Write DQ Responses for the followings
From an accounting perspective, it is inaccurate to value a company’s earnings simply by revenues. As there might be huge expenses such as marketing expenses or another cost of sales while the company had a great number of revenue. This does not necessarily mean that the company has earned a lot of gross profit/net income.
It is true that there is an inner connection between “hits” and revenues/profits. But more likely, the logic is that the dot-coms made great profits might have had good amounts of “hits”. And “hits” does not directly turn into profit in this industry. Especially it was the late 1990s, only half of U.S. adults used the internet, sharing personal information with special caution (James, 2019). It is a good idea to investigate one dot-com’s competition and position in the market, but it might not be an appropriate way to measure its potential revenue or profit gains. And what these dot-coms should do is to create a business strategy model to transfer these “hits” to ultimate sales.
It was twenty years ago in the dot-com era that limited numbers of customers using the internet to purchase. The merger’s strategy of paying a premium for orders of customers acquired is reasonable. James (2019) stated that the biggest cost for start-ups during the dot-com era was marketing. He pointed out that traditional print ads and broadcasts were inefficient and expensive. Compared with those methods to develop more customers, paying premium could be a shortcut for most dot-coms. As these existent customers might bring in their networks and accelerate the expansion of profits, which is called direct network externalities by Baye and Prince (2017).
I realize that the power of network externalities is well utilized in the brokerage business. Even though it is now twenty years after the first dot-coms era, the core of making new sales and gaining profits is to utilize every connection of existing customers. People might share their purchase experiences on Facebook, Twitter, Youtube, and so on as for now, most people are using the internet (James, 2019). In the process of sharing, a two-way star network is activated, together with the indirect network externalities are also participating in promoting potential gains from consumers’ connections.
Baye, M., & Prince, J. (2017). Managerial Economics & Business Strategy 9th Edition. New York: McGraw-Hill Education.
James M. (2019). 20 years after the dot-com crash: Is this time different? Retrieved August 12, 2020, from https://venturebeat.com/2019/09/01/20-years-after-the-dot-com-crash-is-this-time-different/
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more