Web business currently yields next to nothing for many sites. The Net heads have had to dilute their stake to take care of their expenses so that the show continues.

The two main expense heads that are an area for concern with many Net heads include employee salaries and the advertisement bills. The cost of manpower in IT-related business is always on the higher side. Many a time salaries are paid in the form of stock options. It is not only the techies -- most of the software companies provide stock options only to technical people and not to the office staff--who get a stock option but, everybody in a Net organisation gets it.

There are some cases where entry level people were also given stock options. The biggest advantage in providing stock options is not only to retain the manpower, as is the case in the software industry, but also to reduce the salary bill thereby reducing the cash outflow. Employees, for their part, consider this type of stock option as a mode of savings and readily accept the job offer at a lower salary. In fact, past experience in the US market shows that many loyal employees with stock options have become multi-millionaires when the stocks got listed on the stock exchanges.

Another major expense for a web company is the ad-spend, which is vital to create an image about the website among the investors. In fact, some companies are so desperate for television exposure -- and so short of cash to afford it -- that they are bartering away equity for airtime.

NBC, a popular television channel in the US got a 7 per cent stake in iVillage.com in exchange for promoting the site on TV. CBS, one of the top three television networks, has acquired stake in 13 Net companies this way. Four of these companies are quoted on the bourses. As the Net stocks have been soaring, the value of CBS’s stake in these four has also risen to more than $500 million - far more than the value of its advertisements. Thus, the promoter could control his cash outflow before mobilising funds.