Financial Analysis Assignment on Ratio Analysis Virgin Media - Free Essay Example

The company formerly known as NTL Group Limited is a cable and telecommunication firm. It was established in 1996 from the acquisition of National Tran communications limited by international cable tel. It conduct business from its registered head office which is located i London, United Kingdom. The company telecommunications services include a national digital telecoms network end to end residential and business telecommunication, internet services, mobile radio communication, visual communications, internet services, internet satellite links and turnkey systems. The company holds several cable TV franchises for Dublin, Galway and Waterford, and all of Northern Ireland. In addition the company holds MMDS franchises for mobile telecommunication covering counties Dublin, Galway, Waterford and Mayo. The company has home businesses such as NTL UK and Ireland cable networks, ITV/C4 transmission network, and NTL Business UK and Ireland. Further the company has international business in Australia, Switzerland, France and Singapore. Background Virgin Media Inc. is an UK based media and communications company. The company is a residential broadband and mobile virtual network operator and also engaged in providing a pay television and fixed-line telephone services in the UK. Virgin Media conducts its business operations through three reportable segments, namely, Cable, Mobile and Content. The company is head quartered at New York, the US. In April 2009, sit-up Ltd., UKs most innovative home shopping retailer and a subsidiary of Virgin Media was acquired by Munich-based industrial holding named AURELIUS AG. Wondering who we are? Well, were the first people in the UK to offer you TV, Broadband, Phone and Mobile all from one place. The future is bursting with fresh entertainment and communication possibilities. Thats why were here to bring all the excitement to you and make your digital place the brilliant place it should be. Suddenly, everythings coming together, and were the first people to provide you with a unique combina tion of: TV that puts you in control Superfast and reliable broadband Phone packages that fit around you Mobile service that gives you just what you want Whatever you choose with Virgin Media, were aiming to make the whole experience as effortless as the award-winning service our Virgin Mobile customers have enjoyed for years. RATIO ANALYSIS Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a companys operations and fall into the following categories: Liquidity ratios measure a firms ability to meet its current obligations. Profitability ratios measure managements ability to control expenses and to earn a return on the resources committed to the business. Leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firms ability to raise additional debt and its capacity to pay its liabilities on time. LIQUIDITY RATIOS Working Capital: Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due. Current Assets Current Liabilities Acid Test or Quick Ratio: A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a businesss quick ratio will be lower than its current ratio. It is a stringent test of liquidity. Securities + Cash + Marketable Accounts Receivable Current Liabilities Current Ratio: Provides an indication of the liquidity of the business by comparing the amount of current Assets to current liabilities. A businesss current assets generally consist of cash, marketable securities, accounts receivable, and inventories. Current liabilities include accounts payable, current maturities of long-term debt, accrued income taxes, and other accrued expenses that are due within one year. Current Assets Current Liabilities PROFITABILITY RATIOS This ratio reflects the overall profitability of the business. It is calculated by comparing the profit earned and the capital employed to earn it. Return on Capital Employed = Profit before Interest, Tax and dividend *100 Capital Employed Return on shareholders funds This ratio reveals how profitably the proprietors funds have been utilized by the firm. Net profit after interest tax Total shareholders funds Net profit ratio This ratio shows the relationship between net profit and sales. Net Profit Ratio = Net Profit * 100 Net Sales Earnings per Share This ratio measures the profit available to the equity shareholders on a per share basis. All