Tough Day for Internet Stocks – Tips to Survive the “New” Economy

October 16, 2008 – Shares of internet businesses declined across the board. Notable drops were had by Google, Yahoo, and Ebay.

Investors fear that the economic crunch has finally spread to the internet in the form of reduced advertising budgets. If producers make less, sell less, and promote less, then it follows the website publishers and online businesses who get paid for that advertising will start to see reductions.

There are still ways to avoid the fate of these big name internet businesses.

Focus on Pay Per Action: Stay relevant to the companies you advertise by delivering leads that convert into actual sales. While PPC earnings are in a slow and nearly constant decline, you can make as much today with an actual sale as you could last year.

Offer Coupons and Discounts: Obviously, people are less enthusiastic about spending money – so try to offer incentives like coupons and discounts that make the purchase more affordable. So what if it cuts into your commission? Make the sale first! Help out your customer and they will help you out, too. Give them the best deal and they’ll tell their friends.

Sell Quality Products: The best thing to sell is something you actually use and enjoy yourself. Who else knows all the best and worst aspects of the product? The next best thing is to sell products you would use or would recommend even if you weren’t being paid. Don’t sell something that you think is a waste of time or money – you’re just making your job more difficult than it has to be and your risking your reputation.

Get Paid for Free Service Signups: is most noticeable to me on my education website, where I encourage students and parents to sign up for free services like Fastweb or Upromise. These programs are absolutely free, so I would definitely recommend them to my visitors who need money for school. How’s that for a business plan in a recessionary economy – get paid when people sign up, for free, to services that help them find money.

Now, Here’s what the “Big Names” Have Been Doing Wrong

Google – Google has actually been running a pretty tight ship and if anything, their recent stock revaluations have been based on the fact that some of its older prices were simply unrealistic. Yes, Google is the internet powerhouse, but expecting 30-40% annual growth every single year is a little bit of a pipe dream that Wall Street came up with.

Google has continued to gain market share in online PPC advertising, but this segment isn’t growing quite as quickly PPA and affiliate advertising programs. They’ve got their new Google Affiliate Network, but most of the webmasters I’ve talked to didn’t even get accepted to the new system. When they closed referrals, I had to go to Commission Junction to get the same banners I used to have – their new program didn’t even offer it.

Yahoo – Yahoo, on the other hand, has no Wall Street hype to blame. They had a huge opportunity to cash out at a high price when Microsoft made its offer, but the executive board got greedy and tried to hold out for more. BY the time they realized that more wasn’t coming, some more news about their earnings and inability to grow while containing costs started leaking out and doing serious damage to their stock value. For the last few months, its been a gradual decline for Yahoo’s values and they have just sunk to a new 52-week low as of today.

Ebay – Wow, does anyone know what is going on here? Ebay has been wildly swinging the ban-stick at its affiliate advertisers, now they’re trying to roll out a brand new program on another platform. That’s not a good way to grow your sales, and its not a good way to build trust with your sales-force!

So obviously, sales plummet and they have no choice but to respond with even more absurdity: new fee structures based on the popularity of a product’s type. Oh yeah, and huge job cuts to the workforce.

Now, go out there and make some money. “When the going gets tough, the tough get going.”

Seriously, get going! The economy isn’t going to ease up anytime soon. This is the part of the economic phase that separates success from failure.

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