Negative Impact of the Internet on Business

Today, a massive amount of business is done over the Internet. Everything from buying stock to paying taxes to making household purchases can be done online, often at a substantial savings. But in certain fields or situations, the Internet is simply bad for business.

Bricks vs. Clicks
Since the late 1990s, Internet retailers have seen rapid growth in their businesses, both in terms of customer volume and total online sales. What started out as only certain products being widely available online has come to a point at which today, nearly everything that can be bought in a store (and some things that can’t) are available for purchase somewhere online.

Of course, not all of these Internet sales represent new customers and new money. The vast majority come at the expense of traditional retailers, who have seen sales decline in accordance with the rise of online shopping. For sellers who maintain both retail locations (“bricks”) and an online store (“clicks”), the pressure is on to find a balance between customers who prefer a traditional shopping experience and those who appreciate the convenience of using the Internet.

New Competitors
The Internet also brings new competitors to many areas of business. It is within the ability of just about anyone to offer his products or services online through any number of selling venues, thus adding literally millions of new merchants to the global marketplace. For existing businesses, these new online sellers represent a challenge to retain customers or risk being driven out of business.

Additionally, the Internet removes the restrictions of geography. Shopping locally is no longer the only choice, and goods can be ordered from anywhere. Smaller businesses need only create a website to expand their customer bases to everyone with Internet access rather than being restricted by a local or regional market.

Certain products and services are quickly becoming obsolete in the digital age, including stock brokers, travel agents and even the post office. They have been largely replaced by stock websites, travel websites and e-mail, respectively. While some companies have spotted these trends before they occurred and offered online services to augment their business model, others have been left with a depleted customer base.

Automation on the Internet also has eliminated countless jobs. As businesses use the Internet to simplify and streamline their operations, there is less need for a large labor force. For cases in which an automated online system can sort data or answer customers’ questions, the human element is sometimes deemed unnecessary.

For all of the business conducted online, security and confidentiality become major concerns. Each year, millions of dollars are spent on security efforts to ensure that transactions are safe and that customers will feel comfortable conducting business online.

Beyond day-to-day transactions, major security threats such as hackers, viruses, and e-terrorism mean that providing security online means an added expenditure that simply doesn’t exist elsewhere. Breaches of security, such as the highly publicized theft of credit card data on several occasions, lead customers to question the safety of doing business online, which can hurt business further by lowering confidence levels.

Lost Productivity
One final way in which the Internet is bad for business doesn’t concern the business that happens online at all. Instead, it relates to lost productivity due to employees using the Internet at work. Estimates vary, but it is agreed that American workers spend a substantial amount of their workday replying to personal e-mail, following live sporting events and web surfing. During the NCAA college basketball March Madness competition, the effect of lost productivity due to employees watching basketball games online is especially visible.

Even for scenarios in which employees are not equipped with computers, the availability of wireless Internet on phones and other mobile devices creates a constant swarm of distraction that can cut into work time. Many employers have taken steps to regulate their employees’ Internet usage, but concerns about privacy and legality linger.

How to Start an Online Business

The Internet shopping market is vast, which can be beneficial or detrimental to your goals as a new online business owner. On one hand, you’re unlikely to be able to compete with the marketing budgets and Internet presence of monster companies such as Amazon and eBay. On the other hand, small online businesses can offer something large ones can’t — personalized service and expert knowledge about one specialized type of service or merchandise. Do your homework, learn about the world of Internet marketing and plan carefully to succeed at your online venture.

Meet General Business Requirements

Internet businesses have the same requirements as any type of business, including registering a business name and getting a business license. The U.S. Small Business Administration offers tips for all prospective business owners, on and offline. Learn about the basics of starting a business before jumping into your Internet business. Some requirements to meet might include:

Find financing
– Choose the legal structure for your business
– Register your business with your state’s government office
– Obtain a tax ID number
– Follow Internet Commerce Laws

In addition to the laws governing all types of businesses, certain laws apply to Internet companies. For instance, you must protect your customer’s privacy, take extra precautions if they’re paying for services online with credit cards, and follow federal and state truthful advertising laws. In some cases, you’ll be required to collect sales tax from your customers. The Federal Trade Commission offers a guide to online advertising and marketing. Seek advice from an attorney knowledgeable about Internet commerce in order to ensure that you’re following all laws applicable to your business.

Use Internet Tools to Determine Your Market

Check out other websites that are associated with your type of business. For instance, if you plan to sell woodworking tools, find websites where woodworkers gather to get ideas, engage in forums and ask questions. You’ll become familiar with your customers and might gain some insight about what kind of products they’d be excited to own.

Complete keyword research to see how many people are searching for your products each month. You’ll find many keyword tools available online. Some are free; others charge a small fee.

Learn About Internet Marketing

Marketing an online business is different than that of a local store in your hometown. Instead of signage, flyers and grand opening sales, you’ll market with online ad campaigns and use Search Engine Optimization — specific keywords on your website that helps it appear when people search for your product or service. Learn as much as you can about SEO and online marketing techniques before you start your business. Become familiar with basic techniques, then decide if you’ll do your own SEO optimization and run your own ad campaigns, or if you’ll pay a company to market for you.

Design Your Website

Your website should look professional and be user-friendly and functional. It’s the equivalent of a store or professional office; your customers’ first impressions depend on your website. If you already have web programming and graphic design skills, you can easily create your own website. If not, you can learn how to design a website, or hire someone to do it for you.


Your domain name is one of the most important aspects of your business. Ideally, you’ll find an available name that directly relates to your business and is easy to spell. Register your domain name by purchasing it through a domain company; prices for your name can vary from around one dollar to thousands. Choose a reputable company to avoid losing your money in a scam. The Internet Corporation for Assigned Names and Numbers offers a directory of companies accredited to sell domain names.