profits left after payment of tax and preference dividend are available to equity shareholders. EPS = Net Profit Dividend on Preference Shares No of equity shares Dividend per Share DPS is the dividend distributed to equity shareholders divided by the no. of equity shares. DPS = Dividend paid to Equity Shareholder No. of Equity Shares Earnings and Dividend Yield This ratio is closely related to EPS and DPS. While the EPS and DPS are calculated on the basis of the book value of shares, this ratio is calculated on the basis of the market value of shares. Earnings Yield = EPS * 100 Market value per share Dividend Yield = DPS * 100 Market value per share Price Earnings Ratio It is computed by dividing the market price of a share by the EPS. PE Ratio = Market Price of the share EPS SOLVENCY RATIOS Debt Equity Ratio This ratio explains the relationship between the long term debts and share holders funds. Debt Equity Ratio = Debt Equity Debt to Total Fund Ratio This ratio is a variation of the Debt Equity Ratio and gives the same indication as the debt equity ratio. In this ratio, debt is expressed in relation to total funds. Debt Total Funds Ratio = Debt Equity + Debt EFFICIENCY RATIOS Sales to Working Capital (Net Working Capital Turnover) Indicates the turnover in working capital per year. A low ratio indicates inefficiency, while a high level implies that the companys working capital is working too hard. Net Sales Average Working Capital Financial Statement: Profit and Loss A/c: Particular 2008( millions) 2009( millions) Turnover 3776.8 3663.9 Operating Profit -271.8 132 Net interest -473.3 -448.9 Profit Before Tax -860.2 -352.8 Profit after Tax -853.4 350.3 Balance Sheet: Particular 2008( millions) 2009( millions) Intangible Assets 2592.6 2283.7 Tangible Assets 5342.1 5045.8 Fixed Investment 353.5 359.9 Total Fixed Assets 8877.8 8087.5 Cash at Bank or in Hand 181.6 430.5 Total Assets 9933.3 9190.5 Creditor Amount 1475.1 1352.2 Creditor Amount after 1 year 192.7 288.8 Total Liability 7917.1 7698.7 Net Assets 2016.2 1491.3 Ratio of Virgin Media: Items 2009 2008 Current Ratio 1.23 1.42 Liquidity Ratio 1.23 1.42 Shareholder liquidity ratio -0.53 0.67 Solvency Ratio 18.63 -41.68 Assets Cover 4.11 1.31 Gearing (%) 361.03 n.s Return on Capital Employed 130.88 -40.30 Return on Total Assets 60.67 -14.92 Ratio Analysis of Virgin Media: In the analysis I got the ratios from profit and loss, balance sheet. There has different ratios like current ratio, liquidity ratio, shareholder liquidity ratio, solvency ratio, assets cover, Gearing Ratio, return on capital employed, return on total assets. So the analyses of this ratio are as follows: In the current ratio the ratio in 2008 is 1.42 whereas in the year 2009 ratio is 1.23. So its slightly decrease from 2008. In the liquidity ratio also it has the same position in both the year. Like as the current ratio. With 1.42 in 2008 and 1.23 in 2009 In shareholder liquidity ratio, in 2008 it has 0.67 and in 2009 it has negative position as -0.53. So, it has also decrease from 2008. In Solvency ratio, in the year 2008 the ratio is -41.68 and in 2009 it has 18.63. So we can say that it has increase as comparison to 2008. In Assets covering ratio, in the year 2008 1.31 value and in 2009 it has 4.11 values. And it is also good for the company. In the return on capital employed, in the year 2008 value is -40.30 has negative value. And in 2009 it has 130.88. It is also good for the company. In the return on total assets, ratio in the year of 2008 has -14.92 which is not good for company. But in the year 2009 it has good value as comparison to 2008 and got 60.67 values. Conclusion: Provide key company information for business intelligence needs The company strengths and weakness and area of development or decline are analyzed. The opportunity open to the company are considered and its growth potential assessed. Competitive or technological threats are highlighted. The report contains critical company information business structure and operations, the company history, major products and services, key competitors, key employees and executive biographies, different locations and important subsidiaries. The report provides detailed financial ratio for the past years as well as interim ratio for the last four quarters. Financial ratio includes profitability, margins and return, liquidity and leverage, financial position and efficiency ratio.

