Jewish World Review May 17, 2000 / 12 Iyar, 5760
Are those lazy, hazy
dot-com days fading?
ALL UPSTANDING AMERICANS are supposed to root for
a strong and vibrant economy, I suppose, but it's
difficult to repress a feeling of glee over growing
predictions that most of the gloating dot-com
entrepreneurs may soon be flushed away.
For a while there, it was difficult to escape the daily
business-page stories about dot-com millionaires
and dot-com billionaires who were either (1) 23
years old, (2) brand-new to the business world, (3)
talking about retirement after only six months of
work, or (4) all of the above.
It made you envious -- there was no getting around
that. The old American work ethic -- toil hard for
years, save your money, invest conservatively, and
when you reach retirement age you may have
accumulated enough to buy a small place in a warm
climate -- was being laughed at. Fledgling hotshots
a day or two out of college came up with a word
(seemingly any word would do), added dot-com to
the end of it, persuaded some big-money backers
to supply limitless financial support . . . and were
worth a billion dollars eight days after they
announced their "idea" to the world. That "idea"
being the hyphenated phrase "dot-com," and not
If you manufactured barbecue prongs, you slogged
along in a gray and dreary workaday funk. If,
however, you founded prong.com, you were a
visionary, you were glamorous, you were wealthy
beyond a potentate's fantasies. (Pardon me if there
really is a prong.com; I made it up, and I refuse to
look on the Internet to see if one actually exists. I
am swearing off dot-com searches.)
All of this sounded much too good to be true, to
the great majority of the people in the working
world who toiled the way they had always been
taught to toil.
And -- within the last month -- there have been
growing indications that, yes, it all is, in fact, too
good to be true.
Did the dot-com game seem too easy?
Evidently it was.
One of the first signs of the coming dot-com
collapse emerged when Forrester Research Inc., a
leading Internet research firm, made a rather
startling pronouncement. Internet research firms, it
long appeared to those of us among the uninitiated,
were the outfits that were always shouting to the
world that if you weren't a dot-com capitalist, then
you would end up living in the gutter, begging for
scraps from the passing dot-com billionaires on the
gold-and-diamond encrusted sidewalks.
But recently, Forrester proclaimed that most of
today's dot-com retailers will be out of business by
2001. "The tide is turning against dot-coms,"
Forrester concluded. Many dot-com merchants
"will collapse before marketing expenditures ramp
up for the next holiday season."
But what about all of those dot-com sites that tell
the world how many millions of "hits" they receive
-- about the throngs of people who can't stay away
from their Web sites?
Many of those dot-com sites are -- to use an
impolite term -- lying. That's the only conclusion
you can draw from a fascinating long article by
Joseph Menn in the Los Angeles Times.
Menn reported that "with no guidelines or
regulations about how Internet traffic is measured,
many Web sites frequently inflate by 50 percent to
100 percent the traffic figures they give to
advertisers, investors and the public, executives
In other words, the dot-com entrepreneurs who
lure investors by saying how many men and women
look at their dot-com sites are jacking up the
numbers -- and the reason they can get away with
it is because no one really knows. It's new territory
-- when someone tells you that 7 million people
visited his Web site last month, how are you going
to prove him wrong? Apparently many high-dollar
investors have been bluffed. They didn't know the
territory, they believed the puffery . . . and they
may be about to find out that the dot-com
promised land that seemed unbelievable with its
easy money actually was just that: unbelievable.
How did this all happen? Take the case of Michael
Adam Fenne, a founder of a California start-up
called Pixelon.com. He raised millions from
investors; he envisioned Pixelon.com as "an on-line
entertainment network broadcasting its own
shows," and last October, at a $12 million Las
Vegas party called "the largest event ever held to
launch an Internet company," treated guests to
performances by Kiss, the Dixie Chicks, Tony
Bennett and the Who. The acts reportedly were
paid in -- of course -- stock options.
Now Michael Fenne is no longer with Pixelon.com.
According to the Associated Press, he turned out
to really be one David Stanley, a convicted
embezzler who, according to authorities in Virginia,
pleaded guilty 11 years ago to 55 counts of bilking
elderly men and women in a fraudulent stock
scheme. He disappeared from Virginia before
repaying all the money he owed his victims, the AP
reported -- and resurfaced with another name in
California's dot-com land.
Where he was a big success, when it all seemed so
easy. Evidently the easy days in dot-com land are
over, or soon will be. Those of you who never quit
playing by the old rules may have known something
JWR contributor Bob Greene is a novelist and columnist. Send your comments to him by clicking here.
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