The Real New Economy

As journalists, were card-carrying skeptics. so when theres a new bit of conventional wisdom in the land, we instinctively want to investigate. Right now, the lemmings are legion when it comes to e-business. The new economy was an illusion, were told; there is no worthwhile business involving the Internet; and promises of profits from IT investments are not to be believed.

Its too bad that the splatter caused by the explosion of the dot-com bubble has blinded so many to reality. In this light, some facts seem particularly interesting. eBay, once scorned by some as little more than a Web-ified yard sale, continues to return a healthy profit and earlier this month spent some of its earnings to buy PayPal. With the addition of PayPal, eBay will be able to give its customers a more satisfying experience and could even vault itself into the position of "tollbooth" of the information superhighway—a role that many erstwhile dot-com juggernauts dreamed about in vain.

Then theres Yahoo, whose stock price is down from speculative highs but which has broken into the black. And lets not forget the privately held Google, whose name is becoming identified with "search" in the way that Kleenex describes "tissue" and Coke describes "cola."

There are some other facts that are much better hidden from the public. Wal-Mart, for example, has defined supply chain standards for all its partners, hastening efficiencies not only for itself but for all retailers and even those in other industries.

Its subtle productivity improvements such as these that must play a part in what Federal Reserve Chairman Alan Greenspan is calling one of the mildest recessions on record. Were it not for IT, we would not be living in 2002 but instead would be reliving 1932.

We dont expect these e-business successes will be enough to satisfy those who, as Greenspan might put it, are easily infected by greed. But the people who insisted that we all believe that e-business would obsolete the need for business value got us into Alices Wonderland of an economy in the first place.

Business value? Profit? Yeah, e-business has got that. There is plenty of good news from the real "new" economy.