Wednesday, May 21, 2008

Who suffers?

On a more serious note, if MSFT continues this for a long time, offline retailers and etailers may both suffer significantly. They are already facing margin pressures due to inflation, falling dollar and a bad economy. If I was AMZN, circuit city or best buy, I would be a lot more worried about this, because once smart folks, the kinds that frequently visit fatwallet and slickdeals, figure out that they can save some $$ going thru live, they would never purchase directly from the AMZN or CC website. The advantage of live would be short-lived because sites like AMZN will demand better deals from the manufacturers or cut their margins.

GOOG may suffer from a perception that this may change the game. But reality is that their business model is quite adaptive because the advertisers bid against each other. If a few advertisers leave, there are a lot more, who are currently losing the bids, that can take their place. Meanwhile if you are looking to buy that fancy camera, here's your chance to go live. Take advantage while it lasts. Reminds me of the webvan and pets.com days.

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