Loot boss slams QXL IPO

The MD of loot.com has slammed the prospective valuation of rival auction service QXL.com. "I'm very much against hot-air internet stock valuations AND I do not believe that this is the right time for investors to invest in the internet," Graham Tolhurst said. "Businesses, including internet-based businesses, should be founded on sound economic principles, rather than Hollywood-style values where hype is everything. Tolhurst said QXL would need the best of luck for its flotation, planned for next month. " They They haven't made a penny profit since they launched their auction service in the UK several months after us.' He said The Internet will be the dominant medium of the future, but the "winners will be those with profitable, watertight business models rather than those who create new models, and hope they will stick by putting huge marketing spends behind them. "In the world of internet users, money won't buy you love. Customers today are very fickle, so it is still a fact that having customers today does not necessarily mean that a company is profitable. "The relationship building lessons of the late 80s and 90s seem to have been forgotten by most internet businesses which means that promiscuity is all too prevalent, with customers changing brands all too readily. Businesses should experiment by all means, but they shouldn't expect investors to cover the costs. I advise investors to strongly avoid investing in trial-and-error management. "Internet businesses need to be based on strong principles such as customer care and service: give your customers something they will truly value. Even if your service is free, treat them as if they'd paid - a single solid value that loot.com tries to express in everything that it does." Loot.com is the Internet arm of Loot, the UK's biggest free classified advertising paper. The company claims it was the first online auction site in the UK and it has a ABCe certificate confirming site traffic at 9.5 million pages a month. The company also claims it is the UK's number one classified site, which would not be surprising, given its roots. But financial stats are somewhat thin on the ground. ® Related story QXL scales down IPO expectations