Why The Net Is NOT Dead

Things are grim financially for dot-coms.

Well…duh.

You can’t try to make millions of dollars out of thin air, although

it’s a pleasantly optimistic thought. What it ends up boiling down to

is that when some people are making money out of thin air, some

people’s money is disappearing into thin air. This has absolutely,

absolutely nothing to do with the viability of the Internet or

high-technology — but more on that in a bit.

I had an interesting set of conversations with some friends lately

where we were attempting to fix the blame for the rollercoaster ride

that has been tech stocks for the last few years: at first I wanted to

blame individual investors. Individualized trading has without a doubt

completely changed the economic landscape…and I think it’s for the

worse. Institutional investors spend their whole careers on the market

and have a solid grasp of the companies involved and their

technologies. They make investments based on careful analyses and

poised thought and they can see through superficial press

releases. Individual investors tend to have day jobs and do a little

trading on the side. Consequently, they don’t have time to acquire a

detailed understanding of the markets they are trading in. This, in

turn, leads them to be subject to believe every last press release,

rumor, and hype around a company or industry. This is NOT healthy for

the market.

BUT, the argument goes further (courtesy of my friends), why are they

investing? Well, because they can, courtesy eTrade, Datek, Ameritrade,

and such kin — and such firms have gone out of their way to tell

people that they can make LOTS of money by investing in the market,

encouraging millions of Americans to begin individual trading. So, to

a significant degree they are at fault.

But, it was pointed out, there is a culprit even beyond them, a

culprit clearly at fault for the whole situation: mass media.

Even at the start, when things were beginning to really explode and

Jupiter and Forrester began releasing their reports on growth full of

hyperbole and optimistic exaggeration, technologists felt a flattered,

but a little uneasy. It was clear from the start where it would all

go: overhype always leads to a perceived crash. It’s what the media

likes. It’s their formula.

Take some X (‘X’ being a person, industry sector, company, or

technology) that is doing reasonably well. Hype up X until you’ve

gotten everyone very excited about it and convinced it’ll

revolutionize the planet; tell people you knew all the time that X was

going to be great. Supporters of X won’t fight against the unmerited

attention – who would do that? Then, after a little pause, begin to

question the popularity of X and its long-term viability. Meticulously

and warily document “the rise and fall of X” — people dislike, but

usually trust, skeptics. Sure enough, X will find it has begun to lose

some favor with investors and partners and can’t really oppose the

decline, since the overhype was never really justified in the first

place. The whole giant perceived rollercoaster of X may have

absolutely nothing at all to do with X’s true viability.

This is, indeed, exactly what we saw happen with the Net. It’s doing

just fine, thank you. Next-generation applications are still be

advanced and deployed. It is, currently, no future hype or hyperbole

needed, really frigging incredible. In fact, I just wrote a little bit about

how Google is now an extension of my brain. This is the here and now.

Internet usage continues to grow – broadband is rapidly penetrating in

Europe, which should really shake things up: due to high billing of

local toll calls (as previously mentioned by many other folks) people

don’t have “always-on” Internet access. Flat-rate broadband is going

frigging tear through the European continent. And did I mention the

fiber-optic utility play that’s going to take everyone by surprise in

the next few years?

The Net is doing just fine, thank you very much. Yes, stocks are

tanking. Yes, dot-coms are getting trashed by the media. Yes, people

(my best friend included) are getting laid off. Yes, the easy money is

gone. Does that have anything to do with the quality of the

technology, the progress of its advance, or even its popularity?

No.

Maybe the giant profits will come later. Maybe the gleaming reporting

will come back. Mabye investors will flock again to dot-coms soon. But

in one sense, I don’t really care. I’m a technologist; I’ll figure out

how to pay rent. Let me and my brethren (and sistren) build and get

out of the way with your silly news articles.

Ladies and gentlemen, the death of the Internet has been greatly

exaggerated.