I-Shops Enter New Year With Cautious Optimism - Brief Article

Brandweek,  Jan 1, 2001  by Jennifer Owens

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Last year's high-tech honeymoon with Wall Street is now more than over: it's turned downright Darwinian.

Nevertheless, execs at numerous i-shops voiced cautious optimism about the coming year, in most cases stressing the impact of lessons learned in recent months.

"While there is an unwarranted [negative] hysteria about dot-coms, this fallout is the best thing that could happen," said John Bohan, president and CEO of L90, the Santa Monica, Calif.-based Internet ad server. "Companies can no longer spend three dollars to make a dollar. They have to build real companies."

Simply put, Y2K's close signals "the end of the year of bullshit," according to Matt Freeman, CEO of New York-based Tribal DDB North America. "[2000] was the year of hype, flashy business plans, funny VC money and buzzwords. That's not enough to sustain a business."

Indeed, too many Internet ventures over-promised and under-delivered in 2000, leaving consumers feeling burned or at least cynical about online brands. As a result, the goal for many i-firms in 2001 will be to regain consumer trust. "Companies should try to nurture relationships over time and not try to force relationships," said Freeman.

Marc Adler, chairman of Atlanta-based MacQuarium, preached pragmatism. "You can't focus on the flavor of the week," he said. "You can't be ERP today, CRM tomorrow and wireless the next day."

At New York-based KPE, founder and CEO Marc Patricof said the future should show that e-businesses can't survive as stand-alone entities. "I don't believe those businesses are sustainable and they certainly won't have venture capital behind them to finance the growth of the Scients, Viants and Sapients--that's over," he said.

David Bohine, vice president of Apollo Interactive, a Culver City, Calif.-based i-shop, agrees, adding that 2001 will see an end to the "multimillion dollar digital change-in-strategy engagements" serviced by interactive agencies such as iXL, Razorfish and MarchFirst, among others.

"They all started out as Web developers that morphed into wannabe Deloitte & Touche[s] and Andersen Consulting[s]," said Bohine. "If you need consulting, there's no reason why you wouldn't go for a traditional agency that has been in business for 100 years."

L90's Bohan believes the ongoing survival of the fittest among i-shops will usher in the arrival of "Warren Buffet"-type investors who will sit out the current sell mentality on Wall Street, seeking instead the most forward-thinking and well-established firms that focus on long-term metrics rather than day-to-day metrics.

"Let's not think about first quarter, second quarter or even 2001," said Bohan. "Instead, [consider] what companies will be the leaders in the next three or four years that are incredibly undervalued today. That's how you get around this."

COPYRIGHT 2001 BPI Communications, Inc.
COPYRIGHT 2001 Gale Group