Consolidation in Cyberspace Analysts Expect Web Site Design Prices to Plummet

Article excerpt

Prices for Internet Web site design, which today can reach as high as $150,000, are expected to drop in the coming years as consolidation in the red-hot cyber business begins.

Web business profitability is currently "substantial," according to Harry Blount, a vice president and investment analyst with Rauscher Pierce Refsnes Inc. in Dallas.

"But we can expect to see a dramatic drop in costs of Web site design in the next two to three years," Blount said.

Web design prices vary widely, depending on the number of pages at the site, the complexity of graphics and whether the site is linked to other stops on the so-called information superhighway.

Simple sites may cost as little as $150, while upscale business and government Webs can run into the tens of thousands or more.

"A lot of people in business feel the need to be on the Web, but not a lot of people understand what's involved in creating a Web page," Blount noted.

"It's kind of like the early days of the environmental movement when a lot of consultants made a lot of money because corporations were fearful. They (companies) didn't have a good grasp on environmental regulations and implications."

Today's cyber uncertainty has created a bustling market for individual programmers and small design firms, many of whom operate part time or on a freelance basis.

"It is very much a cottage industry," Blount said. "I'm not aware of many big companies."

Many firms not only design Web sites but also maintain and host a number of sites for businesses and individuals on a computer server, and it's on this "administrative" side that Blount expects the bulk of the consolidation to occur.

"As the maintenance side becomes more technologically challenging, that's where we can leverage some economies of scale from acquisitions," he said.

Web site design companies are currently "springing up all over the place, ranging from one person shops to very big shops," said Kerry Master, president and chief executive of MasterMind Technologies Inc. …