Newspaper article St Louis Post-Dispatch (MO)

Shakeout Taking Place among Internet Businesses

Newspaper article St Louis Post-Dispatch (MO)

Shakeout Taking Place among Internet Businesses

Article excerpt

Search the Web for news about Internet businesses and it is hard to miss the headlines - nearly every week another small Web start-up is seriously floundering.

Two small firms recently underwent a shakeout and another filed for bankruptcy protection The medium holds promise and allure but has been short on profitability.

The problem has arisen among companies that had a hard time finding revenues, either because of competition, a faulty concept or unattractive technology. "'97 seems to be the year that parent companies and venture capitalists are looking for profits from these companies," said Patrick Keane, an analyst at Jupiter Communications. That doesn't mean the Web has been a bust. Far from it. Advertising revenues, according to recent surveys, are rising quickly, even if they are concentrated on the biggest sites. Skilled workers, such as multimedia developers, are still in demand. "The first big rush was toward interactive TV, then CD-ROMs, and then the Internet, which is now in a state of shakeout. I have no doubt that in the next year or so the rush will be on to something else," said Nathan Potter, a multimedia developer in New York who runs n. Potter Studio and has worked in all three areas. Among the recent setbacks, PC Quote, (www.pcquote.com) which provides real-time securities quotations and financial news on the Internet, posted a $2.2 million fourth-quarter loss and released an auditors report that questioned the company's future. It is seeking new investors. Fusion, a company that was offering to deliver information into users' computers using push technology, recently filed for bankruptcy protection. Early Internet publishing entrepreneur Michael Wolff left a business recently that had won $3.6 million in financing in January 1996, expanded up to about 40 staff and then was forced to lay off nearly all of them, according to a report on Wired News, an Internet-based news service. His venture, Your Personal Internet, offered stories, site reviews and and a comprehensive listing of events on the 'Net. But he had a falling out with investors. Company officials were not available to comment further. …

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