Simply stated, networking is contact to establish relationships that can lead to business. Sometimes path to business is direct; other times it is indirect such as referrals. The person you know knows someone else who needs your products/services.

Networking means making these contacts and building on them by talking with people about what you do and who you are. It also is in turn, listening to them to see how you might assist them in what they do.

These contacts, people you need to know or people that can help you, might be right under your nose. To help build that list, answer following:

1. Who has taken an interest in you lately or in past? 2. Who have you been good friends with? 3. Who do you always talk business with when you get together? 4. Who has helped you or offered encouragement or advice in your business. 5. Who do you go to when you have a challenge or particular need? 6. Who comes to you for help? 7. Who do you idolize?

Apparently if you want to trade in your luxury sports car, these guys would be "happy" to give you a great deal on something more "economical."

I saw this and I started to laugh. I mean, you have to give these guys credit. They're pursuing a niche. But it also convinced me that it's time to publicly address some of rumors that have been flying around.

With media doomsayers spouting predictions of dot-com fallout, both investors and e-business owners are understandably nervous. And here at Internet Marketing Center, we've been fielding a lot of your questions about future of e-commerce.

Everyone wants to know, "What separates dot-coms from dot-bombs?"

It's a good question, but before I answer, I want you to think about something for a moment. Did you know that between 1998 and 2000, online shopping GREW A STAGGERING 580%?

It's true. Forrester Research reported growth from $7.8 billion US in 1998 to $45 billion US in 2000.

Now think about this. Online consumers couldn't care less about dot-coms dropping off Web. MORE AND MORE PEOPLE ARE COMING ONLINE TO SHOP, and number of purchases that they're making each year are continuing to increase.

Those new to e-shopping are making 9 purchases a year and those with more Web experience (5+ years online) are making 20 purchases a year (Forrester Research).

So what's going on? Online spending is growing at fantastic speeds... e-Shopping is becoming a routine part of consumer life... yet all we're hearing about right now is failed dot- coms.

One by one, companies like Furniture.com, Pets.com, MotherNature.com, Toysmart.com, Living.com, Mortgage.com, Garden.com, etc... have closed their doors, and each time pink slips are handed out, media has a feeding frenzy.

Feature stories promising easy wealth and overnight success have now turned into dot-com obituaries. It's enough to make your head spin.

And that's why these statistics I've just shown you are important. Obviously whole story is not being told. If online shopping has increased by a whopping 580% in past 2 years... and if shopping online is becoming a regular part of consumer life... all of this money must be lining someone's pockets. But whose?

That's not as hard to figure out as you might think. First, let's take a critical look at dot-com failures -- "dot-bombs." You can learn a LOT by analyzing common mistakes that were made...

TOP THREE MISTAKES MADE BY DOT-COMS GONE DOT-BOMB:

MISTAKE #1: Tried to be everything to everyone.

Consider Pets.com for a moment. Their target market of Pet owners was HUGE! But so were obstacles they needed to overcome to turn a profit -- "Pets" is a very general market. There are dog owners, cat owners, hamster owners, bird owners, fish owners... I could go on! And each of these groups has different needs when it comes to pet food, pet supplies, pet toys, etc...

Marketing to and meeting needs of all these different groups of people, with all these different products and services, is no small undertaking. I'm not saying it can't be done, I'm just pointing out that it costs money... A lot of money.

And this leads us to next mistake...

MISTAKE #2: Threw millions of dollars of venture capital at an unproven business plan that required years of blood, sweat, and tears to reach profitability.

Creating a nationally recognized brand requires deep pockets and a whole lot of patience... and this means you need investors with really strong stomachs.

When market softened up this past year, many investors became frustrated -- and even panicked -- as dot-coms continued to vacuum up millions of dollars of investment capital without any sign of turning profitable.

Could these companies have succeeded with continued investment? For many, definitely. But when investors withdrew their support, they never got their chance.

So finally, we arrive at...

MISTAKE #3: Invested buckets of cash in unprofitable advertising. The simple truth is, banner advertising just isn't as profitable as it once was. Ads that once pulled 5 to 10 percent click-throughs are now lucky to pull 0.6% to 0.8%. Unfortunately, while this shift was happening, many dot-coms just continued to blindly throw millions of dollars at unproven, often untargeted, advertising that pulled extremely low returns.

Sadly, they might as well have been lighting piles of cash on fire -- at least they would have saved a few pennies heating their office space. But then, hindsight is always 20/20…

LEARN FROM THEIR MISTAKES AND BUILD LASTING, PROFITABLE SUCCESS WITH THE FOLLOWING RULES:

RULE #1: Focus on a well-defined niche market.