Old and new money can find dotcom success

The old and new economies can work in perfect synergy to find dotcom success, says John Menzies' IT director, Frank Coyle. Julia...

The old and new economies can work in perfect synergy to find dotcom success, says John Menzies' IT director, Frank Coyle. Julia Vowler reports

Much hot air has wafted back and forth about whether or not the new economy marks the beginning of the end for the old economy. But perhaps the future is hybridisation. Hybrid vigour has long been cultivated by horticulturists when cross-breeding plants. Will the same be true of the old and new economies?

Frank Coyle, IT director at old-economy magazine and newspaper distributor John Menzies, believes so. Menzies has just bought a share in a dotcom start-up, Magazineshop.co.uk, which is a two-year-old online Web business where consumers can browse through around 800 consumer and business titles from more than 80 publishers, select what they want, take out a subscription and pay for it over the Internet.

The subscription is maintained by Magazineshop, which makes its money by taking a slice of the cover price, but at the moment the order is passed back to the magazine's publisher which passes it on to its - usually third-party - fulfilment houses.

There, all too often, the order can languish for weeks before the ordered and paid-for magazine finally appears in the post - not exactly the "instant" experience that Web-shoppers are taught to expect. But Menzies has it all sorted.

"We've squeezed the cost of delivery right down, and fine-tuned an existing infrastructure," says Coyle.

The word synergy comes to mind. "We don't have their skills, they don't have ours," points out Coyle.

But cross-breeding the two businesses should produce hybrid vigour for just that reason.

"Many good, small dotcoms are going to the wall - it doesn't take many mistakes to go under," he says. "Some will stay standalone and won't want a merger with a traditional company."

Others see merging or partnering with a bricks-and-mortar company as a fast way into the big league, just as the bricks company sees the clicks company as a fast way into Webland.

And, points out Coyle, one of the main differences between small and big companies is their IT infrastructure. The archives are already filling up with tales of dotcoms underscoping their IT set-up and falling over on the front page. On the other hand, words like enterprise computing, scalability, reliability, failsafe, backup, security and 24/7 - let alone big-money purchasing power with suppliers - are familiar mantras to bricks-and-mortar companies.

"We can bring in our experience of large-scale, high-volume online transaction processing, and expand their knowledge of what's achievable," says Coyle. "If we didn't partner [with a dotcom] we wouldn't get its innovative flair."

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