The Internet As A Business Environment

There are huge benefits to the Internet as a business environment not least of all the lack of restrictions in geography and time zones, and improved transaction speed and cost.

Turban E et al (2004) cite Huber (2003) who states that the new business environment has been created due to advances in science occurring at an accelerated rate.
Huber continues by saying that the rapid growth in technology as resulted in a large variety of more complex systems and that as a result we experience a more turbulent environment, with more business problems and opportunities; stronger competition; and the need for organizations to make decisions more often.

The popularity of the Internet in the early 1990’s started a surge of new companies who ran their whole business on the net. These companies were known as the dot-coms. The best-known example of a dot-com business is www.amazon.com.

The failure of so many dot-com companies at the end of the 1990’s led to the media naming Internet only businesses ‘fads’.

However, for every failure there are probably many untold success stories of those who have built up successful businesses on the Internet.

It is a well-publicised fact that no Internet Company whether just a start up or a brick and mortar company jumping on the Internet bandwagon makes profit for the first few years. In fact according to the Tesco web cast interim results annual report for the first three years www.tesco.com was in the red. It was not until the year 2003/2004 that they started to make a profit.

Amazon.com made their first full year profit in 2003 approximately 7 and a half years after they first started trading online. There could be many different factors for the time difference these two companies took to see returns on their investments. Amazon was one of the original dot-com companies to enter the e-tail scene.

The reason it took them so long to make their first profit was probably due to the fact that in 1995 the Internet was in its infancy stage. Never-mind all of the problems at the time of the millennium, which saw the fall of a lot of the dot-coms.

By the time Tesco entered the scene in the year 2000 most of the dot-com failure hype was decreasing and it has taken until now to regain all the trust in the Internet as a business environment that was lost.