What's turning a profit on the Internet? Dog poo, that's what. Indeed, to everybody else, profitability is a dirty word. Few Internet and almost no electronic commerce companies are making a profit.

Most are spending like mad before Wall Street's seemingly endless money pit hits bottom.

Recently, I was asked by a technology investment magazine to research an article on profitable e commerce companies. I couldn't find any - apart from auction site e-Bay, and a string of niche hopefuls who sold alternative music or sold fine art prints online.

Oh and dogdoo.com - a site where practical jokers, or the just plain nasty, can send a steaming heap of dog dung to an unsuspecting recipient.

Even Yahoo, the Computer Network (CNet) and Excite are not currently profitable. CNet was profitable until it decided to spend $100 million (£96 million) on marketing, and Yahoo and Excite would be profitable but have been spending their dosh gobbling up Internet start-ups.

And e-commerce veteran Amazon.com, is, of course, still spending like there is no tomorrow so that it can own the future.

True, there are some recruitment sites making money, but most are owned by large off-line companies. Then there are a number of computer hardware companies but, again, most are virtual extensions of real world retailers.

In the meantime, buy dog doo. It's on the up and up. Why? Largely because dogdoo.com is not trying to become a dog poo super site.

But among Internet entrepreneurs, the wisdom is that if you're making a profit, then you're doing something wrong. Electronic commerce is about potential rather than revenues. If you've got promise you should be spending money in pursuit of potential rather than making money from it.

If we believe the analysts, there is some justification for this attitude. This year, 196 million people will spend $111 billion (€103 billion) online, and by 2003 spending will increase to $1.3 trillion, according to the research firm, International Data Corporation.

Therefore, say the pundits, traditional business rules are being rewritten.

Then again, perhaps they are just being ignored. I believe that many of this generation of Internet companies will never make money.

They don't understand retail business. In their eagerness to become the number one player, they're spending too much money on acquisitions and marketing and not enough on keeping their customers happy. And in order to be first, they are building shoddy websites which are often slow and sometimes off-line.

This is the equivalent to a department store opening its doors for business before the builders have completed their work. To make matters worse, many Internet sites are overcharging their customers and hiding the charges behind complex financing and shipping charges.

Take the travel sites, for example. I have registered with many of these and each week I get so-called special offers on flights. In every instance the local bucket shop offline was cheaper. And not just by a few dollars. One offer recently from Microsoft's Expedia Web site priced a Virgin Airway's flight from San Francisco to London at $579. I rang local agent Celtic Travel and they offered the same flight for $379.

So despite the massive savings, no overheads etc., many Internet businesses seem incapable of passing on these savings to their customers. So what, may I ask, are they spending all that lovely mula that they get from Wall Street on? And, why am I being asked to pay an extra $200 for a flight?

Another example is electronic banking. I bank with Wells Fargo because it offers electronic banking. But it charges me $8 a month on each account to use the service. Where is the sense in charging me to save it money? Isn't the Internet a more cost effective way of doing business for it?

So whose fault is it? I regret to say that the blame for this state of affairs lies with my colleagues and me. Every day, we tell you how wonderful, how convenient, how cost effective the Internet is. We quote the analysts, the pundits, and the marketing people at length. Unfortunately, many of us do not find the time to actually sit down and try it out for ourselves.

In an effort to try to balance this sorry state of affairs next month, I will buy all my groceries over the Internet and tell you how it works.

Niall McKay is at Irishtimes@niall.org.