Bullying And Cyberbullying - 782 Words

Childhood may be good or bad memories we had, we may have encountered that troubled individual, typically known as the â€Å"bully† that drove fear in the hearts of the weakest link by humiliating them, taking what is rightfully theirs, constantly picking on them. Over the decades, the word â€Å"bully† took place in the mid 1530s, bullying involves two people, a bully and a victim, which the bully abuses the victim through physical, verbal, or other means in order to gain a sense of superiority and power, according to â€Å"Bullying and Cyberbullying†, Richard Donegan. Bullying can happen anywhere and anytime. Sometimes bullying can happens online or through a cell phone, or face-face.There are different types of bullying, including physical bullying,†¦show more content†¦In today’s world young people easily access to the entire world through the use of computers, cell phones, and other electronic devices. Cyberbullying is defined as any form of repeated harassment to a person using electronic devices and the internet. It is a growing issue that youth are facing today. Studies have shown that one third of students have faced cyber bullying in their life. According to Cyber bullying statistics from the i-SAFE foundation, over half of adolescents and teens have been bullied online and repeatedly through their cellphones or the Internet. Also, more than 1 in 3 young people have experienced cyber threats online. Cyberbullies often say things that they do not have the courage to say face-to-face because technology makes them feel anonymous, insulated and detached from the situation. Anonymous is very power because online bullying is mean and cruel, in the article â€Å"Cyber Bullying Statistics.† Cyberbullying happens frequently and about 15% of high school students (grades 9–12) were electronically bullied. Bullying never stop no matter what unless someone stands up. Social media is designed to build a relation among people, by sharing their interests and communicate with one another. But social media can bully people easily such as verbal abuse, gossip or other actions that cause mental and emotional harm. Social bullying involves spreading rumors about another person, purposely leaving someone out of anShow MoreRelatedThe Bullying Of Cyberbullying And Bullying892 Words   |  4 PagesVictimization of cyberbullying Bullying does not just exist in the schoolyard. With the twenty- first century internet is what people use now. And Internet has changed to being a use full tool, to now were people kill people s self-esteem ,and more. Cyberbullying has become a big problem around the world and it needs to stop. Cyberbullying really started when the internet was available to everyone. 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The authors goal is to educate parents, teachers, and the community about the growing cyberbullying problem among children and adolescents. An additional goal of the authors is to empower adults, amongst our youth, to prevent bullying. Many adults, whether in the community or in the schoolRead MoreBullying : The Causes And Effects Of Cyberbullying1508 Words   |  7 PagesCyberbullying is usually between a few students that are in the same class or even in the same age group. A lot of people think they know what cyberbullying and bullying is but they are not the same. Cyberbullying can affect a kid as much as physical bullying. Cyberbullying has been proven to affect one out of every three children. There are seven or more different ways a person can be cyberbullied. It can lead to person a harming themselves or others being harmed. 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Barbie Doll Fantasy Exposed in Marge Piercy’s Barbie Doll...

Is Barbie the model woman? For generations girls have played with this doll and many have aspired to be just like her: the party girl, career women and the beauty queen all wrapped into one. In Marge Piercy’s poem entitled â€Å"Barbie Doll† the title foreshadows the theme of the poem which is that girls are ultimately and fatally entrapped by society’s narrow definitions of feminine behavior and beauty. When Piercy compares the young lady in the poem to a Barbie doll she is revealing the irony of the title. In â€Å"Barbie Doll† the speaker is aware of the events taking place in the young girls’ life; however, the speaker does not know how the young girl feels about the events that are taking place. I believe Piercy did this so†¦show more content†¦These toys are not only items that a young girl might like to have but they are toys that are considered feminine in nature. The toys symbolize the gender roles that girls are taught even at a young age. Much like Barbie, girls are expected to act a certain way and to enjoy certain activities just because they are considered feminine. The doll, miniature stove and miniature iron are all items that represent being a mother and a housewife. The girl is being told at a young age, a â€Å"perfect woman† knows how to raise children and take care of a house, even Barbie comes with a baby, a line of pink pots and pans to scrub and an iron for her to iron Ken’s clothes with. This girl, at a young age, was being told the social norms that she would be expected to follow as she got older. The cherry flavored red lipstick the young girl is given to play with seems innocent at first glance; however, red lipstick is viewed as a sensual shade for any woman to have in her makeup collection. The young girl applying a sensual shade of lipstick at a young age shows how women are expected to be sexual appealing, just like Barbie, and this sexuality is being introduced too early in life. In keeping with the fairy-tale like tone of the first stanza, Piercy makes puberty sound like something wonderful by referring to puberty as â€Å"magic†(5). Even though the young girl has gone through a magical phase in her life, the young

