Runet and crisis
I am currently working on an article for Money magazine on how the crisis has affected and can affect Internet business. If we take the number of speakers that I have planned to interview for writing this article, for 100%, now I have talked only with a third of them, therefore, in the article, it is possible that opposite opinions will appear. Nevertheless, I decided that it would be interesting to briefly describe the summary forecast given by the already interviewed speakers (their names can be read when the article comes out - I’ll just say that these are mostly tops of large Internet companies and companies whose business is closely connected with the Internet).
It makes no sense to argue in the comments with me personally - I just reduced what the speakers said to me, to a couple of sentences that convey the essence of their predictions. However, if you think that I have missed some major sectors of the Internet business in my questions to the speakers, indicate your wishes in the comments, and I will ask the remaining speakers questions regarding these sectors as well.
1. Providers. The amount of time spent on the Internet by users will increase (now it has increased, including due to the fact that people on the Internet are looking for information about the crisis that television channels do not give them, and in the future it will increase due to the fact that people will start going to theaters less , cinema, clubs, etc. - the Internet will replace this entertainment for them). The number of new connections will sharply decrease (primarily in the regions, since it is the regions that are now the most actively growing base of Internet users).
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2. Marketing (Internet advertising and SEO). Mediyka is already feeling the crisis (because the advertisers haven’t signed budgets for the next year), then, most likely, it will be worse. The context is still holding up (the reduction in rates is so far compensated by the flow of budgets into the context from the same media), but if it is shaken, the context will also be bad, since the users of the context are mostly small advertisers who have the same psychology as ordinary citizens (if all run, then run and they). SEO forecast is still the same as the context and for the same reasons.
3. Payment systems. Especially the situation will not change, except that people will try not to keep money in their wallets, and enter them just before you need to make a payment.
4. Entertaining services like Mamba and Loveplanet: there will be a decrease in income, but not a collapse. People just need to get acquainted somewhere and have sex, but they will not spend money with such a frenzy as it is now.
5. Electronic commerce. During crises, people start to read more, so the Internet book stores should not be affected much by the crisis. Online stores of hardware and electronics will be much more difficult due to the fact that people will be less likely to update phones, televisions, laptops, etc., but partially the reduction will be compensated by the fact that people will start to save and some of them will go from offline to online, where the same is cheaper. If the crisis develops according to 1998, when the population becomes poorer sharply and severely, then the decline in sales volumes of electronic retailers will, of course, be much more, but all the same, the online stores will be a little better than their offline offline counterparts.
4. Venture investment in Internet projects and Internet startups. Quite a difficult situation. Venture money will be less, but not by much (for several reasons: this is an investment for 3-7 years, and investors understand that the crisis is not forever, so if start-ups are financed now, then by the time they leave the market will again be on the rise; investment riskiness the stock market has become much closer to the riskiness of the venture business, despite the fact that the profitability of the venture business will not decline in the future, unlike the return on the stock market, it’s also impossible to sit in a cache for too long, money must work). But the requirements for start-ups will sharply become tougher - only the most outstanding ones will be financed and having clear prospects for monetization (and it is very desirable that this is not an advertising business model). Some of the already funded startups will be frozen (temporarily or permanently), the rest will try to cut the bones to the maximum during the crisis. Thus, although venture capital investors will continue to experience a significant shortage of start-ups, the number of start-ups funded will decrease, and significantly. Existing start-ups will need to be engaged in bootstrapping, regardless of whether they have investors or not.
5. The fate of popular, but unprofitable services like Odnoklassniki and Vkontakte. Here, the speakers with whom I spoke, think about the longest, and no one has yet decided to give an accurate forecast. Therefore, I will tell you not the forecast, but I will describe the factors that, in the opinion of the speakers, should be paid attention to.
