» uk-netmarketing: roundup: 24-03-2000

The impact of Lastminute’s share plunge
UK-Netmarketing Weekly Round-up - March 24, 2000

It was bad enough before the IPO, but after Lastminute hasn’t been out of the headlines, whether it’s heavy debate from the broadsheets or the daily tally on how much investors lost, from BBC Online. Given that a sizeable number of UK-Netmarketing subscribers work in start-ups, a heated debate was inevitable.

John Braithwaite posted, "Aren't we being a little over zealous in writing them off. Regardless of where their share price goes, they have significant funds in place to develop and deliver more. I doubt very much that lastminute is just going to drop or go away - they have too much cash to do that. The real test will be what they are doing in about 2-3 years time (p.s. I wouldn't spend it all on marketing, if I were them!!). Prepare to see their shares rise in the next few months."

Paul Gill responded, "Why? They are valued at around £460m as I write this (probably less by the time it reaches the list). Isn't that enough for a company who has found it difficult to convert users to buyers, and who is losing money hand over fist?" Mohammed Raja, on the other hand thought others might benefit from their mistakes. He emailed, "By setting the float price at the high end, Lastminute set themselves up for a fall, along with the greedy investors out there! It's the wake up call dot coms needed."

Ray Taylor pointed out the gulf between the city and the way dotcoms may change the way we do business. He added, "... as far as over-valuation is concerned, we may all assume that dot-coms are over valued, but everyone is forgetting that business is changing, electronic commerce is taking over. The underlying structures of commerce are being completely re-invented. A commercial revolution is happening right under our noses and the very people who ought to understand this are the ones who are relying on outdated notions of commercial value and business structures to make sense of what's going on."

Like most dotcom startups, Lastminute is yet to show a profit, nothing new perhaps, but can this situation go on forever and will it hurt profitable new media companies? Robin Edwards wrote, "But what about the profit making e-commerce ventures? There are many UK e-commerce sites with 7+ figure revenues each month, and phenomenal growth rates, that may get caught up in the fall-out and receive unfairly low valuations as a result. Or it could go the other way, of course, with profitability finally becoming desirable again. Did someone say dividends?"

Cait Hurley had some pointers on why traditional media has been following Lastminute’s share price fall with such zeal. She wrote, "Many old media sources love reporting new media screw ups. e mad markup on net prices makes great news in terms of instant ten million pound teenagers, or even more news worthy - instant ten million pound losers"

In the meantime, Andy drew a worrying parallel between Martha Lane Fox’s possible over-exposure and another share-damaging PR boo-boo. He emailed, "As a colleague in my office keeps saying, she is going to become the Gerald Ratner of the .com world if she is not careful."

It’s not all doom and gloom, Stewart Dean had some ideas for Lastminute’s next move. He suggested, "My thoughts - invade America! They have to expand quickly or they'll never get the value the shareholders crave. I think it's been said before but lastminute where trigger happy on their IPO. … go big or go home."

Perhaps everyone is getting their knickers in a twist a little too early. Andrew Warner reminded everyone of previous high-profile IPOs, "… it's a bit early to start making judgements about Lastminute's fortunes on the rollercoaster that is the UK stock market. It's not that long since many were crowing about the imminent demise of Freeserve after their shares took an early pounding, but they soon went back the other way."

Perhaps the unsung weavers of the web are restless. Billy Hasirci asked the list for some advice, "Does anyone know of a New Media Trade Union? I guess it is currently broken into journalism etc but I wondered whether there was a broader one."

Leslie Bunder suggested, "Well the NUJ (National Union for Journalists) in the UK is exploring setting up a separate chapter for digital media and online ... there is an opportunity for you fellow .comrade to have the NUNM (National Union of New Media). But first speak to the TUC as they should be a good source of information on creating unions..."

Simon Johnson sought some help from list members, "I seen two US web sites that offered credit card clearance for charities. So all a charity has to do is register and add a link to their page which will enable users to send a donation without the charity having to set up their own ecommerce server. Have you heard of any UK provider doing this?"

Stuart Nolan suggested contacting, "The Media Trust http://www.mediatrust.co.uk/ are running a series of seminars at Charity Fair 2000 that will tackle issues such as this. Be worth talking to [their] Business Development Officer."

Leslie Bunder added, "I recall in the past when there were various appeals and charity events such as Comic Relief, that various Web sites did indeed allow them to advertise for free. Also there is the charity portal care4free.net which gives money to a number of charities."

Perhaps some of the newly minted IPO millionaires would care to contribute? I suppose it depends on how many millions they’ll end up with!

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