Innovations In Behavioral Marketing And Essay Example For Students

Innovations In Behavioral Marketing And Essay MARKETING MANAGEMENTTERM PROJECT?Innovations in Behavioral Marketing and Electronic Commerce?Date: June 15, 2000Table of ContentsPreface1? . Introduction? . Benefits of Electronic Marketing? . Effectiveness of E-CommerceI. Ways for Promoting your WebsiteII. Learning about your VisitorsIII. Segmenting your Internet Market? . E-Commerce in LebanonI. Lebanese Companies on the NetII. Customer Adaptation to E-Commerce Websites? . ConclusionI. IntroductionAn online marketing channel is one that a person can reach via computer and modem. A modem connects a computer to a telephone line so that the computer user can reach various online information services. There are two types of online channels:Commercial Online Channels: Various companies have set up online information and marketing services that can be accessed by those who have signed up for the service and pay a monthly fee. The best-known online services are: CompuServe, America Online, and Prodigy, with more than 3,200,000, 3,000,000, and 1,600,000 subscribers respectively. These online channels provide subscribers with five main services: information (news, libraries, education, travel, sports, reference), entertainment (fun and games), shopping services, dialogue opportunities (bulletin boards, forums, chat boxes), and E-mail. The Internet:The Internet is a global web of some 45,000-computer networks that has made instantaneous and decentralized global communication possible. Originally established to facilitate research and scholarly exchanges, the Internet is now available to a much broad audience, some 25,000,000 people. Users can send e-mail, exchange views, shop for products, and access news, food recipes, art and business information. The Internet itself is free, though individual users may need to pay a commercial service to be hooked up to it. II. Benefits of Electronic MarketingWhy have online services become so popular? First, they provide three major benefits to potential buyers:? Convenience: Customers can order products 24 hours a day wherever they are. They do not have to sit in traffic, find a parking space, and walk through countless aisles to find and examine goods. And they do not have to drive all the way to a store, only to find out that the desired product is out of stock. ? Information: Customers can find reams of comparative information about companies products, and competitors without leaving their office or home. They can focus on objective criteria such as prices, quality, performance, and availability. ? Fewer hassles: With online services, customers do not have to face salespeople or open themselves up to persuasion and emotional factors. Second, online services also provide a number of benefits to marketers:? Quick adjustments to market conditions: companies can quickly add products to their offering and change prices and descriptions. ? Lower costs: Online marketers avoid the expense of maintaining a store and the accompanying costs of rent, insurance, and utilities. They can produce digital catalogs for much less than the cost of printing and mailing paper catalogs. ? Relationship building: Online marketers can talk with consumers and learn much from them. Marketers can also upload useful reports, or a free demo of their software, or a free sample of their newsletter, onto the system Consumers can then download these items into their electronic mailboxes. ? Audience sizing: Marketers can learn how many people visited their online site and how many stopped at particular places on the site. This information can help the marketers improve their offers and ads. Clearly, marketers will want to consider using online services to find, reach communicate, and sell. Online marketing has at least four great advantages. First, both small and large firms can afford it. Second, there is no real limit on advertising space, in c ontrast to print and broadcast media. Third, information access and retrieval are fast, compared to overnight mail and even fax. Fourth, shopping can be done privately and swiftly. However, online marketing is not for every company or for every product; thought has to be given to if, when, and how it should be done. III. Effectiveness of E-CommerceIn order for your company to be effective in its electronic commerce, some conditions must be satisfied. For example, your company should promote its web site properly in order to attract visitors who are the companys potential customers. Thus