Dot-com Nation in the After Shock
When we think of business failure, we might imagine a ship sinking. In the vision, many of us are left standing by the shores watching the last mast go under. We may sigh in disbelief or disappointment. But the fact is that no matter what regret, sobriety or even puzzlement we experience amid the after shock, commerce operates along the lines of Darwin's "Survival of the Fittest." Do we really want to exist within a market that is saturated with weak links? It may work for TV game shows, but such a business model does not create legitimate success in either long- or short-term markets. So, in an age when one dot-com company after another is closing-up shop, it pays to mourn less, optimize more.
Using amusing anecdotes to justify market flaws—everything from cheaper rents in Frisco to William Shatner's short-lived singing career—the following are a few reasons that make the fall from dot-com grace a lot more bearable.
Within the publishing industry, many of us knew our share of dot-com gold rushers who experienced the immediate flux of wealth about a year ago. Much like the panhandlers gone West years ago, these were the associates who, for better or worse, got great kudos for creative marketing—of some less-than-necessary Internet products. They had big ideas and even bigger wallets and bravery. Perhaps most of us remember the TV commercials that bombarded networks during sweeps or during major events in which most of the world was tuned? Perhaps we took a lot of pleasure in those Priceline.com larks? But in the after shock, when many of these companies (and our associates) went belly-up, how might we learn from the industry's foibles? Did the wash-out come better late than never? Or, as the old cliche suggests: If it's too good to be true, it probably is.
In contrast, the companies that are still around (such as Amazon.com and other e-tailers offering products in the punch) are exempt from dot-com disaster; they developed direction enough to stay the course rather than crash head-first into the brick wall known as economic reality. In other words, you have to have demand...to have supply...to make money. Even the coolest TV commercial (like the one where unlikely celebrities waltz; Salon.com is suffering mad lay-offs) won't guarantee longevity. Shatner proved as much. So did Microsoft before its East/West Germany-like split.
Spin, I mean, laugh doctors
In a comic sense, seeing the dot-com millionaires scramble has become a new market-watching sport. The wallets shrunk. The suits wrinkled up like the wicked witch's toes. And the indelible market dip taught lessons in excess and demand value. For the publishing industry, advertising has been the single-most affected niche as a result of reversals of fortune. Not funny. Every other day, another company lays-off yet another bundle of employees due to poor ad sales, revenue slumps and professional decompression.
Just last month in print and e-publishing:
-CBSNews.com cut 20 employees.
-CNBC.com promised to lay-off staff after its merger with MSN Money Central.
-Dads Magazine and Parents Magazine subscribers merged.
-Detour Media Group reports it will close.
-Freedom Technology Media Group folded its 18-year-old Home Office Computing.
-H&S Media laid off 15 employees and folded Hot and Pojo's Pokémon magazines.
-iSyndicate sold assets to its competitor, Screaming Media.
-The New York Times cut editorial pages, as did The Seattle Times, The Boston Globe, The San Francisco Chronicle and The San Jose Mercury News.
-Newsday says it will cut 30 to 50 jobs.
-New York Times Digital cut 47 more jobs, that's 116 in total.
-POZ Publishing, publisher of POZ magazine, reduced its staff by one-third.
-Scholastic closed Scholastic Literacy Place, a textbook reading program.
-The Seattle Times is already considering layoffs.
-The Wall Street Journal online cut 35 of 250 jobs.
-Yahoo cut 12 percent of its workforce.
-Yesse! Communications, publisher of weekly newspapers, filed Chapter 11 bankruptcy.
Practice makes perfect
Amateurism also plagued the end of the 1990s. Gone are the days when just about anyone could launch his/her own company, Web site or e-publishing venture without considering the consequences. The consequences being inexperience. The economic retreat has created a less saturated market place in which professionalism currently dominates, but the results have also marked considerably lower interest rates in hopes of jump-starting an otherwise paranoid economy. A market can not whittle it's way back into place without first suffering from the stirrings of unsuccessfulness, in other words—penance.
In the short term, however, the fall from dot-com grace creates a cleaner slate on which to navigate, surf, search and procure. Amid the boom, it got a little confusing when trusty businesses and newly formed conglomerates all had dot-coms behind their names. In the end, many of these companies decided to partner rather than plunder; a few managed to keep heads above water by binding powers into more robust holdings.
Now, it's publishing's turn.
-Natalie Hope McDonald