Tuesday, August 20, 2013

Dot com microcap companies: Boom, Bubble or Bust

In the midst of recession, it is hard to imagine the next run on the market. The last dot-com bubble witnessed a group of websites receive Wall Street funding.  While some are still here most are gone. In 2013 a slew of new dot com companies has hit the market. These companies look very similar to the last dot com bubble.  While some have legitimate sustainable business models others look as if they will be gone in the next few years.

The allure of making money online has led many people to open online stores and internet business models. From blogs advertising such as ourselves to online retail, the internet is filled with no name websites competing in par- ticular niches. Some websites are charging subscribers for content while others are selling actual products. So is there an online dot-com bubble approaching?
We think so.

Companies like Google and WordPress have made it easier than ever to start an online blog. Ecommerce providers like Volusion and Shoppify are making online retail accessible to anyone. And the data shows that the American public is taking advantage of both platforms.
Service Exchange web sites such as freelancer.com and Fiverr.com are generating millions and growing by the day. Venture backing for websites like SeekingAlpha.com, are proof that soft money is attracted to the lucrative returns the Internet can provide.

So what is different this time around?

This time around the investor is a bit smarter about the internet. The last dot com bubble show the websites getting funded without revenues, this time around we believe investors will be more cautious to invest in web sites with revenues. Simple online business models will be the key to future funding in the next, bubble. We believe you will not have to come to the table with fancy coded websites, which provide an interactive means for visitors to work the site. We believe one keyword or a single product will allow a website to roll into the public markets.

A prefect example is Co-signer.com, an online website basically offering insurance for landlords. This microcap company already trades over the counter. The simple business model has the potential to generate the company millions of dollars per year. A quick look at the website and you fully understand the business. This is unlike the last Internet bubble where jargon and technical talk trumped actual business models.

One must also not ignore the influx of online retail stores. Ecommerce has been growing steadily for the last 15 years and was not a major focus of the last dot-com bubble. We believe it will play a major part in the upcoming dot com bubble and bust.

So why will Wall Street fall for the internet once again?

The truth is that the internet needs expensive capital to operate efficiently. Those companies that utilize capital effectively will thrive. The companies that do not will leave investors disappointed. While its remains to be seen which companies this will be,  they are already coming.

The MicroCapCompany Team
Posted By: Nicholas Coriano 
Follow Nicholas Coriano on Twitter


About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here

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