the more the visitors, the higher the probability of having more customers. Another point of concern is the size of the Internet, which constitutes a humongous market. Therefore, attacking it as a whole would be a difficult task for the company. That is why companies usually tend to segment the market into small niches to give each of them an equivalent portion of the companys attention. In addition, the company must keep in mind that there are millions of surfers with different wants and needs, different age groups, sexes, ethnicity, social lifestyles, educational levels, and so on. This issue pushes almost every company with a web site running online to start knowing its online customers in order to serve them best, knowing that online competition is increasing vastly each and every day. A. Ways for Promoting your WebsiteThe most important first step is to register your site with the main Web search engines, so we begin with steps to prepare your Web pages for optimal indexing. 1. Write a Page Title. Write a descriptive title for each page of 5 to 8 words. Remove as many filler words from the title, such as the, and, etc. This page title appears on the Web search engines when your page is found. Entice surfers to click on the title by making it a bit provocative. Use some descriptive keywords along with your business name on your home page. For example, instead of LAU use LAU ? Leading University in Middle East . The more people see in the blue highlighted portion of the search engine that interests them, the more likely they are to click on the link. 2. List Keywords. To get your juices flowing, sit down with some associates and brainstorm a list of 50 to 100 keywords or key phrases the kind of words or phrases someone might search on to find a business or site lik e yours. Then refine the list to the most important 20 or so. Those words are placed at the top of the Web page internally not visible on the page in a META tag1. Search engines use them in order to locate the site. Note however, that some research on search engine algorithms indicates that a fewer number of keywords may help you better target the most important search if you are working to increase your pages ranking on the search engines. Consider using both lowercase and capitalized forms of your very most important words, since some search engines are case-sensitive. 3. Write a Page Description. Select the most important 20 keywords, and write a sentence or two. You do not need to repeat any words used in the page title. Keep this readable but tight. Those words are placed at the top of the Web page internally in a META tag1 too. They will appear in the search result of search engines when a user requests a search for one of the specified keywords. 4. Submit Page to Search Engines. Next, submit your page to the important Web search engines and directories. The most important search engines that robotically spider or index your site are: Yahoo, AltaVista, Excite, HotBot, Lycos, Infoseek, WebCrawler, and Northern Light. 5. Request Links on Industry Sites. You probably belong to various trade associations that feature member sites. Ask for a link. Even if you have to pay something for a link, it may bring you the kind of targeted traffic you crave. 6. Include URL on Stationery, Cards, and Literature. Make sure that all reprints of cards, stationery, brochures, and literature contain your companys URL. And see that your printer gets the URL syntax correct. In print, it is recommended leaving off the http:// part and including only the www.domain.com portion. This way it is easier to memorize. 7. Promote using traditional media. Do not stop print advertising you have found effective. However, be sure to include your URL in any display or classified ads you purchase in trade journals, newspapers, etc. View your website as an information adjunct to the ad. Catch readers attention with the ad, and then refer them to a Web page where they can obtain more information or perhaps place an order. Sometimes these ads are more targeted, more effective, and less expensive than online advertising. Consider other traditional media to drive people to your site, such as direct mail, classifieds, post cards, etc. 8. Develop a Free Service. It is one thing to say, Come to our site and learn about our business. It is quite another to say Use the free kitchen remodeling calculator available exclusively on our site. Make sure that your free service is closely related to what you are selling so the visitors you attract will be good prospects for your business. Give visitors multiple opportunities and links to cross over to the sales part of your site. 9. Request Reciprocal Links. Find complementary websites and request a reciprocal link to your site (especially to your free service, if you offer one). Develop an out-of-the way page where you put links to other sites so you dont send people out the back door as fast as you bring them in the front door. 10. Issue News Releases. Find newsworthy events (such as launching your free service), and send news releases to print and Web periodicals in your industry. 