OPINION

The Demise of the Dot-Com Death Spiral

There is always the risk of jinxing something just by talking about it — like acknowledging a no-hitter that is still in progress. Then again, why not state the obvious? The dot-com shakeout, once a runaway train hurtling downhill with no apparent salvation in sight, not only has squealed to a stop before crashing in flames, but may be chugging back up another hill.

It’s time to declare the shakeout over. Not just mostly over, but done, finished, the stuff of history books.

It Thinks It Can

There are, no doubt, dot-coms still shutting down all the time. But most of them have names that only a true insider would recognize. And those that die out can no longer blame the incredibly strong downward suction created by the shakeout.

In the darkest days, companies were relegated to the dustbin regardless of their chances to rise and fall on their own, just as they previously were almost universally overvalued.

That’s all done. The clear-cutting is over. Now that investors can see the individual trees as well as the forest — or what’s left of it — companies are no longer being shaken out without cause. They’re failing because they can’t survive on their own merits.

Divide, Conquer

The analysts call it differentiation, but it’s really just a matter of everyone being able to catch their breath and make judgments on a company-by-company basis, rather than throwing out all of the apples just in case a few are bad.

Some dot-coms that were supposed to be gone by now have hung on. Drugstore.com has taken another baby step toward profitability, and it — along with Stamps.com and Autobytel — has seen its stock price climb out of the bargain basement. Dot-coms’ places on the Nasdaq are much more secure now than they were just a few months ago.

But a cessation of senseless shutdowns is not the only sign that the shakeout is a goner. The fact is that dot-com companies can be reborn, albeit in modified form, without generating cackles of laughter from the peanut gallery.

Furniture.com did a soft launch last week, touting its new business model and brick-and-mortar partnerships, but it still represented, at its core, a dot-com that sells furniture online — exactly the sort of thing people said was impossible the first time around.

Time Will Tell

Of course, the new Furniture.com hasn’t proven anything yet; for that matter, neither has the new MotherNature.com or the new LocalBusiness.com. Maybe they will falter even faster now than they did last time.

But at least they’ll have a chance to make a go of it on their own virtues. There are no Super Bowl ads, no free merchandise with which to hook customers — and no automatic stigma for having a “.com” after their names.

There is only a roll-up-the-sleeves attempt to succeed — which is how all this started, although almost no one remembers that.

Sure, the train was out of control for a while on the way up and then on the way down. Everyone knows that all too well. They’ve written a book or two about it, which is another reason to close that chapter on the shakeout and move on.

What’s next? Who knows, but it has to be an improvement.

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


Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.


Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by Keith Regan
More in Cybercrime

E-Commerce Times Channels