Notes on dotcoms

Musings on the occasion of the IPO in the UK of lastminute.com:

Felix's First Rule of Analyst Analysis:
Analysts at investment banks are interesting and/or useful only insofar as they are ever bearish about anything.

Felix's First Rule of Analyst Analysis (dotcom corrollary):
Journalists writing about dotcoms are interesting and/or useful only insofar as they are ever bullish about anything.

Everybody loves a sexy IPO -- much better to list your company and see the share price go up 800% than to build your company up to a solid tech stock with a billion-dollar valuation. And, of course, this being England, a sexy IPO needs a sexy face -- none of those spotty geeks you get on the cover of Fast Company or Red Herring or the Industry Standard in the US.

And of course the publicity is the *point*. No matter what lastminute.com is worth, its value is surely proportionate to the degree to which it is known. And the degree of critical intelligence it takes to criticise a dotcom for not making a profit -- well, you could have knocked me down with a feather.

You know what it was that really made eBay? It was all the free publicity surrounding the IPO. That was the thing which drew the masses to the site. If lastminute.com is really second only to amazon.com in brand-consciousness, then I'd say it's got a good chance of being one of the few companies to survive the coming crash.

Revenues: Without anything to compare them to, I'm blind here. But I think that spending money over the internet is something which spreads like a virus, and I think the virus really hit the US this last Xmas, and hasn't really hit the UK yet.

Ideas: I think it's not bad to leave yourself open to just about anything. Lastminute.com is not really limited in what it can offer -- last minute mortgages, perhaps? So can go wherever the market demands. That's the great thing about the internet: you put an idea up on your home page and within hours you get a very good quantitative way of measuring how good that idea is.

Cheapflights.co.uk: I haven't spent a lot of time comparing prices, but lastminute.com has the brand name, it's the first place you go, it offers more than just flights, it has a much cooler site, and -- crucially -- you can book the motherfuckers over the internet without having to pick up the phone. (I think.)

Windowshoppers are important. Remember, a lot of lastminute.com's revenues are going to come from advertising. Plus windowshoppers spread the word about the site. Where would Selfridge's be without windowshoppers?

So I don't know. I had a quick look around just now, and wound up being offered a table for 2 at the Sugar Club at 6:00pm. Er, no thanks. But I have to say that if anything like it existed in New York, I could see myself getting enthusiastic.

I'm sure that most dotcoms are going to go belly-up at some point, which means that statistically speaking lastminute will as well. But there are some reasons to be optimistic:

Amazon started as a bookseller. When my girlfriend was offered a $100 gift certificate at Xmas to either Amazon or Sharper Image, she chose the latter because she wanted a discman and thought that Amazon only sold books. There are two possible morals to this story: one that you wind up being typecast wherever you start; two that you can actually successfully branch out from where you start. Just because lastminute is now a niche company/fancy gift shop, doesn't mean it will always be.

To generate revenue, how about they start delivering stuff to your door in under an hour within Zone 2? Include video rentals as well. Now there's a business plan. You want a last-minute gift, you've got it.

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