Blog Post

Broadband boosts ecommerce, if not margins

We know broadband has been the real reason why ecommerce has taken off, but as I have said earlier, things will be tough for the e-tailers going forward. In addition to my theory of global Internet shift away from the US, the intense competition is going to be a crimp on margins. The New York Times has an interesting piece, debating the whole e-commerce stock thing.

Lanny Baker, an analyst at Smith Barney, tells the Times, Marketing and technology spending will continue to crimp margins in 2005. He had said in an earlier note that ‘healthy e-commerce activity benefits,’ but that ‘other retailers have noticed the same trends, and we believe the heat of competition is rising.’

Meanwhile, EBay rolls back some of the fees. This is how the whole ruckus was started, and sad to say not many bloggers wrote about this issue. Martin Tobais helped spread the message, but then he was an army of one!