Forward

In April of 2000, the modern version of "tulip-mania" began on Wall Street. Internet Dot-coms with stratospheric stock prices spiraled earthward like dot-bombs. In a matter of days (or weeks in some cases), hundred dollar stocks were selling for pennies. This was not the result of the much-feared Y2K doomsday scenario predicted for earlier in the year. No, this Darwinian-style shake-out, although predicted by some financial analysts, caught the majority of investors unaware. The markets lost billions of dollars.

Prior to this event, no one could rationally explain why a company like Priceline.com, that owned no airplanes, real estate, or tangible assets of any kind, could have a market cap exceeding that of Delta Airlines. Now however, the dot-coms were being forced to justify their exorbitant market caps and substantiate the high-octane 'new paradigm' propaganda we were being fed. Up to this point, the old ways of valuing a business had supposedly changed. "Bricks and mortar" were no longer important, this was the land of "clicks and mortar" (in many cases, just plain "clicks"). This was the "New Economy". 

New Economy?

Hogwash. The reality of the situation is that there is no "New Economy". There is a new way of doing some things, but the economics of business have not changed. The Internet provides us with a revolutionary new way to communicate with our customers, but it is not unto itself, a revolution in profitability. It is a tool (like a telephone or a Fax machine), and companies still need to abide by the fundamentals of doing business - including, making money. 

In April of 2000, it was announced that the party was over and the Wall Street carnage began. Public Internet companies were expected to show profitable business models, or they were severely punished. The euphoria that accompanied the rise in stock prices was replaced by a mood that became sour on anything Internet. What was the problem?

	Was the hype not to be believed?
	Did businesses no longer need to be online?
	Were we deceived?
	Was the dot-com era dot-over?

As to being deceived, yes we were to a degree, but we were willing to be deceived as long as stock prices continued to increase. (The "greater fool" theory states that we trust there is always someone more foolish than ourselves to buy the stock for which we paid too much). 

Y2K and the return of common sense to the financial markets has proven to be a pivotal moment in the emergence of the "real" Internet superpowers, and small businesses that can distinguish the hype from genuine opportunity. The convergence of technologies and the social and economic forces that originally produced this chaos are not going away. 

The dot.com era is not over, it has just begun

The Internet remains a bona fide phenomenon and will continue to mature. As more people discover its true potential as a medium for enabling interaction, businesses who adapt will realize unimagined success. While the hype-intensive dotcoms were getting hammered on Wall Street, online retailing actually experienced enormous growth during the past few years with sales rising every year. 

What's just as encouraging is that the Internet is forcing us to reinvent ourselves, energize our business strategies and how we manage our business. The purging of these companies that had little more than a novel idea to support their stock prices, is a good thing. 

Now more than ever, we must make the Internet a fundamental part of our business. Accordingly, we would now like to provide some background and make the proper introductions.