Dot-com Bashing

FRAMINGHAM (04/18/2000) - Times are suddenly tough for the dots. A volatile, punishing stock market has cast an unflattering light on some rapidly deflating paper fortunes. Consumer and retail sites are being eulogized and dissected while their little hearts are still pounding. Law firms are staffing up to handle bankruptcies (so nice to know the lawyers won't go hungry).

The same breathless hype that last year heralded the dot-com phenomenon is now predictably, inevitably, turning against the Web sites. When one health site bombs (à la DrKoop.com), they're all about to blow up. When one online grocer fumbles (à la Peapod), the rest suddenly seem to be all thumbs. When one music site hits a bad note (à la CDnow.com), they're all out of tune.

There's nothing like blood in the water to bring analysts and irate investors swimming in for a good feeding. Last week, we ran a story on our site that quoted a Forrester Research report huffing about the "imminent demise" of most dot-com retailers. Other media outlets jumped on it, too, if only for the sheer calculated drama of that quote. That same day, an alert Computerworld reader suggested that publishing such hyperbole without investigating the underlying causes "just alarms people and adds little value." I couldn't argue with that.

The unfortunate truth is that more than 80% of small businesses fail every five years or so, and nobody much notices. That same statistic applies online, but the process is going to be painfully public. It will take place in the klieg lights of the Internet, not on the streets of Everytown, U.S.A.

IT professionals know how e-commerce can brutally expose a company's internal systems problems (just ask eBay or ETrade). But technical problems are fairly easily solved. The harsh reality is that the Web also exposes a bad business idea, smarter competitors, an unrealistic revenue plan or just a fatal lack of focus. The e-commerce sites that will survive - and thrive - will be the ones where technology and business come together to truly serve a need. There are still plenty of those.

So let's take the dot-com bashing with a few grains of salt. It's just history repeating itself.

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