X
Home & Office

A year in review: Dot-com and gone

The world emerged from the threat of the Y2K bug with a sigh of relief and hope for the new year. But just as one IT headline grabber left the stage, another reared its head: the dot-com start-up.
Written by Kate Hanaghan, Contributor

The world emerged from the threat of the Y2K bug with a sigh of relief and hope for the new year. But just as one IT headline grabber left the stage, another reared its head: the dot-com start-up.

These start-up companies - headed by sub thirty-year-old entrepreneurs, full of good ideas made useless by poor execution - have hogged the front page all year. Originally the envy of every traditional company, they have now fallen way out of favour. At first, traditional firms were worried that they were being overtaken by smaller, swifter businesses, and early in the year a number of senior moves to dot-com companies reflected this. Dot-coms made fantastic promises, putting pressure on bricks and mortar companies to launch their own online ventures. Investors believed that those first to gain footholds in the vertical market sectors would be the winners. Fledgling companies looked to the public markets for funding and venture capitalists developed a penchant for dot-com investments with no profits or decent business plans in sight. The emphasis was on growing - as quickly as possible. It all went downhill very quickly. In April, consumer content providers and e-tailers began to fall by the wayside. Investment dried up, IPOs were put on hold. The revenues to fuel the hype were unsustainable, and one by one they dropped like flies. Clickmango.com folded after only three months boo.com also fell but delivered a real surprise, rising from the dead months later. In July, silicon.com reported that forty per cent of US high-tech flotations in 2000 were trading below their opening prices. But amongst all this there is a glimmer of hope - or at least irony. Despite a year of dot-com destruction, consumer spend is up, and more people than ever are online. This Christmas, e-tailers will have to turn in a good performance with both customers and investors breathing down their necks. This could be the make or break season with the pressure on to turn in some real business.
Editorial standards