Greed and cluelessness led to the dot-coms' comeuppance

In the midst of dropping share prices, layoffs, and closings of Internet companies, most Americans attribute dot-com difficulties to over-eager investors looking for quick payoffs and to the poor business plans of dot-com entrepreneurs.

According to a Pew Internet & American Life Project poll conducted in February, 67 per cent of the Americans who have heard about dot-coms's financial troubles subscribe to an "irrational exuberance" view of the cause of dot-coms' troubles, which holds that Internet companies are struggling because investors' desires to turn quick profits led to too many business risks.

A solid majority (56 per cent) of those who have heard about Internet players's problems say that Internet companies lacked clear plans for attaining profitability and that this is a major reason behind their recent financial problems. Some 39 per cent blame the youth and inexperience of some of the Internet companies' executives.

With dot-com layoffs totalling nearly 35,000 workers since December and 66,000 in the past 15 months, most Americans (67 per cent) are aware of the reversal of fortunes of Internet companies. About 57 million Americans, or 30 per cent of all American adults, have followed these developments very closely, with 43 per cent of Internet users deeply engaged with stories of dot-com woes.

Although many people are following dot-com developments, Americans still seem cool-headed about the shakeout's overall impact on the economy and the Internet itself. Only one-quarter (26 per cent) of Americans who have heard about online business troubles think that the dot-com slowdown will have a major impact on the economy.

As for Internet content, 57 per cent of the Americans who have heard about dot-com troubles agree with the proposition that closing down some Web sites is a good thing because the Internet had too many sites with too little to offer. This is twice the number (28 per cent) who believe that the loss of these Web sites is bad because it would lessen the amount of choice available on the Web.

Nonetheless, approximately 31 million Americans say they have been affected directly or indirectly by the dot-com downturn. Some nine per cent of Americans say they know someone who is victim of a dot-com layoff; seven per cent say their family has lost money in a dot-com investment; and eight per cent of Internet users say one of their favourite Web sites has vanished because of the financial trouble at Internet firms.

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