Prospering in the Face of Adversity

SYDNEY — The week that was in the Australian Internet industry – virtual communities searching for a merger partner, how to sell $200,000 worth of Chilli, the pornography economy, Compaq changes its reseller strategy and is Big Brother iTV in disguise?

The thin and weightless predictions for Interactive Television (iTV) are akin to the hoopla surrounding 3G Wireless. Quite appropriately, analyst and industry spokespeople tag forecasts with a 5 year time line. It’s interesting to ponder the question though: ‘Is Big Brother an initial glimpse at what iTV is going to be?’. Sure the technology is not seamlessly integrated in a set top box, but the audience interest and participation is unmistakable. Have your say.

Pornography has traditionally been a test bed for new technology, with it playing a major role in the economics of the VCR and video production. Similarly, pornography has also had a profound effect on subscription based content on the Internet and streaming media. Being constantly at the forefront of technology and innovation, there are many lessons to be learnt from the underworld of porn. This week, Craig Liddell investigated pornography’s effect on the various business models on the Internet.

Flat consumer PC sales have forced manufacturers to change their distribution strategies. Indeed, Buzzle – the Apple reseller network – is now placed in voluntary administration. Perhaps the most highly publicised move was by Compaq, who decided to pursue a direct model and shun its most valuable reseller – Harvey Norman. Compaq will now focus on restoring its retail partner relationships and trying to sell directly through the Internet.

News that founder and advertising impresario Chris Clarke will leave his post as CEO of Virtual Communities, places the ‘technology for the less fortunate’ provider at a crossroads. Coupled with Clarke’s resignation, Virtual Communities will also explore the possibility of a merger with Primus. The pressures for restructuring are primarily driven by Virtual Communities prestigious investor base, who are growing increasingly impatient with their investment. The Beagle analysed the recent events and took a look at the discount PC market.

Shelley Dempsey explores a successful exercise in Internet marketing and fulfillment in the form of Hunter Valley entrepreneur Brett ‘The Chilli Man’ Elphinstone. Brett and his wife Tracey sell over $200,000 worth of chilli products each year and have used the Internet as a pilar for their international strategy. The full story can be read here.

Finally, our May BreakfastForums will explore the future of online media. In recent years, the media barons of print, radio and TV have begun the slow process of transformation. However, for many traditional media organisations the commercial payoff from their online operations remains elusive. Registrations for our Sydney (May 4) and Melbourne (May 18) Forums are now open and can be made online at

For those of you who attended our Sydney ‘Lessons Learnt’ Forum a few weeks back, you maybe a star. Next Monday’s edition of Four Corners will feature footage of the event in a story about entrepreneuralism and the Internet boom. Tune in at 8:30pm on the ABC.

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