Websites start to net profits

More than half of all profit-seeking websites are making money and a further 28 per cent expect to be profitable by the end of…

More than half of all profit-seeking websites are making money and a further 28 per cent expect to be profitable by the end of the year, according to a global survey of e-commerce sites.

The survey, by ActivMedia Research, found 54 per cent of online businesses were already profitable.

The money-losing sites were "the aggressive promotion sites and the ones trying to grab market share, cut prices, improve service and advertise widely. It's a recipe for disaster," said ActivMedia's vice-president of research, Mr Harry Wolhandler.

"The sites that actually turn out to be the real body of the Web are more humble, they're not trying to conquer the world."

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The study was based on a survey of 500 English-language websites from around the world that were seen as a representative sample of online sites.

The survey indicated that 66 per cent were intending to make a profit, while the remainder were aiming at other purposes such as promotion or cost reduction.

"Online winners garner increasing loyalty among customers willing to pay for strong service, while the losers suffer from lack of margins that inhibit the ability to compete in the service dimension, where it really counts," Mr Wolhandler said.