Contra: social networks are unprofitable and require significant investments for their development, and in a crisis, their access to self-sufficiency through advertising becomes unreal. Investors can simply run out of money, especially if they used not only their money for investments, but also loans. In the context of the above-mentioned increase in the time that users spend on the network, the load will increase, and, consequently, more investment will be required. If an investor suddenly just runs out of money, then the data centers, which also need cash flows, will not host them out of charity, but will immediately disconnect them.
Pro : these services are very popular, a lot of money has already been invested in them, and if their investors have at least a small opportunity to push them through the crisis, they will use it.
6. Adult business and affiliate programs for non tangible goods (goods without physical delivery). Since the main contingent of Russian players in this area is working for Western retail consumers, they have already felt the crisis. According to one major advert (this is the name of people who work on affiliate programs, supplying traffic to affiliate affiliate owners), which supplies traffic mainly to affiliate partners in the adult business, his traffic productivity showed the following dynamics: 1K outgoing traffic to sponsors brought in August $ 39, in September, $ 35, in October, $ 29.7 - that is, a decrease of about a quarter. As the crisis develops, incomes will continue to decline. The Russian paid content market is projected to repeat this dynamic, but with a delay and more rapidly.
7. The market for web development and web design will fall dramatically - and start-ups that warmed up the market will become much smaller, and existing businesses will update their websites only when absolutely necessary, and large employers of IT-specialists will significantly reduce their staff. Salaries of programmers, web designers, system administrators, etc. significantly reduced by spring; project managers will fall in price not so much due to the fact that there are few good project managers.
8. The forecast of when the crisis will reach the bottom and the market will start to grow again: from autumn 2009 to spring 2011. That is, most speakers believe that this crisis is likely to be more protracted than the crisis of 1998. Optimists have not yet been found (only one of the speakers has so far expressed the opinion that there is a possibility that the crisis will be limited to what we have now but I rated this probability as “extremely small, in which I do not believe”).
9. Tips for doing Internet business in a crisis:
- Tighten your belt now.
- Go to meet your customers, understanding their difficulties - you will not survive the crisis if your customers do not survive.
- For those who still do not have monetization, it is urgent to start attracting customers - as the crisis develops, new customers will find it more and more difficult, as saving customers try to use only proven and most efficient platforms.
- Trying to survive without leaving the market, since the experience of 1998 suggests that those who did not leave the market rose several times better than those who left and then returned to the already growing market.
It makes no sense to argue in the comments with me personally - I just reduced what the speakers said to me, to a couple of sentences that convey the essence of their predictions. However, if you think that I have missed some major sectors of the Internet business in my questions to the speakers, indicate your wishes in the comments, and I will ask the remaining speakers questions regarding these sectors as well.
1. Providers. The amount of time spent on the Internet by users will increase (now it has increased, including due to the fact that people on the Internet are looking for information about the crisis that television channels do not give them, and in the future it will increase due to the fact that people will start going to theaters less , cinema, clubs, etc. - the Internet will replace this entertainment for them). The number of new connections will sharply decrease (primarily in the regions, since it is the regions that are now the most actively growing base of Internet users).
')
2. Marketing (Internet advertising and SEO). Mediyka is already feeling the crisis (because the advertisers haven’t signed budgets for the next year), then, most likely, it will be worse. The context is still holding up (the reduction in rates is so far compensated by the flow of budgets into the context from the same media), but if it is shaken, the context will also be bad, since the users of the context are mostly small advertisers who have the same psychology as ordinary citizens (if all run, then run and they). SEO forecast is still the same as the context and for the same reasons.
3. Payment systems. Especially the situation will not change, except that people will try not to keep money in their wallets, and enter them just before you need to make a payment.
4. Entertaining services like Mamba and Loveplanet: there will be a decrease in income, but not a collapse. People just need to get acquainted somewhere and have sex, but they will not spend money with such a frenzy as it is now.
5. Electronic commerce. During crises, people start to read more, so the Internet book stores should not be affected much by the crisis. Online stores of hardware and electronics will be much more difficult due to the fact that people will be less likely to update phones, televisions, laptops, etc., but partially the reduction will be compensated by the fact that people will start to save and some of them will go from offline to online, where the same is cheaper. If the crisis develops according to 1998, when the population becomes poorer sharply and severely, then the decline in sales volumes of electronic retailers will, of course, be much more, but all the same, the online stores will be a little better than their offline offline counterparts.
