United States Internet entrepreneur Alan Meckler kicked off Internet World Asia last week by criticising consumer Web portals as overvalued and declaring the coming of the vertical business-to-business site. Mr Meckler, who oversees an Internet media empire that includes 78 Web sites and two venture-capital funds, used his speech to blast many in the industry, including Internet stock analysts, venture capitalists and Internet billionaires such as Amazon.com's Jeff Bezos. He also revealed he is discussing deals with three Beijing firms and two in Hong Kong. Mr Meckler cited Nasdaq high-fliers such as Amazon.com, Priceline, Lycos, Yahoo! and Excite as having overblown stock prices. 'Those stocks are fundamentally overvalued,' he said, 'and will lose 80 per cent of their value in the next two years.' This was because people would use the Internet differently two years from now, particularly with the advent of broadband access. What is more, the search engines which are the foundation of most of these Web portals will be unable to keep up with the rocketing numbers of Web pages. 'Search engines are fighting a losing battle,' Mr Meckler said. The best now covered only 15 to 18 per cent of the Web. By next year, they would cover only 3 to 4 per cent. Intelligent agents, which could search on Internet users' behalf, would be popular very soon. Mr Meckler said Amazon.com chief executive Mr Bezos 'is doing the wrong thing by trying to sell everything from books to pet food . . . Amazon.com, as far as I know, is losing money on every transaction'. He reserved some of his harshest criticism for Internet analysts, who were searching for the next big consumer Web portal. 'They're all dodo birds,' he said. 'They were all covering some widget-making industry four years ago', and now they were Internet experts. Mr Meckler said Web advertising would work, not for consumer Web sites, but for vertical e-commerce sites. He also said Web sites should initially be free and expect only to charge about 10 per cent of their total user base for higher-value content. Mr Meckler said the deals with Beijing and SAR companies were all early-stage investments and incomplete. One provided free e-mail newsletters and they all offered Chinese-language business content. He had met or heard about them as recently as last week. Mr Meckler also joked that coming to Asia had helped his company's market valuation. 'It was US$380 million before I left, and now it's $550 million,' he said. 'I think the thing to do is be seen in Beijing and Hong Kong.'