11. Request Links from Business Link Sites. Especially if you offer a free service, you can request links from many of the small business linking pages on the Web. When you have something free to offer, many doors open to you. Surf the Net looking for places that might link to your site. Then e-mail the site owner or Webmaster with your site name, URL, and a brief 200-word description of what you offer there. 12. Capture Visitor E-mail Addresses and Request Permission to Send Updates. On your websites response form, include a checkbox where the visitor can give you permission to e-mail updates about products or services. Now your e-mails to visitors are not Spam. You are responding to their request for more information. It is recommended capturing first and last name in separate fields so you can market personally to them. But only ask for the information you need or they wont fill it out. 13. Publish an E-Mail Newsletter. While its a big commitment in time, publishing a weekly, monthly, or quarterly newsletter is one of the very best ways to keep in touch with your prospects, generate trust, develop brand awareness, and build future business. You can distribute your newsletter using your e-mail program, or have people subscribe on your website directly to a listserver program offered by your Internet Service Provider. 14. Install a Signature in your E-Mail Program. Most e-mail programs such as Eudora, Netscape, or Outlook allow you to designate a signature to appear at the end of each message you send. Limit it to 6 to 8 lines: Company name, address, phone number, URL, e-mail address, and a one-phrase description of your unique business offerings. Look for examples on e-mail messages sent to you. 15. Promote Your Site in Mailing Lists and News Groups. The Internet offers thousands of very targeted mailing lists and news groups made up of people with very specialized interests. Do not use aggressive marketing and overtly plug your product or service. Rather, add to the discussion in a helpful way and let the signature at the end of your e-mail message do your marketing for you. People will gradually get to know and trust you, visit your site, and do business with you. 16. Announce a Contest. People like getting something free. If you publicize a contest or drawing available on your site, you will generate more traffic than normal. 17. Join a Banner Exchange Program. Essentially, you agree to show a rotating banner on your site for other Link Exchange members, and they do the same for you, and there is a possibility youll earn something through paid banner ads, too. 18. Purchase Banner Ads on Appropriate Sites. You may need to spend money to boost traffic by purchasing banner advertising. Choose sites that seem to attract the kinds of people who would be good prospects for your business or product. You can find media brokers who can help you find appropriate and cost-effective places to advertise, especially if you have a significant advertising budget for branding purposes. Things Fall Apart Essay PaperA. Lebanese Companies on the Net Roula Mousa, managing director of Netways, could hardly control her excitement while speaking on the global implications the World Wide Web will have on the worlds future. Speaking at a workshop hosted by the ministry of economys trade information center she pointed to the range of benefits that being plugged into the Net could bestow. If a company needs to know how their stocks are doing on the Beirut Bourse, it can always just punch in *www.bse.com.lb* and get the days closing prices. Want to check out new real-estate investment opportunities in the country? Check out *www.homesandland.com* and you can get a listing of land and property for sale according to your specifications. The possibilities are endless, but ?its a war here,? she said. If a company wants to compete in todays global village, it needs to learn how to market and sell its products, recruit employees and search out clients, all over the Net. For this r eason, the ministry of economy will be hosting free Internet workshops for Lebanese companies on a monthly basis. There are more than 100m Internet subscribers across the world, of which 60 per cent are in the US. Of that number, 100,000 are from Lebanon, half of them university students. There are more than 8m websites on the World Wide Web and, according to the estimates, more than 5,000 Lebanese companies are represented on the Net. Some have made it into a valuable tool. Exotica is an example. Through its website at *www.exotica.com.lb* a client can order, pay by credit card and have delivered an order of flowers or a potted plants, without having to do more than click a mouse button. The typical Internet E-Commerce includes catalog-shopping merchandise, distribution, wholesaling and other commercial activities. The success of these solutions will be driven by consumer confidence in the security and confidentiality of their transactions. The basic way to handle commerce via the internet is to setup an HTML form where users can enter the items they wish to buy, shipping address and credit card information. By using a secure socket layer (SSL), server and browser will ensure that third parties cannot discover the credit card information. Alternative way to increase the security of credit card transaction is to use a