Tech notes

May 25 2006 By Herb Kim, The Journal

In the past year, two of the most outrageous ideas imaginable have paid off in a big way for their creators thanks to the internet.

First came the Million Dollar Home Page, an idea thought up by 21-year-old student Alex Tew to pay for his education. Tew sold a million pixels of advertising space for a dollar each on his website MillionDollarHomePage.com - raking in $1m.

Then news broke of Canadian Kyle MacDonald's quest to barter his way up from a humble red paperclip to a house via his personal website OneRedPapercclip.Blogspot.com. Incredibly, MacDonald is already on the brink of achieving his dream. Obviously, these two ideas are hardly sustainable or scaleable business models but, as we move towards Web 2.0, many new internet businesses are being formed, funded, floated and sold for massive sums. PartyGaming in Gibraltar, Baidu in China and Daily Candy in Washington are just some. Even good old Silicon Valley is seeing its share of the action with Yahoo's purchase of online photo-sharing site Flickr.

Sound familiar? Massive sums of venture capital being pumped into new internet start-ups operating with little or no track record; traditional media firms fighting each other over rights to large online communities; stock markets hitting record levels? Don't worry. I don't think we are about to experience Dot.com Bubble 2.0.

It's thanks to Google and the growing sophistication of advertisers that websites supported by advertising revenues are, finally, proving to be a viable and profitable business proposition. This is fuelled by huge increases in commercial and domestic online buying combined with the cheaper costs of building and maintaining technology-based businesses.

You should investigate the phenomenon of virtual online communities like Second Life or massively multiplayer online games like Everquest or World of Warcraft. Globally, millions of people are playing these online games and some are getting so obsessed with their online world that they are paying hard cash via eBay-type websites to acquire the game's assets.

So, the net has opened up tremendous opportunities for small companies to win big and many regional companies have benefited by exploiting this.

At Codeworks, we've seen enough talent and enough terrific ideas to know that the next Google need not come from Silicon Valley - but from Tees or Tyne Valley instead.

* Herb Kim is chief executive of Codeworks, the North-East's centre of excellence for digital technology.