Confusing Week on the E-Commerce Roller Coaster

These are rough days for the psyche of e-commerce. Just when a glimmer of sunlight appears, another dark cloud comes out of nowhere.

In a way, the up-and-down ride might actually be worse than having only bad news all the time. At least when the shakeout was rolling along, tossing a done-for dot-com off the bandwagon each day, we knew what to expect.

Now, there are signs pointing up one day and down the next. Mixed signals are one thing, but this ride is enough to give e-commerce a case of motion sickness.

The Amazon Colossus

The good news last week radiated mainly from Seattle, Washington, home of the suddenly revitalized Amazon.com (Nasdaq: AMZN). At least, Amazon seems to have been revived, though it's all relative.

Amazon's deal to take over operation of the Borders.com site confirmed Amazon's position as the company to turn to when its time to get your Web sales done and done right.

A strong message has been sent to all the brick-and-mortar retailers wondering how to make the Web really work for them. If a direct book-selling competitor can choose to work with Amazon, why not other retailers?

Amazon also put out signals last week that its losses aren't going to be as bad as expected. That not-so-bad earnings news came amid other not-so-down reports in the tech world. So, it looked like a trend. Things were getting better and the future was wide open.

Mixed Messages

Then came Yahoo! (Nasdaq: YHOO). On the downside, the giant portal reported weak earnings and said farewell to every executive who ever worked for the company (or so it seemed). However, at the same time, Yahoo! met lowered expectations and indicated that things may be looking up a quarter or two down the road.

Given the dismally low expectations, Yahoo's news and a couple of decent days on Wall Street -- including one day in which the Nasdaq actually went up while the Dow fell -- the optimistic among us could almost sense an upturn. The bottom was surely behind us. Right?

Then, before the week could end, Yahoo! made news for itself for the wrong reasons, announcing that it was opening a secured, hard-core porn storefront and then saying a few days later that it was not going to after all. By Friday, Yahoo! watchers everywhere were getting dizzy.

Weakest Link

In the middle of the Yahoo! dance, e-mail inboxes around the country got dented by the news that Kozmo (nee Kozmo.com back in '98) was shutting down.

The news was not a complete surprise to close observers, but still an abrupt decision. Hearing that 1,100 people were out of work was a cause for pause.

Furthermore, there was an unfortunate sense that the Koz-no-mo news was out before employees had been told about their fate. For some reason, that's different than knowing that the workers had gotten a head start home, or to Monster.com to update their resumes.

Laugh or Cry?

In short, the up-and-down cycle that e-commerce has been riding is tough on the emotions.

A few months ago, it was almost a bit of sport to wake up and see which dot-com had shut down in the wee hours. Further back, there was comfort in the routine of checking to see how many e-commerce stocks had set new highs on Wall Street or which IPO came roaring out of the gate.

In a way, these uncertain times should be exciting ones. There should be a sense of doom and utter potential at once. Instead, though, there's a strong desire to know which way the signs are pointing. If you figure it out, let me know.

What do you think? Let's talk about it.