The difficulty in procuring funding for dotcom start-ups has been cited by experts as the main reason for the recent demise of many local Internet ventures.

Oon Yeoh, who was in charge of the online version of The Sun daily, said the recent Nasdaq crash in the United States made it even more difficult for local dotcoms to get funding.

"Without funding, Internet start ups will have a hard time surviving because most dotcoms have a long gestation period before they see profitability," he told malaysiakini recently.

Among the local dotcoms which have closed shop in the recent past or are in the process of folding up, include the popular stock analyses sites MalaysiaStreet.com and Stockk.com, travel website Mari Mari.com, retailer 18all.com, music-based Mcities.com and e-commerce application services provider GO2020.com.

Consumer service site 1800assist.com, meanwhile, has enforced drastic cost-cutting measures including a sizable reduction in its workforce.

Oon Yeoh also added that the current economic slowdown was not helping the situation.

Dwindling appeal

He also said that it was increasingly harder to attract top talent as "most bright young professionals are no longer that starry-eyed over dotcoms anymore".

"The frenzy is over," said Oon Yeoh, who is looking forward to join a Multimedia Super Corridor (MSC) status company soon, adding that without funding and a talented workforce, even good dotcoms will have difficulty surviving.

MalaysiaStreet's Yeoh Keat Seng echoed similar sentiments as to the reasons for the closure of the one-year old site.

In a farewell notice posted at the site, Yeoh said hostile market conditions and difficulties in finding investors were reasons for the site's closure.

He said in the notice that MalaysiaStreet was merely putting into practice their own preaching that its better to cut their losses even though "we believe that many of our initiatives are drawing close to fruition."

When contacted by malaysiakini , Yeoh, simply said, "I have no further comments at this point, beyond the message put up at our website."

Unsound plans

Oon Yeoh added that investors have lost patience with dotcoms and this was the result for the funds drying up.

He said that dotcom entrepreneurs joined the fray during the dotcom frenzy without a "sound path to profitability".

"Those without a business model which can generate income in the near term will simply run out of money," said Oon Yeoh.

Online business consultants Intracomm.com senior manager Hon Mun Wah said local dotcoms, apart from having a good business model, should also cater for specific regional values in order to survive.

He suggested that local dotcoms, to survive, must fall back on traditional business values, which is to provide a cheaper, better and different concept of business.

"The concept of dependency on the Internet as a marketing platform is no longer a value proposition," he said.

This point was pertinent to the impending closure of online retailer 18all.com.

Bubble bursts

In an e-mail sent to malaysiakini by an 18all.com staff, the reason given for the closure of the site was the difficulty to "sustain an e-commerce operation of this magnitude in this country."

He added that even the positive response to the online shopping site and the dedicated efforts of the staff could not prevent the site from failing.

Despite the failures of these local dotcoms, Hon insisted that Malaysian dotcoms were not badly affected as other international ventures. This, he said, was due to the fact that local Internet ventures were slow in adopting the dotcom bubble.

"Before these local dotcoms could go into the business in a big way, the bubble had burst.," said Hon

Meanwhile, 1800assist.com former chief executive officer, Michael Soh said the government only focussed on providing tax breaks for hardware acquisitions without giving any incentive for software developers. Software development plays an important part in the dotcom set up, he said.