trusty transaction company between the merchant and customer, so the merchant does not see the customers credit card number. II. Customer Adaptation to E-Commerce WebsitesReaching the world, and more specifically lucrative Arab markets, does not need grandiose planning. Computers are spreading and making Arab citizens potential consumers to an electronic form of commerce dominated by multinational firms with huge financial and technological resources. Despite foreign competition, the Internet can fuel economic growth in our country. E-commerce is practiced differently between the two powers that dominate virtual business in the world, Europe and the United States. European e-commerce is mostly comprised of retail selling, such as buying flowers, cameras and computers on the Internet using credit cards, or other ?secure? payment methods designed not to let financial accounts fall into the wrong hands. In the U.S., there is a large and increasing consumer appetite to buy goods and financial services on the Internet, but firms also rely on the Web for their supplies and to keep stocks at a minimum through wha t is known as ?business to business? transactions. In Lebanon, the volume of both types of virtual trading is negligible. Businesses tend to think of the Internet as a method of displaying their goods and services on-line, not as a tool to increase sales and cut costs. At the global level, forecasts for e-commerce growth are quite daring: From $59 billion last year, international consultants Deloitte says that virtual trade would cross the $1 trillion barrier by 2002, mainly from business-to-business deals. Asia, it seems, is destined to continue lagging behind with a less than $50-million share compared to more than $800 million for U.S. businesses. Such calculations cast of grim shadow over the Arab East, which is already being left behind the rest of the world economy in the traditional fields of industry and services. The vast majority of Asias e-commerce is conducted in advanced nations such as Singapore and Japan. What can we expect then from Arab businesses? How can we avoid being confined to another footnote in the globalization story? The Arab virtual market is small. The U.A.E. is the most virtual with more than 200,000 Internet surfers up to April. Lebanon is in good shape with respect to its Arab neighbors and is not very far from 100,000 subscribers. The Syrian government limits the spread of the Internet to its citizens who dial-up using Lebanese providers. Saudi Arabia is finally booming after the government allowed a highly censored Internet to reach the population. In terms of personal computers, we notice that Saudi Arabia has formidable infrastructure (almost 1 million PCs), which justifies the Internet explosion there. The Levant enjoys much less purchasing power, but hopefully economic liberalization will finally hit the whole region, raise the standard of living and spread computers more rapidly to an eager, multi-lingual and educated population. One of the very few studies I managed to come across showed that 9 percent of Arab Internet s urfers make on-line purchases. But the market for credit cards, the main settlement mechanism on the Internet, is also growing. Lebanons 30,000 credit cards two years ago are have exceeded to 100,000 in 1999, and is expected to rise to 300,000 in 2001 with banks such as Credit Libanais working to introduce state of the art chip-based plastic. Lebanon defines itself on the virtual map by a set of encouraging numbers and some innovative approaches to e-commerce. A liberal business code has allowed the spread of tens of Internet firms that are competing primarily by undercutting each others prices and making the costs of accessing the Web among the lowest in emerging markets. Lacking huge RD budgets, Lebanese firms are devising low cost, yet effective, ways to wipe consumer fear of the Internet. Fransabank began by introducing a credit card with a monthly limit of $100-$200 to be used when making on-line purchases. If a credit card number is stolen, the resulting losses would be minima l. Other banks among them Lebanon Gulf Bank, Credit Libanais, Blom, Audi, Inaash have followed with even lower limit Internet pre-paid cards. Local service providers are teaming up with international firms to market the secure payment methods adopted internationally, such as Data Management, which linked with Kleline, and Inconet with Global Sign. While a major credit card issuer, CSC has teamed with Moscanet for providing a new way of secure payments in Lebanon. Another positive development has occurred on the Web itself. Some firms managed to break from the monotony and dullness that characterized Arab sites and carved a niche of selling goods to a large base of Lebanese expatriates, such as sweets manufacturer Hallab. In the financial industry, customers of the Arab Finance Corporation trade on-line. Despite these bright spots, the market is stagnant and has not reached an international level of maturity. Most sites are dull, slow and difficult to manipulate. I tried to buy a bo ok on-line from a local site. I only had a choice of the latest available publications (about six books) and waited for what felt like a decade for