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New Zealand -- Hub Of The New Economy? (part deux) 12 July 2000 Edition
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Yesterday's piece on the Dubai Internet City in which I asked the question "why can't we do it better?" drew quite a bit of feedback from readers.

Without exception the consensus appears to be "indeed why not?" and nobody could provide any reason why we could or should not go ahead and do it.

A reader from Dubai (yes, Aardvark has at least one reader there) agreed that there is a huge potential for NZ to develop something similar. He says there's already been very strong interest from many "big name" players to establish a presence in, or relocate to, Dubai's Internet City.

Other readers agreed that a New Zealand Internet City and free trade zone would have the potential to make this country a real player in the new economy.

I know that this column is read by some of the Beehive brigade -- I'd ask them to make sure that those who should be considering this option are aware that it could be one of the cheapest and most effective methods this country has to leapfrog Australia and many of its other competitors.

Mind you, as I said yesterday, I hold absolutely no hope that the Labour/Alliance coalition would consider this for one microsecond. After all, it is scared that simply classifying legitimate R&D costs as an expense would throw the nation's books out of balance -- my God, what would a tax-free, free trade zone do?

So let's not hold our breaths waiting for a positive response from Government -- let's just stick to the whacky notion that throwing a few million into regional job creation will produce the kind of long-term results this country needs. I'm sure that those new tee-shirt factories in Taranaki will help keep us firmly rooted in the 20th century.

I know for sure that if this was something that could be accomplished by the private sector alone -- it would already be well underway. Unfortunately, when it comes to creating a tax-free, free trade zone, you need the government's cooperation -- and it seems they are far too short-sighted, frightened, backwards-looking, or maybe just plain stupid to consider such treason.

Will NZ Websites Ever Make A Profit?
I suspect that this is a question challenging many of the country's fattest wallets and brightest minds (not that the two are often found in close proximity to each other).

With global banner ad rates falling like a brick, pure content sites are hurting -- and hurting bad. In fact many online publications are now finding that it costs far more just to deliver a web-page than the revenues generated by any ads on that page. APBNews.com, Salon.com, ABC.com, Oxygen.com and a raft of other content sites have either shut down or been forced to cut back hard on staff and other costs.

And of course e-tailers are also smarting. Amazon.com continues to show a widening gap between revenues and losses, Flying Pig isn't bringing home the bacon for its investors and then there are the tragic wrecks such as Boo.com that sit, burnt out, on the side of the information superhighway.

So, with all this tragedy afflicting so many sites, even in markets as large as the USA, how are little old NZ sites going to make a buck?

There's an unfortunate truth on the Web -- it costs just as much to produce and run a site that addresses a global audience of hundreds of millions as it does to produce and run a site that addresses a local audience just one thousandth the size.

If Amazon can't spin a buck in the USA and virtually every other content-based US website is running at a loss -- are local sites which target a local audience forever doomed?

After all, even the highly profitable Yahoo.com couldn't make a dollar in the New Zealand market alone.

As always, your feedback is welcomed.

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