(March 30) – “A century from now, Internet archaeologists may look back at the last several years and liken them to an electronic Precambrian era: a time when new life exploded in spectacular abundance. But as in that prehistoric era, not all the creatures emerging from the fecund swamps are equally adapted for survival; there are crocodiles and then there are dodo birds,” writes Leslie Kaufman in The New York Times.
“When the Net was still new and all potential (about six months ago), it seemed that practically everyone who had a half-baked idea or worse was starting a dot-com enterprise, raising a truckload of cash, going public and becoming a millionaire. So many prospered so easily because investors, both public and private, were willing to buy into companies with enormous losses on promises of great future returns.
“This could not go on forever, and, in fact, since the new year it has been clear that the venture capitalists and the public markets alike are becoming skeptical of promises of fabulous future earnings and are starting to tighten the capital flow to e-retailers. There is still money flowing, but it is often going to ventures that facilitate commerce among businesses, a rather more stable proposition.
“The pull of real-world gravity has been widely felt. From service providers like Juno to community sites like iVillage, e-businesses have seen their stock prices sink from celestial levels. But the punishment has been particularly brutal to retailers that do business solely on the Internet. Not only do those merchants have to contend with an increasingly crowded field, but they also have to battle clicks-and-mortar retailers like Wal-mart.com and Macys.com, which were slow to enter the Internet game but are now wielding their well-established brand names like clubbed tails.”