BusinessWeek compares the rise and bust of the Internet economy in recent years to other periods in history. It concentrates first on the "Railway Mania" which lasted from 1840 to 1870 in England. And it continues with more comparisons.
It turns out that the similar dynamics of railroads and the Internet aren't simply an odd coincidence. According to Venezuelan economic researcher Carlota Perez, author of the upcoming Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, the same pattern holds for three other tech-driven economic movements as well: the Industrial Revolution of the late 1700s in England, the age of cheap steel and electricity in the late 1800s in the U.S. and Germany, and the automobile and mass-production era starting about 1910. After a gestation period of a decade or more, the new technology usually sparks a boom followed by a sudden bust, leading to widespread doubts.
The article is long and the online version lacks illustrations. If you really want to enjoy this story, read the paper version.
Source: Robert D. Hof, BusinessWeek Magazine, May 13, 2002 Issue
BusinessWeek looks at "profitable" public Internet companies -- and, yes, they exist, it's not an oxymoron anymore.
By our count, 52 Net companies were profitable last quarter, and analysts project that at least four more will clear the bar by yearend. There are two ways of putting the numbers into context. Of the 456 Internet companies that went public since 1994, 11% are profitable. If you look at just the 208 public Net companies that are still in business and were not acquired, a full 25% make money. If you count companies that profit on a pro forma basis -- before noncash charges, that is -- another 30 or so are in the black. The market "has weeded out bad companies very quickly. And the rest have reduced their operating losses dramatically," says Greg Kyle, CEO of market researcher Pegasus Research International, and a longtime bear on Net stocks.
BusinessWeek gave grades to the Net economy's biggest sectors, going from A for travel to F for Consulting. Retail gets a C+ while software is rated as A.
Source: Timothy J. Mullaney, BusinessWeek Magazine, May 13, 2002 Issue
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