Dot-com Deaths Are Not Over

By Deborah Gage  |  Posted 2001-02-05 Print this article Print

It has become a daily ritual in Silicon Valley to listen for news of the power crisis.

It has become a daily ritual in Silicon Valley to listen for news of the power crisis. Those of us who live here are accustomed to earthquakes, fires and mud slides. But worrying about whether my office is scheduled for a rolling blackout feels worse, because it exposes how complex our society has become and how ill-prepared we are to cope with it.

Consider last months Upside Showcase for startups. High-tech CEOs love to proclaim that the Internet is a utility, but after seeing some of the companies at Upside, I bet well be watching dot-coms crash and burn for some time.

One thing about the Internet is that it routinely makes even very smart people look not so smart. Portions of the roster of companies that showcased themselves last year at Upside now read like a wartime casualty list. Netpulse (workout equipment that surfs the Web) filed for Chapter 7 bankruptcy last week. A source says Netpulse merged with a bloated competitor while mistakenly expecting to earn substantial revenue from Web advertising. Netpliance (voice and data over IP) may be delisted from the Nasdaq, after its shareholders terminated a management buyout. EFrenzy (finding and marketing local services over the Web) renamed itself NextDoor Networks and had its incubator, iXL Ventures, condemned by iXL chairman Bert Ellis, who doesnt think iXL Ventures "will ever create value for our shareholders." I could go on.

So how is this years crop of companies likely to fare in comparison? The CEO of, the MP3 music distributor that repeatedly has been sued by record companies and has never shown a profit, says music should be delivered like "electricity or water." He claimed that is poised to become the next Microsoft and will dominate software development with a new operating system called Music IOS.

The CEO of—an partner whose evolution from a music search engine to a music syndicator reportedly resulted in layoffs last month of 25 percent of its workforce—delivered a brilliant history of the development of recorded music and argued for the dominance of downloadable music. He predicted General Motors will dominate music retailing by embedding music in cars but declined to state Listen.coms business plan because of a lawsuit.

Meanwhile, representatives of Predictive Networks, which tracks Web surfing patterns and delivers personalized content based on those, could not say how the company will handle privacy issues if its policies and its partners policies conflict.

The Internet is a long way from being a seamlessly functioning utility that protects basic rights and offers basic access to everybody. Given the lack of certain infrastructure and the ongoing instability of some companies, how fast and how effectively do you think the public Internet actually will develop?

Senior Writer
Based in Silicon Valley, Debbie was a founding member of Ziff Davis Media's Sm@rt Partner, where she developed investigative projects and wrote a column on start-ups. She has covered the high-tech industry since 1994 and has also worked for Minnesota Public Radio, covering state politics. She has written freelance op-ed pieces on public education for the San Jose Mercury News, and has also won several national awards for her work co-producing a documentary. She has a B.A. from Minnesota State University.


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