The following text is copyright 2000 by Network World, permission is hearby given for reproduction, as long as attribution is given and this notice is included.

Lamenting the Dot Coms

By Scott Bradner

Dot-coms seem to be dropping like flies and those that have not died yet will soon as they run out of their venture capital money. The popular press seems to be writing off the whole concept and even PBS's News Hour with Jim Lehrer had a segment entitled "Dot-Com Failure" lamenting the fate of the consumer e-commerce revolution. But it seems to me that the lamenting is way premature and many of the failures to date are the result of aggressive daydreaming.

It was not all that long ago that venture capitalists were throwing money at and the trade press was drooling over just about any startup that was going to sell stuff or services to individual customers over the Internet. Wall Street seemed to think that shopping malls were about to close down. That is the only explanation of the relative evaluations that were given to physical and virtual stores.

But in the last few months the same pundits that told everyone to bet the farm on the future of business-to-consumer (B2C) e-commerce are now saying "nevermind."

The fate of some of the startups should have been very easy to predict. It should not have been hard to guess that any company that decided to spend 80% of its capital reserves on Super Bowl ads last January was not long for this world. The same should have been obvious in response to a press release talking about spending a few 10s of millions on a web site to sell some yuppy bobbles. In a potentially related story the auto industry announced the other day that they were spending $75 million on a B2B web site.

Just as it should have been a no-brainer to ignore the wacko projections of success that many of the B2C startups had it should also be a no-brainer to recognize that B2C web sites have a real future - maybe not billions per web site - but a good solid future.

Just take a look at the catalogue sales business. My household gets catalogues from literally hundreds of companies every year. Every one of these companies could put up a cheap order-entry web site and save money over having a human answer the phone. All they need to do is add a page in the catalogue telling the reader the URL. That worked just fine for the specialty spices catalogue we got the other day. They got a web order the next day. (And I'd rather not say how much it was for.)

I see no reason to think that the B2C companies are failing at a rate greater than catalogue companies, they just blow a whole lot more money failing. Once some of the irrational exuberance has faded the many quiet successes will become visible.

disclaimer: I have found that the further you are from Harvard the more irrational the exuberance about the place is but the above spice order was mine.