Internet Revolution Has Just Begun
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I saw another column elsewhere in cyberspace Wednesday that asked this provocative question: "Is The Internet Revolution Over?"
Without saying so, the author seems to suggest as much, citing as evidence the large number of Internet companies losing money, market capitalization and, possibly, any hope of surviving.
But the market always has expected there to be more losers than winners in the Internet economy. For every eBay (EBAY), there are dozens of other auction sites gathering cobwebs and bleeding money. E-tailers alone face fierce competition and razor-thin margins; there will be many casualties in that sector.
Even companies in the so-called "hot" sectors are not immune from adversity. Shareholders of infrastructure player Ramp Networks (RAMP) got an unpleasant surprise on Oct. 22 when RAMP shares plunged 52% after the company announced a net loss that exceeded analysts' estimates. That same day, Sycamore Networks (SCMR), a provider of optical networking products, made its ticker debut, finishing up 386 percent from its hefty $38 offer price.
At an investment panel at Fall Internet World '99 in New York, Moore said, "The Internet, as a generic category, is still undervalued and will be for years. But the Internet, as individual stocks, is temporarily overvalued and there will be a correction in the near future."
The correction Moore mentions likely will be a series of small corrections instead - the kind we've seen several times since last fall. They will be good for the Internet economy, because they will sort out the pack and bring overvalued stocks back to earth.
And for wise investors, they will represent further opportunities to bet on a technology that is only beginning to transform the global economy. The revolution is far from over.
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