the necessary page to open. It was much easier to go to the bookshop, buy the book and come back before the page finished downloading. So there is huge room for technological improvements to make the Internet faster and the connection more efficient. But a fair bit of investment is needed to upgrade system speed, create sophisticated sites and conduct large-scale marketing campaigns to familiarize the consumer and merchant with the new medium, especially the business-to-business side. The probability that such investments can be made through the small firms that form the market is tiny. Their small sizes limit their access to finance and the amount of salaries they can pay specialists capable of taking the e-business a step up. (Majzoub R., downloaded from http://www.dailystar.com.lb)V. ConclusionIndividuals will be able to process docum ents and pay their bills using the governments network. Mohammed Amin of the Ministry of Economy and Trade made the announcement and several conceded that at present there are obstacles in the path to the future incomplete telecommunications infrastructure, non-existent e-commerce legislation and a lack of consumer awareness. ?Electronic commerce and its various services represent an easy and inexpensive opportunity for Lebanese businesses to compete on the regional and global markets,? said al Amin, director-general at the ministry. ?The public and private sectors are both responsible for the development of e-commerce in Lebanon,? said Amin. ?The Lebanese government intends to play an active role in this area.? The government strategy includes the creation of a flexible legislative framework for electronic commerce and its adoption as the model in government transactions. The government also hopes to encourage small and medium sized businesses to adopt new technology and increase investment in information technology education and infrastructure. Louis Hobeika, chairman of Sodetel, stressed the importance of IT development in all companies. ?Speeding transactions and minimizing costs is the key to doing business,? he said. ?Electronic-commerce helps businesses reach this target.? According to Hobeika, certain drawbacks limit the propagation of electronic-commerce in Lebanon, including slow network speed, consumer awareness and secure transactions. ?Fraud on the Internet is a major concern for an e-commerce company,? he said. ?But the fact is that less money is lost to Internet fraud than mobile phone fraud.? According to Forrester Research, only $1 is lost to Internet fraud per $1,000 revenue transactions, compared to $19.63 for the cellular phone industry. Electronic-commerce turnover reached $59 billion in 1998, mainly in business-to-business deals. ?In the future, technology will allow people to bypass local authorities such as Customs,? said Salah Rustom, president of CIE Lebanon. ?Governments that show flexibility in their legislature will benefit more than those who dont,? he added. ?The Beirut Chamber of Commerce is working on a proposal to facilitate the movement of information, goods and services,? said Hobeika. ?Few Lebanese companies make use of their website for business,? said Rami Majzoub, sales executive at Reuters. ?They use it mainly for promotional purposes.? Majzoub suggested that e-commerce could help Lebanon regain its global muscle, but that the market was still in its infancy and needed incentives to grow. ?Lebanon has the competitive advantage in certain areas including low dial-up costs, a growing number of credit card holders, and businesses that recognize the potential of the web,? said Majzoub. ?But the industry is still at a crossroads and needs to consolidate and attract joint venture capital to grow to its full potential.? Majzoub invited businesses to recognize the electronic market, and to act now becaus e tomorrow is too late. __________________________________________________________________Foot Notes:1) Meta tag: is a programming script tag used in HTML (Hyper Text Markup Language), which is used for developing web sites. This tag includes a description of the web site and some keywords that describe the web site. The purpose of it is to allow search engines to index the web site for users to easily locate it. Example: *META NAME=KEYWORDS CONTENT=university, education, Lebanese American University, etc **META NAME=DESCRIPTION CONTENT=LAU is the leading university in the Middle East etc *2) Merchant: is a company that links between the web surfer and the company of the web site. It ensures that the credit card of the surfer is valid, that he has the amount of money to be paid in the bank, and transfers the needed amount from his account to the companys bank account. Bibliography1. Majzoub, Rami. Seminar on e-commerce at the Bristol Hotel. September 1999 (http://www.dailystar.com.lb)2. Al-Ittihad Al-Iktissadi. 30th Edition, February 2000. (pp. 29). 3. Haraky, Aly. ?Future of Commerce is Digital: Point and Click?. August 1999. (pp. 1). http://www.dailystar.com.lb4. Wilson, Ralph F. ?The Web Marketing Checklist?. Web Marketing Today. Issue 57, June 1, 1999. 5. ?Preparing a Customer Profile for Your Internet Marketing Plan?. Web Marketing Today. Issue 76, April 1, 2000. Marketing and Advertising