousands of search engines. You may remember the fierce competition between Yahoo, Hotbot, Webcrawler and Lycos, to name a few. Companies spent astronomical amounts of money to take the first positions among search results. Revenue was coming in and they were all thriving. Then Google came and changed the playing field. Google set new rules for search and now many people question the mere need for the ailing Yahoo that soon could fade into oblivion as it will be most likely be gobbled down by Google and AOL.

What does all this mean to you and your business and your on-line sales?

Basically, you have to play by Google's rules if you want to make sure people notice your business on-line. Does it mean that you have to be afraid of the 'big bad' Google as many people (including the US Government) expressed serious concerns about Microsoft in the late 90s and early 2000s? Remember the frenzy that surrounded the launch of Gmail, Google's mail service? Many said, that 'big bad Google' would read your e-mail and they would seriously violate your privacy. They did not. Remember the Viacom vs. Google lawsuit? Google stood by its customers and refused to give out personally identifiable data on users who uploaded questionable material by Viacom onto Youtube, owned by Google. When the US Government tried to force Google to disclose information on certain groups of people who look at websites with questionable content, Google stood by its customers and refused to share even after all major Internet Service Providers (such as AOL, Comcast and AT&T did so).

Google's philosophy is simple:

privacy is the number one priority and money can be made without doing evil. They have a very strong ethics code and they do not share private information because they know that in the instance they do it, they will break the trust of the majority of their users who see them as a useful and powerful partner in their Internet ventures whether it is search or doing business on-line.

The most important rule in Google Search:

the more relevant you are, the better your chances are to get your business to the first two pages of the search results. Statistics show that over 80% of the people who search on the Internet are looking for a certain product and service and ready, willing and able to pay for it. Now it is OUR job, to show YOU as the business owner:

• How to play by Google's rules and get YOUR company listed on the first two pages where your potential buyers look
• How to create on-line trust that makes people buy from YOU instead of your competition
• How to stay relevant and stay on the first two pages for a long time
• How to actually make a profit (after all expenses are deducted)

What does all this mean to YOU during the economic meltdown that most off-line businesses currently feel? If you act now, before your competition wakes up, you have a good chance to weather the crisis and come out on top. Many companies are confused and trim their advertising budgets and they are AFRAID. This is the time of action and reconsidering the direction where your advertising dollars should go. Industry experts say that...

...over 80% of advertising dollars are totally wasted

Why? The advertiser usually does not track or has no clue how to track the effectiveness of his or her ad. Would you still buy advertisement though if you knew it worked and you are able to track it? There are scientifically proven methods that our company employs that will let you know whether your ads would work or not even before you spend serious money on them.

The economic meltdown is your wake up call: it is time to act now, before it is too late! If you want to stay on the surface, redirect your advertising dollars towards advertising that is proven to work and let your company take advantage of the re-emerging

New Economy.

This New Economy will be strong this time and it will be here to stay because there is substance, expertise and hard work is behind it. In the last 8 years the on-line marketing industry learned a lot and thanks to Google, search became more relevant. The majority of the companies worked out their logistical issues and their customers now feel comfortable buying on-line. And most importantly: the younger generation almost exclusively uses the Internet for almost everything in their daily lives. If you want to stay in business for the long run, you'd better be equipped with 21st century tools and methods to conquer the hearts and the wallets of the new generation who will help the New Economy thrive.

So, can Cyber Monday save the US economy and give a boost to YOUR business? Well, it certainly can next year. The shopping season is almost over now, but this is the time to make your New Year's Resolution. We are ready to talk to you about it. Our Web Solution Experts are standing by. Call now!

1-888-969-3887

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