Network: New Media - It's a jungle over at Amazon

Talented people in new media now have so much clout they pose a threat to their fledgling industry

The unexpected departure last week of Simon Murdoch, the head of Amazon Europe, will not only have an impact on the ever more competitive online book market, it will also have a significant effect on the health of the new media industry in the UK. Home-grown talent is a rare commodity and, given the current size the new media industry, there is hardly enough of this to go round. Even an ounce of experience in new media is now much sought after. Once someone picks up enough experience in one particular area, he or she is either poached by another company or they realise that they could reap some of the benefits by starting their own business and poaching the best talent for their start-up.

It's a vicious circle. Once a person realises that only a small number of people are actually capable of doing their job, the bargaining power and clout can often become very destructive for the industry. The danger, of course, is that when such an invaluable person leaves, the inevitable questions about the future of the company are asked. Granted, this is true for most industries but, for a sector which is barely out of its infancy, yet another key departure to a start-up elsewhere is rough news. Why? Because it further weakens the pool of available talent.

With Amazon UK preparing to extend its product range to mirror that of its US site and battle against fierce competition from Bertlesmann Online, Murdoch's resignation can only have hit the company hard.

So what's Murdoch going to do? Take a break, find a market gap and then start his own business? Yup. Sources suggest that Murdoch already has plenty of funding for his next venture, given that he has recently relieved himself of the pounds 2m of Amazon stock which he gained when he sold Bookpages (which he set up in December 1996) to Amazon at the end of last year.

Amazon is hoping to lessen the blow by the appointment of caretaker manager Colleen Byrum, Amazon's head of customer services in the US, until it manages to find a "suitable replacement". Faced with the recruitment crisis and the unappealing Slough location, Byrum could end up running Amazon UK for quite a while. Part of the problem at Amazon UK, as with most UK extensions of US operations, is that the American influence in the company makes for difficult working conditions when dealing with a different local market.

Yankee invasion

A growing number of UK-based companies are now run by Americans lured by the charms of working in "cool" London, and the chance to succeed in what is, comparatively, still a burgeoning market. The old adage that the US is a year or so ahead of the UK, and so the American talent pool is much bigger, has a lot to do with this invasion, although the recent abundance of European venture capital, big salaries and company equity are also huge attractions.

News has it that BT, that bastion of all things corporate about the Internet, is looking to change the way it is perceived by young Net users and is drafting in young media managers from various fields. One of the first appointments was... guess? An American with years of experience of Internet marketing, of putting content on the web and in e-commerce. Taking the reigns as head of content and advertising, John Racza faces the task of making BT appeal to young Internet users through a funky advertising campaign and by aping the formula of music, sport and film on the content side.

Clearly, there is a market for these types of content sites, but it is a very crowded one, driven mainly by fan-based loyalty to a certain magazine or club. BT is aware that it needs to do something innovative and clever and, of course, it has the available cash. But whether it will create fantastic sites that blow the competition away has to be seen. Perhaps it should give something away for free. Internet calls might be a start, but as long as BT's main strategy is to make as much money as possible from Internet calls, that seems as likely as teaching a border collie to play backgammon.

Internet riches

A curious trend has emerged over the past few months in medialand, particularly at Murdoch-owned companies. Key personnel from traditional media, Sky's Mark Booth and the The Times's Toby Constantine, for example, have defected to new media. OK, they may just fancy a change, but many suspect the attraction is the price of Internet stocks. Internet IPOs are big news at the moment. The interest generated by Freeserve's flotation in the national press has been interesting to see, and stories that the Freeserve chiefs have become paper millionaires are attention grabbers. In the last week both QXL and Agency.com have confirmed their IPO plans and the anticipation of over-inflated share prices has been stirred again. QXL's IPO is expected to be the second-biggest Internet flotation in the UK, behind Freeserve.

With Freeserve now worth a fluctuating pounds 1.5bn, it will also be interesting to see how much value QXL's flotation can add to the two-year-old, loss- making online auction house. Analysts have tipped it to float at around pounds 400m, which would see its founder, former journalist Tim Jackson, being added to the growing list of Internet millionaires. But while QXL undoubtedly has thousands of companies and people trading via its site, it is baffling that is should be worth so much when its 1998 revenues were only pounds 2.5m.

Compare this to the $75m (pounds 46m) IPO of global interactive giant Agency.com, which took revenues of $70m (pounds 43.2m) in 1998 and is far more established with a 750-strong global workforce. It seems the only way to make a killing these days is to develop an intangible online brand and spend lots of money on offline advertising prior to flotation. I'd better finalise that business plan.

amyv@qpp.co.uk

Arts and Entertainment

Great British Bake Off
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

    They fled war in Syria...

    ...only to get stuck and sidetracked in Hungary
    From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

    Title sequences: From The Prisoner to Mad Men

    Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
    Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

    Giorgio Armani Beauty's foundations

    Sumptuous fabrics meet luscious cosmetics for this elegant look
    From stowaways to Operation Stack: Life in a transcontinental lorry cab

    Life from the inside of a trucker's cab

    From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
    Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

    Kelis interview

    The singer and sauce-maker on cooking for Pharrell
    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea