The advent of Internet and the ensuing “new economy” has opened up a plethora of new business opportunities – and an “inevitable” number of business casualties. Shapiro and Varian (1999) argue that while technology changes – economic laws do not. Internet firms with non-profitable business models have been forced to shut-down.
According towebmergers.com a total of 135 companies in the US had shut down by December 2000, on the other hand these where out of an estimated 7,000 to 10,000 private or public Internet firms (Businessweek 2000). Although share prices have fallen and the current value of Internet firms can be said to be closer to their true potential, the Internet will still play an important part in world business. It is important to remember that despite overvaluation, Internet companies have made a strong impact and probably will continue to do so into the future. The online retailer Amazon.com has only after 6 years of business grown to have sales of nearly $ 3 billion.
Furthermore both the portal yahoo.com and the auction site ebay.com are reporting profits and growth rates of up to 90% per year. All three companies have expanded internationally and are now among the world’s best-known brands (The Economist 2001b). Given the growing importance of both international trade and the Internet, this paper will discuss the emergence of born global Internet companies. A born global Internet firm is a company that can be said to fulfill three distinct characteristics.
(1) The firm takes advantage of Internet technology to develop new and innovating products and/or services,
(2) the firm conducts a major part of its core business functions online and finally
(3) the firm is international already from inception.
SME’s have taken Internet as the safest route to internationalization.
