CNET : E-Business : E-Commerce

   All aboard the B2B

By Julian Matthews
March 31, 2000

The flurry of dotcom deals and interest in all-things-Internet in recent weeks prompted a surprise critique from Malaysia's tech-friendly Prime Minister Mahathir Mohamad in mid-March.

At the launch of a joint-venture petrochemical plant, a typical Old Economy manufacturing operation, Mahathir expressed wariness of dotcom companies whose shares have surged in stock markets worldwide. "I hope companies like the Titan Group will not only survive the challenges of the information age, but also survive long after the bubble has burst on the dotcom companies," he said. The 74-year-old premier said Malaysia welcomed foreign investment but hoped companies would invest in "real businesses" that would outlast Internet-related ones whose true value was suspect.

The criticism seemed incongruous coming from the same person who is the No. 1 salesman of the Multimedia Super Corridor, a multi-billion-ringgit project aimed squarely at New Economy wealth creation. Barely a week later at a conference, Mahathir was ironically back on his pro-tech platform touting a K-economy Masterplan for the country.

Perhaps, the globalization-wary Mahathir just needed to vent. His dotcom diagnosis may be a stab at feverish market forces that the good doctor foresees he will not be able check from impacting the health of the country's economy again. At the height of the Asian currency crisis, the Premier repeatedly blamed foreign speculators for ruining the nation's stellar rise and displayed frustration at the inability to control these "rogue traders".

Malaysia has just emerged from the crisis, only to realize that in the interim, bricks-and-mortar manufacturing quickly went out of style. The world currently values fast-growth startups with little or no profits, on par with traditional businesses that previously rose through slow-and-steady incremental productivity gains built over decades. The current dotcom frenzy in Asia is reflective of one that struck the U.S. two years ago. Various deals, alliances, partnerships and infrastructure building are being put together hastily out of fear of being left behind. Real-time decision-making is even ignoring the basic tenet of buying into any company--which is simple due diligence.

"The flurry of acquisitions and online-offline marriages is all about seizing opportunities early," says Chin Kwai Fatt, managing director of PricewaterhouseCoopers (PwC) Malaysia. "This is only logical. The market is not looking at fundamentals but the enormous potential to be tapped. This appears to be the best way to compete for some of the cyberspace stardust," he notes.

Chin adds that valuation of dotcom companies defies standard valuations like Return on Investment (ROI). He cites Intel's Andy Grove who, when asked to comment on ROI of e-business, shot back: "Are you crazy? This is Columbus in the New World. What was his ROI?"


Julian Matthews is the Malaysian correspondent for CNET Malaysia. Email us your comments.

 Web Resources

Malaysia e-commerce hub
A resource site on Malaysian e-commerce maintained by Mimos

E-commerce site for Asia
An initiative of the National Electronic Commerce Committee

KLSE kicks off cybertrading
CNET Malaysia/Bernama report

Jaring's mall of Malaysia
A Web site featuring mooncakes to flowers to pharmaceuticals

Malaysia electronic business community
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