Report gives hope to online retailers

Management consultants McKinsey & Company yesterday offered a glimpse of hope to the battered dotcom sector, with a report showing that 20% of the dotcoms it monitors are profitable.

The company's e-performance report surveyed 200 internet businesses worldwide and covers the nine months to the end of September 2000.

According to the findings, a number of online retailers were starting to show profitability and online subsidiaries of established retailers were twice as likely to profitable than pure-play internet companies.

However, content businesses, such as sports or news sites, were failing to build viable businesses models. The cost of attracting new visitors rose from 40 cents to 90 cents per person, and advertising revenue fell from 80 cents to 50 cents per visitor.