WWW dot gone

By Christina Okoli

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MORE and more Internet companies are saving-up, logging-off and shutting down.

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In the year 2000, six of some of the web's biggest movers closed, resulting in a plunge in the value of technology stocks, thousands of job losses and a growing culture of uncertainty in the Internet industry.

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Dozens of Internet companies also fell into the arms of their rivals, fulfilling a long-standing prophecy that the dot com industry is going to consolidate and become smaller, with the big companies, like Yahoo!, MSN, America Online (AOL) and Amazon, swallowing-up 90 per cent of the online revenue.

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In the space of months, dozens of dot coms have gone from boom to bust. Last year saw the demise of big name websites, including Boo.com, Clickmango.com, TheStreet.com, Eve.com, Boxman.com and Priceline.com.

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Analysts are blaming the dot com fallout on three main things:

1. Poorly designed technology: Internet companies, by nature depend on their technological competency and, unfortunately, many websites are balancing on poorly designed systems,�that are just waiting to collapse at the first sign of hard work.
2. Over-spending and unrealistic targets: The dot com industry has been widely criticised for its spend, spend, spend culture. A good look at the balance sheets of most of the collapsed dot coms shows that many Internet companies are still operating on a non-profit-making basis, while falling dismally short of their user and traffic targets.
3. Inflated share prices: Last year, many of the tech companies�that made their debut on the stock markets issued exaggerated share prices; a scenario�that was only worsened by the fact that investors�went ahead and bought those miss-priced shares. Yet, when the dot com fallout entered its early stages the prices of these tech stocks plummeted. Take the successful website Lastminute.com, which debuted on the Financial Times Stock Exchange in March 2000 trading at 380p a share. Lastminute.com was one of the first companies to suffer from the tech fallout, by the end of the year, it had lost 312p on its value and now trades at a more sensible 68p a share.

With all its pitfalls the Internet is still regarded as one of the most open and entrepreneurial markets in history, though it is increasingly being viewed as the most brutal.

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One of the first major websites to hang up its hat was Boo.com, which was rumoured to have grossly over-spent in its early stages, after setting unrealistic user and traffic targets. What followed was a series of cancelled launch dates, with the press and the public becoming impatient and distrusting of Boo.com from the outset. When the site finally launched in 1999 it attracted a fraction of the number of users it had budgeted for, plunging the company into a financial crisis. By May 2000, Boo.com was no more.

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Yet, in the midst of all the gloom, there is an upside.�The�founders of Boo have recently announced plans to relaunch the site. The legacy of Boo.com will live on and forever be remembered as the benchmark of how not to build an Internet empire.

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