Yes, in the sense that share prices in internet stocks crashed from their highs last week. On Thursday, Morgan Stanley Dean Witter's influential market analyst Barton Biggs predicted that the spectacular rally in internet stocks "will come to a very bad end".
But no, in the sense that the internet will continue to generate spectacular returns for investors who understand the new technology more than superficially. Consider one of Morgan Stanley's own well-spotted internet opportunities. Several years ago, the US investment bank began advising Sita, a Belgian co-operative founded in 1949 to manage the communications links between the world's airports. Last July, much of Sita was floated as a public company. Morgan Stanley Capital Partners obtained 25 per cent of this company for $200m (pounds 125m). Six months on - given that the company's market capitalisation is $16bn - that $200m is worth $4bn.
"Um," conceded a normally rigorously self-disciplined Morgan Stanley executive before clamming up, "we did rather well on that one."
The story of the company, Equant, indeed, offers a counterpoint to the spread of media stories about online bookstore amazon.com and other such new ventures which characterise investors' flagging love affair with the internet.
"The internet is not a business, it's an enabling technology," says Howard Ford, president of Equant Network Services in Europe. But, he adds, what a technology!
A chemical engineer, Ford spent 20 years at IBM, "Watching," as he puts it, "IBM decide it would stick to hardware and leave the software to Bill."
In 1995, he moved to BT, where he ran Cellnet, its mobile phone subsidiary.
"Equant approached me but I wasn't interested," Ford says. "Then I went to the BT unit that monitors its competitors. I asked them about Equant. Their reply was: `Thank heavens someone in an executive position has come to us about Equant. No one's heard of the company. But we consider it to be one of our most dangerous competitors.'"
Ford joined Equant in May 1997. He is based in the UK, but the company's headquarters is in Amsterdam; its chief executive, Didier Delepine, is French. There is a secondary headquarters in Atlanta. At the time the company was preparing not only for its flotation, but also the deregulation of Europe's $290bn telecoms industry.
Since Vodafone bought US rival AirTouch for pounds 37bn last week, the telecoms news has focused on the "wireless" sector. But "new world" versus "old world" remains a key theme. Old-world telecoms companies are those like BT, Cable & Wireless, AT&T, and Deutsche Telekom, which existed when the industry was organised around national monopolies, and telecoms was mainly about voice.
New-world telecoms companies are those like MCI WorldCom, Colt, Energis, and Equant, which were created on the back of the break-up of national monopolies and the surge in computer-to-computer communication over phone lines.
New-world telecoms companies are eating into the business of old-world telecoms companies by relying on cheaper internet protocol equipment. Thus new-world telecoms companies can be characterised as internet companies.
What's more, they are laying high-capacity, long-distance cable and undercutting formerly cartel pricing in the international leased-line business. Second, they are laying cable locally. The "last mile" business, in which telecoms companies link users to the world's increasingly efficient global grid of phone lines, is selectively extremely valuable. Colt, for example, is going after the "last mile" business of banks in Europe's financial centres.
Third, they are building telecoms networks suitable for the world's 3,500 multinational firms and dovetailing these networks with software design operations into something called the "managed data business".
This is the business Equant is going after. Data transmission is the future of telecoms. Soon it will overtake voice in volume. Linking the transmission of data to the business of designing computer software programs for receiving and sending that data is where a big pot of money lies.
The contractual format of the managed data-system business takes many forms. At one end, a telecoms company takes over the telecoms operations of a multinational client lock, stock and barrel. Last year, Equant signed a seven-year contract to do this for the French pharmaceutical giant Rhone- Poulenc. At the other end, Equant is competing to be one of three or four telecoms companies with which the chief information officers of multi- nationals typically do business.
Equant can offer prices about 30 per cent cheaper than many old-world telecoms firms because of its lower cost base. It has a unique selling proposition. Because it is a spin-off of the airline industry, it has tremendous range: a presence in 220 countries, and a 24-hour-a-day help desk for customers in more than 100 languages.
"They are wherever there's an airport," says Colt investor relations chief, John Docherty.
This helps oil companies with far-flung exploration programmes. Shell is a big Equant client. In the old days, results from exploratory drilling took days to develop. Online, it takes hours, if not minutes.
Equant also plays the safety- is-paramount-in-the-airline-industry card. It says the reliability of its system is virtually fail-safe. Interpol is a client.
"Equant's system has never collapsed," said a City analyst.
Equant, of course, faces huge competition, both from old-world telecoms companies and new-world giants like MCI Worldcom. The four- and five- member alliances of old-world telecoms companies look shaky as the former monopolies experiment in an industry jettisoning old-fashioned equip- ment in favour of internet protocol equipment. But the new BT alliance with AT&T, formed last year, looks solid. Still, Equant has the advantage of providing a seamless system globally.
"It's a great alternative for any business that wants to roll out a global network with one partner," says James Richardson, European head of Cisco, the US internet-equipment maker.
Sitting in his office in a countrified business park outside Slough, Ford pooh-poohs MCI Worldcom.
"Basically, they're selling [phone line] capacity," he says.
Last July, however, MCI Worldcom signed a $350m contract to manage the telecoms operation of Florida-based transport company, CSX. MCI WorldCom is developing the electronic trading network of the Nasdaq stock market.
Equant's first figures as a public company - for the half year to 30 June 1998 - show it to be a tiddler compared to BT, with its pounds 3bn-plus in pre-tax profits. The company reported an adjusted net loss of $6.4m on sales of $319.5m.
Still, Equant's shares floated last 21 July for $23, netting the company $768m. Listed on the New York and Paris exchanges, they closed the week at close to $70. On the strength of this performance, Sita - which still owns 50 per cent of the company - and Morgan Stanley plan to make a secondary public offering of Equant shares in the next six weeks, according to sources close to the company.
This would add to the 15 per cent of the shares now held by outsiders. Equant is due to bring its roadshow for the offering to the City. Bursting internet bubble or no, everyone - from fund managers to retail investors who have not heard of the firm - would be wise to listen.