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News from Tower Systems about locally made POS software for specialty local retailers.

Dot Com Bubble II


The world loves sequels and mainstream media is working hard at giving the world what it wants. Another Dot Com crash.

Don’t worry it’s a way off yet. We’re barely at the start of the J curve of inflated prices for online businesses.

This boom has come about because mainstream media companies have realised they need to embrace online business models and that the best way of doing this it to buy someone else’s model rather than build your own.

The New York Times has purchased for US$410 million; Knight-Ridder, Tribune and Gannet have purchased Topix; eBay has purchased 25% of; Barry Diller’s media company buys Ask Jeeves for US$1.9 billion; and countless other media companies span up smaller online businesses or forge alliances to create their own.

Closer to home Seek.Com has announced plans to float having last year sold 25% of the business to PBL. Not so recently, last year in fact, Telstra stumped up over A$700 million for Trading Post.

While it is not up to me to comment about the prices paid, it does seem to be a sellers market and that this will continue for some time yet – as long as you have businesses which feel threatened by something they don’t fully understand and therefore want to either control or have out of the way.

All of this activity is driving others into the online media space and this will add fuel to the already raging fire. While the concept of news by the people and for the people is at the heart of the blog/citizen journalism phenomenon, once the huge volume of news, information and comment is commercially and efficiently aggregated (beyond what we have today through RSS and other technologies) it will create a further push by mainstream media to deal effectively with a new competitor.

One wonders whether mainstream media might be like the motor vehicle manufacturers early in the 1920s when they purchased trolley car companies and dismantled them so vehicles had one less competitor. The Net being what it is such cold not happen today. However, it won’t stop those most at risk from pursuing a share of the pie.

In the meantime, there are businesses like ours on the periphery of the media (through our development of software for retailers of news and information product) who are watching the chess game with more than passing interest and with a desire to help our clients understand the changes in the context of their businesses.

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By Mark