Big Business and the Internet: I Think They’re Finally Getting It

Wal-Mart is upping the ante with its new classified listings service on its Web site. I found out about it this afternoon on TechCrunch, but according to Erick Schonfeld’s post it happened “quietly last week.”

What I think is interesting is that this is just another recent example of big business waking up and recognizing the potential of the Internet - a potential that small businesses and startups have realized for quite some time. These larger companies, however, are finally starting to flock to the Internet to find new revenue streams online, and they’re doing it at a record pace.

This trend of big companies looking to move beyond plain old e-commerce, which has been around for more than 10 years, and generating true digital/interactive revenue is something that is sure to accelerate over the coming months and years. In a world where traditional growth rates for big businesses and their core markets are often in the mid single digits, online markets with double and triple digit growth rates will surely be more and more attractive.

As an investor, one thing that I watch for in big companies that are moving into the Internet space, is whether that business has found a synergy between its core business and its new online businesses. HP’s acquisition of Logoworks is a great example of expanding on a traditional e-commerce model to include a digital/interactive services model. What is exciting to me about the Logoworks acquisition is that HP is not only generating new digital services revenue online, but they have the opportunity to sell printers and supplies that companies who’ve just purchased a logo can use to print their newly minted logo.

The thing to watch will be how many companies hire, or acquire, the right teams and technology to properly execute and succeed in the Internet space, and how many companies just hastily throw together “online businesses” without having a technology platform that positions them to succeed or a team that understands the Internet and the unique dynamics of this business.

All I have to say is, welcome to the club Wal-Mart! Regardless of whether this initiative succeeds or not, you are positioning yourselves well to start generating revenue from this high-growth place known as the Internet.

2 Responses to “ Big Business and the Internet: I Think They’re Finally Getting It ”

Comments:

Andy says:
June 8th, 2008 at 9:36 am

This post could not be more true.

Big business hasn’t yet fully realized that the channel of the future is the internet. Look at all the big companies who are sucking and the thing that they have in common is that they don’t have a vision or strategy for the internet.

This is usually because they do not have a group dedicated to the internet that has a leader who comes from the internet world.

Once a company puts in place a quality internet initiatives leader and team, they generally can move quickly, when the CEO has a vision that includes the internet. Look at Rupert Murdoch and his creation of the Fox Interactive Media business unit. He hired several great leaders from the internet space, put in place a great team, and recognized that he needed to commit to recognizing the internet as the channel of the future.

Now that he did that, Fox is clearly the media leader in the internet space and generates a ton of revenue from the net.

Other big business CEOs who follow suit and execute effectively with the right teams will surely see similar outstanding results.

Oh, last point, companies that try and create internet teams from within using existing IT and marketing people who have never been head deep in the internet will fail. I was a consultant for years, and I saw this happen all too many times.

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