How to Check If an Online Company Is Legitimate

Nobody wants to get scammed and lose money, but with so many online business options these days, it can be difficult to tell who is telling the truth and who is lying. However, you can be your own best advocate. By devoting a little time and energy by following these simple steps, you can ensure that the online companies you do business with are legitimate–and save yourself quite a bit of headache.

Review the online company’s website thoroughly. Visit every page, read all of the fine print–terms of service/use, privacy policy, refund policies and contact information. It should be a major red flag if the terms of use/service is missing or if contact information is missing or incomplete.

Find a brick-and-mortar address. This should be listed somewhere on the website, but if not, try calling or emailing its customer service–who should be more than happy to provide you with that information. The Yellow Pages can also be a handy resource for locating a business address. Sometimes, this may simply be a post office box, but that doesn’t necessarily indicate that a business is not legitimate. There are some very reputable companies that are almost entirely web-based, but take into consideration the type of business this is and judge accordingly. If you cannot find any mailing address at all, then the company is probably not legitimate.

Call the company. Ask questions. Anyone who is selling you a product or service should be available by phone to answer questions for you.

Research the company on the web. Google the company to find out if there are any third-party reviews or customer testimonials of its product, service or business practices. There are also several scam-alert sites, like, that can advise you.

Contact the Better Business Bureau online or the Chamber of Commerce in the town where the physical store is located. Ask them about the company, whether there have been complaints or disputes, and how these issues have been resolved.

What Are the Positive Effects of the Internet on Business?

Before the Internet, businesses often found it difficult to connect to customers, speed up their service and carefully watch the business climate. The Internet has revolutionized how business is conducted and has helped create a more efficient market. Forrester Forecaster has predicted that 8 percent of retail purchases will be made online by 2014. Forrester Forecaster also reports that retail sales online totaled $155 billion in 2009.

The Internet has allowed businesses to create communities for those that share similar interests in products and businesses. These communities help businesses develop their brand and create a positive image. Businesses are able to customize products or services with ease, which increases the satisfaction of the customers and increases profits. The Internet has enabled business to obtain valuable information about the interests of certain demographics. Consequently, businesses are also able to effectively use targeted advertising by appealing to specific publishers and media that are specifically related to their product or service.

The plethora of information on the Internet enables businesses to learn about trends that may affect them, observe consumer behavior, discover products that could enhance their service or business and increase their knowledge of the industry. Information that used to be reserved for the most influential people in the industry or academics is now easier to find. The information also helps the consumers find products and services that are suitable for them. The amount of reviews and information about businesses on the Internet helps consumers feel more in control and comfortable with making a purchase. The speed of accessing information on the Internet increases the rate of decision-making of both consumers and businesses and saves time that can be used for productive activities.

The Internet bridges the gap between consumers and businesses. The advent of the Internet has made the presence of businesses global. Consumers have access to products that are abroad or across state lines. Communication between consumers and businesses is more open and transparent. Consumers can now use email, chat or forums to connect with other consumers, ask pertinent questions about the service or product, obtain customer support and offer suggestions. The communication between customers and businesses increases customer satisfaction and enables businesses to get connected to the customers. The accessibility enables businesses to further expand their service or product, which increases profit.

Easier Entry
In the past, entry into the business world was severely restricted. With the Internet, start-up and advertising costs are significantly lower. Small businesses can start a low-cost website, gain visibility and advertising through connecting with blogs, social networking and affiliate programs and even find venture capital/investors. The Internet also enables people to find talent with ease due to the use of online job boards and career-based social networking. The Internet allows businesses to research products and services in demand to gain dominance over a niche. This increases entry into small niches and reduces the chance of failure.

The Internet has eased the conditions of investing. It’s easier to track the profits of businesses and research factors from the news that may affect a business. The Internet has opened investing to more participants. Consumers can invest in businesses that they may not have discovered without the Internet.

How to Start an Online Advertising Company

Many businesses have turned to online advertising as a way to market their organizations. Online advertising offers many benefits for both large and small organizations. With the global use of the Internet, online advertising reaches a larger audience than offline advertising at much lower costs. Online advertising allows companies to put out ads to a targeted market quickly. With companies transitioning to online advertising, there is a need for online advertising companies. Starting an online advertising company doesn’t require much startup cost. The main tools you will need for your business are a computer and the Internet.

Acquire search engine optimization (SEO) skills. Search engine optimization is used to help online users find websites and blogs. It is important to have these skills because you will receive more advertising clients when your website is highly ranked in the search engines and receiving a lot of visitors.

Acquire HTML skills. If you plan to create a website to offer advertisement space, you may need to know basic HTML codes. You can attend a course that teaches HTML or search online for tutorials. Some hosting companies offer website templates that eliminate the need to know HTML.

Create an online directory. An online directory is a website that lists information about businesses. Companies use online directories as a way to advertise their businesses as they would in a phone book. You may want to create an online directory catering to a specific industry. For example, you can create an online directory for restaurants and offer listing space to local restaurants.

Create a niche website that offers advertisement space. A niche website is a site catered around a specific topic. For example, you can create a site about investing in the stock market. As your site grows in popularity, you can offer advertisement space for a certain time period. People most interested in advertising on your site will have businesses related to your niche.

Offer copywriting services. If you have experience as a copywriter, offer your services to many online and offline businesses. Internet marketers depend on copywriters to write copy for sales pages for their information products. Offline customers also depend on copywriters to write ads, newsletters, brochures and other marketing products.

Set your advertising prices. The prices you charge for advertising will depend on the services you’re offering and the length of time you’re offering those services. Check with online competitors to get a sense of what is charged in the industry.

Advertise your services to gain clients. You can advertise your company on Internet marketing forums, Craigslist and advertising websites.