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| February 27, 2001 |
The
Dotcom Report Card
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Preface |
Call
it the US $1.755 trillion dot.com-investing lesson.
In America, it's hard to think of a publicly traded Internet company
that is not down at least 75 percent from its 52-week high and that
hasn't trimmed its expenses or laid off workers. While industry groups
have always drifted in and out of favor on Wall Street, it's rare
to see an industry evaporate as quickly and completely as Web stocks
did.
The collapse of the Internet bubble, perhaps one of the largest financial
fiascoes in economic history, came after a three-year period, starting
in January 1997, when investors would buy almost anything even vaguely
associated with the Internet, regardless of valuation. Investors ignored
huge current losses and were willing to pay 100 times expected earnings
in fiscal 2002. They were goaded by bullish reports from sell-side
securities analysts and market forecasts from IT research firms, such
as IDC, Gartner and Forrester Research.
The high rates of consolidation and failure that Web companies are
going through now is typical of many newly emerging industries throughout
economic history. Whenever a new technology comes along that has the
potential to dramatically change the competitive landscape, hundreds
of companies are formed to try to exploit that opportunity, including
many with weak management or poorly thought out business plans. Intense
competition ensues, returns on capital fall, and most of the new entrants
either merge or go bankrupt.
Locally, the scenario has yet to fully unfold, given that most Internet
companies in Malaysia are still at their embryonic stage and none
actually made it to the holy grail of getting listed. What began with
so much hype and aplomb has now been replaced with harsh reality,
as a falling stockmarket and slowing economy have combined to hurt
earnings. Far worse, are the negative perceptions that now stigmatise
dot coms, a situation worsened by the almost daily reports of layoffs
and cutbacks from the sector.
Amidst all the debris, it is worth noting that the present state of
consolidation represents only the first stage in the development of
the Internet economy, as it struggles through its teething pains.
More change is surely to come as big business embrace technology and
the Internet becomes interwoven with the fabric of our social and
economic lives.
For now, however, we need to digest the lessons and experiences of
the past year. What business models are more viable and which are
those that just don't work? Are all dot coms destined to be swallowed
up by bricks-and-mortar companies? More importantly, what can we look
forward to in the coming year? |
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THE PANELISTS
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Asgari Stephens [AS] (Mayang Imbang Sdn
Bhd)
Asgari Stephens is currently a partner at Mayang Imbang Sdn Bhd,
a locally incorporated private equity fund for high net worth individuals.
Prior to this, he spent one year as a special officer to the National
Economic Action Council, advising the council on issues relating
to the finance industry. He was also a partner at Kumpulan Sentiasa
Cemerlang, a fund management company managing over RM250 million
in assets. His stint as an internal auditor and investment manager
at Usaha Tegas Sdn Bhd also saw him directly responsible for the
company's RM200 million portfolio of publicly traded securities,
development of Tanjong's new headquarters building and representation
on the operating boards of KLCC. Asgari holds a Bachelor of Commerce
(Hons) and a Masters of Business Administration from Cranfield.
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Koay Keng Teik [KT] (GrowAsia.com SdnBhd)
Keng Teik is the head of advisory of Crosby and is currently on
secondment to Growasia.com, an associated company of Crosby. Keng
Teik is an ex-investment banker with Salomon Smith Barney, Schroders
and Arab-Malaysian Merchant Bank with more than four years of experience
in Mergers and Acquisitions and fund raising experience. Keng Teik
holds a Master of Science degree in Economics from London School
of Economics.
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Tengku Farith Rithaudeen [TF] (Alam Teknokrat Sdn Bhd)
Tengku Farith Rithauddeen is the person in-charge and responsible
for the strategic vision, overall management and leadership of Skali.
With more than eight years of management and business experience
from previous career stints at Commerce International Merchant Bankers
and Road Builder (M) Holdings Berhad, Tengku Farith is instrumental
in driving the growth of Skali. He is also an advisor to Venture
2001 and co-founder of the New Economic Forum. Tengku Farith obtained
his Bachelor of Arts in Economics from Carleton University in Ottawa.
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Nic Lim [NL] (Catcha.com Sdn Bhd)
Nic Lim is one of the four co-founders of Catcha.com and currently
holds the designation of Managing Director for the Malaysian operations
where he assumes bottom line responsibility. He is also a co-organiser
or First Tuesday Kuala Lumpur and board advisor to the McKinsey,
Mesdaq and MIM Venture 2001 Business Plan Competition. Nic graduated
with a double degree holding a Bachelor of Commerce/Management from
the University of Western Sydney in 1997 and a Bachelor of Law from
the University of Technology, Sydney in 1999.
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MODERATORS:
Rajen
Devadason [RD], (RD Book Projects)
Rajen Devadason is an award-winning journalist. As staff writer, of
Malaysian Business magazine, he won the Malaysian Press Institute's
award for best economic journalism in 1992 and the Citibank Pan-Asia
business journalism award, which included a stint at New York's Columbia
University and visits to the White House, World Bank and the US Federal
Reserve. His first book Your A-Z Guide to the Stock Market
was published in 1997 and since then he has seen a new book out each
year. Devadason holds a Bachelor of Science (Honours) degree in Physics
and Computing from King's College, University of London, and is a
member of MENSA UK. He currently writes two distinct financial planning
columns - a print column for Malaysian Business magazine and
an online one for zoomFinance - and is overworked as a financial planning
trainer-cum-consultant. |
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Steven K C Poh [SP], (I-2Media Sdn Bhd) Ex-journalist Steven
Poh is the chief executive of I-2Media Sdn Bhd, an online content
and electronic community developer. He is formerly business correspondent
for Asiaweek magazine and General Manager/Senior Consultant
(Virtual Communities) of a KLSE-listed software development house.
He won the 1992 Malaysian Press Institute prize for best magazine
writing while still at Malaysian Business (where he started
his journalism career). Also a former Press Fellow of Wolfson College
at the University of Cambridge, Steven graduated with a degree in
Communications (Journalism) from Southeast Missouri State University.
He completed his Master of Science degree in Speech Communication
from Southern Illinois University at Carbondale. |
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Below
are excerpts of the discussion
Click here for the full transcript. |
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