Disillusioned in dotcom land

Click to follow
The Independent Online

We all knew it was coming, but that didn't stop the raised eyebrows and wry smiles when the first cracks started to show. It's almost as if the doomsayers take some perverse pleasure in hitting the mark and being able to squeal "I told you so" to anyone within earshot.

There was an overabundance of this trite glee last week when things started going belly-up for the likes of boo.com, TheStreet.co.uk and JustPeople.com. Not one to rub salt in the wounds, I'll be brief. Investors are bailing out by the truckload after the sudden reawakening that all that is new media is not gold. The much-anticipated crash couldn't have come a moment too soon and, by the look of things, is going to put a stop to all the silliness that has dominated UK new media for the past eight months.

The news that boo.com has stuck up the "for sale" sign is typical of many of the sentiments that are around at the moment: greed, overambition, and stupidity. Boo.com always was a good but fanciful idea that would never work in the current climate. Perhaps if it had launched in a few years, who knows? What's done is done, and boo.com will go down in history as the definitive example of a false start. It can only hope that someone comes in to rescue it.

What will now happen is that more investors get twitchy, realise a return on investment is highly unlikely, abandon the initial public offering and push to sell the businesses before the situation deteriorates. It's the first law of sensible investing. This twitchiness has also permeated startup management teams, people such as Martin Baker (TheStreet.co.uk) and Darrin Moy (JustPeople.com), who realise they're facing an uphill struggle and dot.com envy turns to dotcom disenchantment.

Many venture capitalists are slamming the door on startups, with investors in particular blanking those waving around b2c (business-to-consumer) business plans. The money is now being directed at the latest fad, b2b (business-to-business), and the bookies are already taking bets on how long this one is going to last.

The knock-on effect is that many recent startups will have to tighten their belts (no huge advertising campaigns), and learn to stand on their own two feet. The second or third round of funding that was etched into the business plan is going take some fighting for, and unless they are making money they're going to have to find a way of dealing with debt.

Many will, like CDNow, become acquisition targets, ready to be snapped up by the fat-walleted media groups that want to diversify. It's a shame that it has come to this - the fun being knocked out by greed - but it's all just jigsaw pieces in a slowly forming picture. For some it means a stronger focus and penny-pinching, while for others it means wishful thinking. Compare new media with other industries - the motor car one, for instance - and I think you'll agree that there's still some hope.

As for the faint-hearted defectors, it's worth bearing in mind that new media was never about instant riches; this message just got a little blurred during those heady Initial Public Offering-obsessed days.

Blonde ambition

So Liz Murdoch is dropping hints that she is angling after a bit of the dot.com action. Liz, 31, is leaving the "family business" to set up what is being officially described as a new media, TV and film production company.

At this stage it's not clear whether she has jumped on the 55 (the new expression for going dot.com - because the number 55 bus goes to dotcodotuk valley EC1/EC2, geddit?). In fact, nothing is really clear. Everyone is speculating. Liz, media darling extraordinaire, looks set to become the next big new media icon - à la MarthaLane Fox - because we know how the media loves to get its teeth into blonde new-media women.