Document text
--> --> Bob Herried of Funagain Games takes Internet orders in his stocked warehouse in the Ashland Shopping Center. Internet sales make up 97 percent of the business, which has not suffered financial losses despite a plunge in the national Internet market. Ashland Daily Tidings/DENISE BARATTA Internet firms on the rebound By Sean Wolfe Ashland Daily Tidings A year after the collapse of the technology boom, some local businesses say they are starting to see early signs of renewed life in the local Internet economy. The reasons vary from gradual growth to post-9/11 consumer demand, but the consensus among local businesses is that the Internet sector is far from dead. According to Dick Wanderscheid, electric & telecommunications director for the City of Ashland, the city-owned Ashland Fiber Network is doing just fine. The network is still in the midst of its $5 million build-out, and continuing to connect homes and businesses to its high-speed network. The biggest area of growth for AFN, thus far, is in connecting residences. According to Wanderscheid, while business cable modems still number fewer than 100, the number of homes has grown 60 percent from 1,353 in June of 2001, to 2,169 as of the end of February, 2002. "We're still growing, and we're ahead of our business plan," Wanderscheid said. "I'd say the Internet economy in Ashland is alive and well." Other area Internet businesses revealed that growth can also be found in the business-to-business category. Companies like Project A, and the Internet Marketing Group (IMG) are reporting renewed success in getting business customers to invest in their Internet efforts on an ongoing basis. Project A specializes in developing full-blown solutions for Internet-powered businesses, with particular focus on providing those companies with Internet connections, Web programming, and solutions. In contrast, IMG focuses on creating marketing programs that help their customers realize return on their Internet investments in the very near-term. Both businesses acknowledge that simply banging out Web pages for businesses is not enough to live on. Nor did they find it sufficient to remain content with local clients, drumming up business upstate and out-of-state to keep their businesses growing, and bringing those revenues back to Ashland. The Tidings tracked down Ed Taylor, owner of Internet Marketing Group, and found him in the midst of setting up a new sales office in Los Angeles. Rather than build Web sites for companies, IMG provides its clients with ongoing marketing programs that help raise the profile of their Web sites and businesses, generate sales leads, additional Web traffic, and other means of increasing their revenues and visibility. Taylor said he had just hired a new sales executive to work leads in the LA Basin, and plans on selling services there, but will continue to develop in Ashland. According to Taylor, IMG gets 90 percent of its business from out of state, and roughly 20 percent comes from California. Bullish on the current economy, Taylor said his five-year-old business has managed to double its revenues every year. While IMG's revenues remain in the mid-six figures - two-thirds of that from Web development and Internet marketing, and the remainder from Taylor's many paid speaking engagements - Taylor said he has managed to add over fifty new clients since 9/11, a fact he attributes to pent-up demand. "It's an incredible time to be in business," Taylor said. "The other side of that is that a lot of Web developers who went out and built Web sites for companies locally aren't around anymore. They had no continuing business, and the companies they built for are saying `we have a Web site already. Thanks a lot.'" If the valley Internet economy conforms to any rule, it's that size continues to matter. According to data released to The Tidings by the City of Ashland, while the area boasts 53 licensed businesses in the technology sector, only three businesses - Project A, Triad Healthcare Systems, and Intercal - have 10 or more employees. The remainder of the businesses - with few exceptions - have three or fewer. While the City's information doesn't take into account unregistered businesses, or businesses that may be conducting some business over their Web sites, in Ashland's technology sector one trend remains clear: Keeping overhead low for many area technology businesses has also meant keeping headcounts low, and being cautious about growth. Project A learned that lesson first hand late last year, when the company was forced to lay off 17 employees - about a third of the company - due to loss of business. According to Project A owner Jim Teece, that clear-cutting forced the business to focus on what it did well, and most profitably. " What we did was focus locally, to ride out the storm. The downturn made us really focus on building up a network solutions team ... We built up a great team of highly certified people, focused on developing solutions and providing connectivity to the Ashland Fiber Network," Teece said. Teece's re-focusing efforts appear to have succeeded since the layoffs, despite the economic downturn. While the company's revenues fell from $2 million in 2000 to $1.8 million in 2001, there are some signs of a rebound, or at least a return to normal this year, according to Teece. "2001 was a downward spiral, it was pretty tough, and if you survived that, you were poised to pick up again. In the past three weeks, we've had half a dozen (requests), and we were saying, `this is new, that's great - because last year was dead," Teece said. According to Teece, a new influx of investors that back technology businesses may be starting to sense that it's time to reinvest in technology, but unlike the boom years, investors are being extraordinarily choosy about where they put their money. "It's certainly not the wild dotcom craziness, where any idea would get a huge cash influx. Investors and businesses are looking for good, solid ideas. In the meantime, we're looking to stay the course, and operate the company lean, mean, and as profitable as possible," Teece said. In keeping with the lean and mean theme, local business Funagain Games told The Tidings it does close to 97 percent of its business through its Web site. According to Funagain owner Bob Herried, the company has upped its revenues by 47 percent since last year, with over 4,500 sales of imported board and card games in December alone. Herried acknowledges that without the company's home-brewed Web site, launched in 1998 by Herried's Sunnyvale, Calif.-based partner, the company might not have made it. Now, the company boasts seven-figure sales. "Business hasn't been too bad," Herried said. "We're doing about as well as last year, and our only bad month was September of last year." Email your... Technical questions & comments to: WebMaster Daily Tidings editorial comments & questions to: Editor Visit our other Oregon Newspapers... | Albany Democrat-Herald | Ashland Daily Tidings | Corvallis Gazette-Times | | Lebanon Express | Newport News-Times | Springfield News | Cottage Grove Sentinel | Ashland Daily Tidings 1661 Siskiyou Blvd. Ashland, OR 97520 Telephone 541-482-3456 © Copyright 2001 Lee Northwest Publishing