The evolution of investment in e-commerce firms, particularly web-only firms, continues to receive attention in the press. Needless to say, rational economic behavior suggests that investors would require a high return to invest in unproven but potentially profitable endeavors.
After all, some innovations struggle but succeed, while others arrive too soon for the technology, arrive too soon for the market, or are not commercially successful for a wide variety of other reasons. The rapid reassessment of the business prospects of some e-commerce firms during the course of last year is a reflection of this reality.