4. Venture investment in Internet projects and Internet startups. Quite a difficult situation. Venture money will be less, but not by much (for several reasons: this is an investment for 3-7 years, and investors understand that the crisis is not forever, so if start-ups are financed now, then by the time they leave the market will again be on the rise; investment riskiness the stock market has become much closer to the riskiness of the venture business, despite the fact that the profitability of the venture business will not decline in the future, unlike the return on the stock market, it’s also impossible to sit in a cache for too long, money must work). But the requirements for start-ups will sharply become tougher - only the most outstanding ones will be financed and having clear prospects for monetization (and it is very desirable that this is not an advertising business model). Some of the already funded startups will be frozen (temporarily or permanently), the rest will try to cut the bones to the maximum during the crisis. Thus, although venture capital investors will continue to experience a significant shortage of start-ups, the number of start-ups funded will decrease, and significantly. Existing start-ups will need to be engaged in bootstrapping, regardless of whether they have investors or not.
5. The fate of popular, but unprofitable services like Odnoklassniki and Vkontakte. Here, the speakers with whom I spoke, think about the longest, and no one has yet decided to give an accurate forecast. Therefore, I will tell you not the forecast, but I will describe the factors that, in the opinion of the speakers, should be paid attention to.
Contra: social networks are unprofitable and require significant investments for their development, and in a crisis, their access to self-sufficiency through advertising becomes unreal. Investors can simply run out of money, especially if they used not only their money for investments, but also loans. In the context of the above-mentioned increase in the time that users spend on the network, the load will increase, and, consequently, more investment will be required. If an investor suddenly just runs out of money, then the data centers, which also need cash flows, will not host them out of charity, but will immediately disconnect them.
Pro : these services are very popular, a lot of money has already been invested in them, and if their investors have at least a small opportunity to push them through the crisis, they will use it.
6. Adult business and affiliate programs for non tangible goods (goods without physical delivery). Since the main contingent of Russian players in this area is working for Western retail consumers, they have already felt the crisis. According to one major advert (this is the name of people who work on affiliate programs, supplying traffic to affiliate affiliate owners), which supplies traffic mainly to affiliate partners in the adult business, his traffic productivity showed the following dynamics: 1K outgoing traffic to sponsors brought in August $ 39, in September, $ 35, in October, $ 29.7 - that is, a decrease of about a quarter. As the crisis develops, incomes will continue to decline. The Russian paid content market is projected to repeat this dynamic, but with a delay and more rapidly.
7. The market for web development and web design will fall dramatically - and start-ups that warmed up the market will become much smaller, and existing businesses will update their websites only when absolutely necessary, and large employers of IT-specialists will significantly reduce their staff. Salaries of programmers, web designers, system administrators, etc. significantly reduced by spring; project managers will fall in price not so much due to the fact that there are few good project managers.
8. The forecast of when the crisis will reach the bottom and the market will start to grow again: from autumn 2009 to spring 2011. That is, most speakers believe that this crisis is likely to be more protracted than the crisis of 1998. Optimists have not yet been found (only one of the speakers has so far expressed the opinion that there is a possibility that the crisis will be limited to what we have now but I rated this probability as “extremely small, in which I do not believe”).
9. Tips for doing Internet business in a crisis:
- Tighten your belt now.
- Go to meet your customers, understanding their difficulties - you will not survive the crisis if your customers do not survive.
- For those who still do not have monetization, it is urgent to start attracting customers - as the crisis develops, new customers will find it more and more difficult, as saving customers try to use only proven and most efficient platforms.
- Trying to survive without leaving the market, since the experience of 1998 suggests that those who did not leave the market rose several times better than those who left and then returned to the already growing market.
Source: https://habr.com/ru/post/42737/
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