Just as the earth goes through various seasons from spring to summer to fall and winter, so, too, do businesses and equity markets cycle through seasons. After nearly four years of summer in the world of investing, the past nine months proved to be a harsh season for Internet companies, with the average Internet stock losing more than three-quarters of its value. Yet it was also a time for many lessons to be learned. In times of excess, the capital markets may tolerate unsustainable business models that were built on little more than the greater fool theory, but such companies are destined to disappear. The focus has also shifted from customer acquisition to satisfying the needs of current and new customers.
Business is all about building lasting relationships and doing it profitably.
At the end of the day, success is that simple. Now, springtime is approaching. Although investors are still caught up in the dreary days of winter, better days may be just around the corner. E-commerce is a viable business model, advertising on the Net is an effective way to build brand recognition and awareness for companies, and organizations are shifting more of their business processes to the Web in an effort to reduce costs while driving sales. The difference today is that realistic expectations are beginning to set in.