With the collapse of some of the nations largest investment banking firms and the ongoing credit crunch, the economic situation in United States remains “challenging” for the time being. Still, there is cautious optimism in some quarters that Wall Street, and the nation as a whole, will bounce back sooner, rather than later.
One oasis of optimism can be found within the online business community. While Wall Street and even Main Street have struggled somewhat in 2008, online sales have remained respectable for many of the Web’s biggest companies. With a few notable exceptions, the largest retailers online, including Amazon.com, Buy.com and others have reported respectable — if not outstanding — earnings so far this year. And some of the biggest names in IT are predicting that the economic crunch in the U. S. will affect so-called “brick and mortar” businesses more than online companies.
In fact, at the international Web 2.0 Expo in New York this week, some of the biggest names in online retailing were on hand, and most seemed cautiously optimistic about the continued growth of online businesses. New York-based IT investor David Rose said, “This is a very good time to start up a company.” Other analysts tended to agree, and noted that despite Wall Street’s virtual meltdown last week, the online business world is continuing to expand at a healthy rate.
The high cost of gasoline and other economic factors are also encouraging online sales. Consumers are finding it easier and less expensive to buy online, rather than driving to shopping centers and malls for everyday items.
But where many Web leaders are concerned is in the lack of investment in technology that could be a side effect of the Wall Street debacle. The large brokerage houses were some of the biggest investors in online technology. But with many of these investment and brokerage firms melting down, technological advancement online could come to a virtual standstill.
It is also clear that the current financial crisis in the US is still in its early days. In the weeks and months to come, economists and business leaders will have a much better idea of just how severe the fallout from the stock markets downturn will be.
Comparatively though, online businesses are holding up far better than many other industries. For example, while America’s car manufacturers struggle to remain relevant and profitable, online businesses from virtual retailers to social networking sites continue to thrive — or at least hold their own. Let’s hope it stays that way.
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Comment by charleshooper — September 30, 2008 @ 6:41 am