Does the Internet devalues your business?

Recently, I've read an article that claims that the Internet devalues everything it touches. I do not fully agree with this claim. I rather phrase it in another way. The Internet helps businesses find an efficient way to conduct their business.

Never before did a medium cause as much disruption as the Internet. The Internet helps to break down many barriers in doing businesses. Some examples include allowing people to:

• relay information efficiently and timely;
• reach a large audience from different parts of the world;
• conduct some types of businesses without a need for a shop front.

As a result, it allows certain businesses to lower their selling price due to the lower startup/operational costs. This is different from devaluation of businesses. In business, a lower selling price does not necessarily translate to lower profits. Do you think Apple's $99 iPhone will translate to lower profits for them? I do not think so.

There will however be problems for those Internet services without a business model in mind. If you start off by offering your services for free without a business model, you're one very brave chap. Many such businesses have failed because no thought has gone into sustainability of business. The worst part is that the stage has been set for the service to be free, thereby restricting innovation due to the inability to generate revenue to sustain the "ecosystem". This even restricts other new entrants from entering that "ecosystem" because the customers are not used to paying for it.

To sum it up, I do not think that the Internet devalues any business. The key point is the way you apply the Internet to your business model.

If more customers can afford the product/service, and the company makes money in the process, why not?