The Party Was Great -- Before the Cops Came

What "New" Economy? ... Andy Grove, Intel's chairman, loves to say, "In the future, all companies will be Internet companies."  But he also says that there is no "new" economy: "The Internet doesn't change everything.   It doesn't change supply and demand.  It doesn't magically allow you to build businesses by turning investors' money into operating expenses indefinitely.  The money runs out eventually."  Yes, the Internet is very significant -- "like railroads, the telephone, the telegraph, electricity."  But it doesn't alter the fundamentals of business. (Wired, June 2001)

So you gotta smile when you read Fortune's lead article (May 14, 2001) on Mary Meeker, the Morgan Stanley analyst dubbed the Queen of the Bubble who stuck with her Internet picks with an "outperform rating" as they crashed an average of 83%.  What was she thinking?  And what the heck is a "new valuation zone," anyway?  Well, according to one analyst, "It's like some of those parties you went to in college -- man, until the police showed up, it was wonderful." ... For a first-hand account of the madness, go see "startup.com," the new film documentary which tracks the flameout of GovWorks, as it blew through $60 million to help you pay parking tickets online before filing for bankruptcy. 

Sure, in real estate we've had our share of disasters -- like Teleres, CRE-NET  (way back in 1998) and more recently Comro, RealCentric and Zethus, to name just a few.   But these guys look like pikers compared to telecom companies which according to the Wall Street Journal (May 11, 2001), raised $650 billion in debt alone in the past few years.  And the article goes on to point out that 97% of fiber-optic capacity goes unused.   Oh-oh. ... So now it's back to reality.   What makes sense for your firm?  How will you speed adoption of net services?  Send me stories. 

--Peter Pike / ppike@pikenet.com