E-Business Commentary

Dec. 21, 2004
E-liminated on April 1.

April 1: e-mail . . . e-commerce . . . Web sites . . . day trading . . . chat rooms . . . up-to-the-minute stock prices . . . online research . . . e-stamps. All e-liminated. After more than a half dozen years of unbelievable growth in use by consumers and businesses alike, the Internet's total collapse today brought mass confusion to the dot.com world. The interactive system of global communications literally crumbled beneath its own weight, experts say -- in effect, a victim of its own out-of-control popularity. There was talk of resurrecting the Internet -- or what was left of it -- in a minimal format for use by only a handful of meteorological researchers and Ph.D.s in computer science at major universities. The news sent the Dow Jones Industrials soaring by more than 3,000 points when the market opened today. As one market watcher put it, the blue-chip index reflected renewed confidence that the economy was "going back to business as usual." Meanwhile, the dot.com-heavy Nasdaq suffered a total wipeout, shedding more than half its value in the first 30 minutes of trading. The impact on American businesses large and small, high-tech and traditional, was both immediate and deep. Hit hardest, of course, were the thousands of Internet companies. Many filed under Chapter 11 this morning, seeking to avoid the cascades of debt and resulting lawsuits that also began to flood federal courts throughout the land. As one New York investment banker estimated, "You're looking at a trillion dollars in unexercised stock options out the window." Some larger Internet retailers, such as Nile.com, were able to continue to function. Nile fell back on its established brick-and-mortar infrastructure to sell books and other products via telephone and fax. Likewise, eOcean, the leading online auction house, immediately transferred its activities to live auctions conducted with telephone call-in or fax-bid features, much to the frustration of its shocked customer base. HomeFood.com resorted to taking orders for groceries over the phone. Even the venerable InteractiveUSA, which had been a pioneer in establishing the Internet as a place where plugged-in citizens communicated, shopped, and plotted their flight schedules, folded its cybertent and was rumored to be holding merger talks with the Postal Service. Thousands of corporations that had spent untold billions for online marketing and cyberadvertising also had to pack it in, shuttering their Web sites. Most executives, though, had mixed feelings about the Internet's demise. One reason for their ambivalence was that many large corporations hadn't done much to embrace e-commerce. The Web sites they put up offered about as much interactivity as the animals in the Smithsonian. "I had a feeling this was just a fad, sort of like the hula hoop," said Bob Thomas, president and CEO of Wicketeer Inc., a manufacturer of croquet wickets in New Wrinklesville, Ky. "The events of the past few days have shown that our strategy of holding back and not jumping head-first into the cyberavalanche was a wise one." "The Internet had its 15 minutes of Warholian celebrity," added Gerald Lumpkin, president of the Worldwide Web Luddite Society, which had predicted the collapse. "Bricks and mortar. Faxes. Snail mail. The good old-fashioned telephone. These are the real tools of business." Not to mention EDI. Thousands of companies that depend on electronic data interchange for handling untold millions of transactions daily were only marginally affected. For them, it was pretty much business as usual. Still, some executives were sorry to see the Internet go the way of the eight-track tape, the adding machine, and the typewriter. "This is really a shame," lamented an executive at an auto parts manufacturer. "I was just getting used to doing performance reviews via e-mail. It was so much easier than dealing with people face-to-face." Even some high-tech companies won't shed many tears at the Internet's funeral. At PCSoft, the giant software firm, chairman Tom Fences said on Friday that the demise of the Internet was "sweet vindication" for him. "I told my people this would never fly, but they didn't listen," he says. Fences was notorious for discounting the importance of the Internet in its early days, while viewing it as a potential competitor to his company's ubiquitous software program, PCSoftDoors. The company began offering to mail Doors users a "patch" so they could erase the firm's Internet browser from their computer screens. E-liminated. Only on April 1.

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