Dotcomfailures.com and F#$&edCompany.com, a pair of
irreverent Web sites devoted to documenting the growing list of dot-com
failures, have both announced plans to pull the plug on operations. Ironic
is the first adjective that springs to mind. But to be fair, both sites did
a pretty crackerjack job at keeping tabs on the Internet boneyard. And,
while the sites served as a brutal reminder of digital Darwinism, both were
a surprisingly accurate reflection of the utter meltdown many spendthrift
Web start-ups were going through.
So it should come as no surprise that the demise of the two Web sites that
started the “kick ’em while they’re down” genre likely serves as an equally
accurate reflection of the improving sentiment for Internet
upstarts. Whatever the reasons given by the respective Webmasters for
either site, the real impetus behind the shutdowns is probably because the
excitement from shoveling dirt on top of dot-com gravesites was starting to
wear thin. Quite frankly, the frenetic pace of high profile failures just
isn’t what it once was during summer, and subsequently, the sites are
starting to lose their sex appeal. And that should spell good news for
bored investors.
No doubt, thousands of struggling companies and investors alike were
completely blindsided by the meltdown in the public markets. But while most
naysayers had predicted a violent bursting of the proverbial Internet
bubble for quite some time, it turned out to resemble the slow, but raucous
leak of a whoopie cushion. The result was an endless stream of parading
dot-com flatulence, with layoffs and bankruptcies, each one more grandiose
and high profile than the last. For the have-nots, it was a time to gloat;
and for the haves, it was a time to privately gloat. For whatever reasons,
the bearish sentiment that blanketed Wall Street and Main Street suffocated
cash-needy start-ups everywhere.
For those paying close attention, there are bullish signs pointing to an
ongoing recovery in the Internet sector, starting with the online
bellwethers. Early indications are, that the worst days are behind us, with
rock-bottom having hit sometime between late July and early August. While
still miles away from their frothiest 52-week highs, many graybeards of the
industry are busy repairing much of the damage that caused their respective
stock prices to plummet since mid-April.
A healthy shakeout was long overdue for nervous investors with a nasty case
of vertigo. But as the storm clouds begin dissipating, VCs will start once
again warming to start-ups, pre-IPO companies will scramble to dust off
those IPO filings, and investors will regain their taste for sexy Net
stocks, albeit, more selectively. What the shakeout did was separate the
pretenders from the contenders, made Internet upstarts more fiscally
responsible, and armchair investors smarter. If you’re an Internet investor
thinking of parking your money on the sidelines, now’s the time you might
want to consider leaving the engine running.
Any questions or comments, love letters or hate mail? As always, feel
free to forward them to kblack@internet.com.
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