Such is the fire started by the net commerce revolution that even in defeat, the Internet creates business.
As funds dry up, layoffs become second nature, and net businesses desperately scramble to raise capital or find rescuers to buy or merge them, failure voyeur sites such as Deathwatch.com and Dotcomfailures.com have emerged and picked up on losses from their doomed counterparts.
Funded by sponsors and advertisers, these sites offer special features enabling visitors to make predictions, scan company rumors and lists of already failed companies, and browse through domain sales. One such company, F--kedcompany.com, makes a game out of the dot-com deadpool, in which players can earn points for predicting the number of "f--ks" a company will receive. The site also sells its own logo-branded gear.
These companies are not growing only in numbers, but in reputation as well. Ken Cessar, senior analyst at Internet research firm Jupiter Communications Inc., said he now checks the status of a company on F---edcompany.com before turning in his full report on it.
Bid4assets.com, an asset liquidation company, is also cashing in on these losses by helping bankrupt companies auction off their office furniture, computers and domain names to the highest bidder.
"We are going to announce a lot of these over the next few weeks," Chief executive Tom Kohn told MSNBC, "We really believe this is a beginning of a new trend."
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Despite this seemingly vicious game of cat and mouse in which one company's failures amount to another's successes, some entrepreneurs offer commentary in a more positive vein.
In a message posted on Red Herring, entrepreneur genius Bruce Simpson offers emerging companies his key to success by encouraging them to build a vast audience, giving news away for free in return for a small portion of a company's page. He said he feels the wasteful approach to investor assets is the primary cause of failed net companies.
"One of my guiding philosophies," Simpson wrote, "is a dollar saved is worth three dollars earned."
Why the change in attitude? The dot-com hype has made selling a little too easy. The American economy is no longer pushing for an economy based on service, but on ideas.
"If eBay has turned into the world's biggest garage sale, who's to say the same success won't apply to the world of ideas?" said Brian Smith, retail analyst at Gartner Group. As a result of such an optimistic outlook, hundreds of dot-com hopefuls are springing up every day.
The parallel effect is hundreds of dot-com failures in which only the fittest are able to survive.
Valueamerica.com in fact, a Charlottesville based e-tailer of office supplies, software and entertainment products, fell victim to this steady stream of dot-com failures. The company was forced to close its operations and file for Chapter 11 bankruptcy on Aug. 14 this year, laying off 60 percent of its workers.
However, Value America's potential once looked much more promising. Supported by Federal Express founder Frederick Smith and Microsoft co-founder Paul Allen, the company watched its stock price leap to $69 per share in its first day of trading in April 1999. Since then, however, the stock value plummeted, shares closing at only $.72.
"Many young enterprises become a little too hopeful and lose the important specifics about managing a business in the race to market the site," Simpson said, "They forget the fundamental principle in business: making money is what counts."
And yet despite the rash of dying dot-com companies, venture capitalists still seem to be eagerly endorsing new entrepreneurs. It is a malicious repeat cycle that continually results in failures.
Still, the shakeout in the Internet is not all bad, Jonathan Cohen, director of Internet Research at Wit Soundview told ZDNet. "The recent wave of Internet bankruptcies and failures have gotten a lot of press, but in perspective, it's a healthy turn of events that will benefit the industry overall."
As the industry matures, more bankruptcies and failures will ensue.
"But in the end, the successes will far overshadow the failures," Cohen said. "No one remembers the 80 automobile companies that were created in the 1930s -- this is Darwin at work"
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