Economists and writers are still stuck in the bad news area. And why shouldn’t they be? Look at the stats that keep rolling in. They are not good.
But here’s something to think about. As more and more of the traditional companies that dominated the old economy (pre-internet) struggle and go under, the new economy companies are finding new ways to develop. In fact, this whole meltdown could in fact be the final transition between the old and new economy, where new technologies win out over dried up 20th century business.
Michael Baxter points out that risk taking has been the thing that has led to many of the great innovations of the past. Companies, scientists, economists, advertisers all took risks, made mistakes, and stumbled upon the next great idea or invention. And those “inventions” carried us to the next level. New companies form, old companies die, but the economy as a while continues to move forward.
But in this economy, it seems that all of those companies are scared for their lives. And because they are so scared, they seem to be pulling out the risk taking business. In an effort to save cash, they cut marketing, they cut R&D, and they cut people. I have said it before, but it bears repeating, the companies that will succeed are those that find the opportunities in this mess and exploit them.
So who is taking advantage? Look at the Technology sector, look at the web. Social Media seems to be moving forward at the speed of light, and looking for the right way to make money and develop into valuable commodities. Youtube and other online video platforms continue to experiment with advertisements and partnerships to find revenue. The more people that watch videos online, the more traditional marketers try to enter the market, the more important a revenue stream will become.
Social Networks are starting to see the dollar signs. A week after MySpace announced $1 Billion in ad revenue, Open Social discussed how they will monetize their applications. The valuations of companies that connect people online used to be based on the idea of monetization, and now we are seeing the first real signs of those possibilities in action.
And let’s not forget about the Mobile Web. With the popularity of the iPhone as high as ever, here comes Google’s G1, and the new Blackberry Storm. The battle is on to connect more people to the web from a touch-screen phone. This means new opportunities for mobile service providers, platform developers, and third party applications. This is a battle that is sure to be waged for years.
Am I saying that traditional companies are dead in the water, of course not. But I am saying that it is time to wake up and see that online strategies are paying off. Technology is moving forward far faster than any other sector of the economy. They are the ones taking all the risks, and it appears that all the rewards are falling in their direction. So are we on the verge of a major transformation? That is for you to decide.
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