Dot-Com Shake-Out - The Aftermath

For some companies, however, the dot-com bust was an ironic twist on the market euphoria that preceded it. That is, where in the late 1990s a simple—dot-com—appended to a company name could send valuations sky high, in the early 2000s that same company could be grossly undervalued for the same reason. According to Business Week, hidden among the New Economy rubble at the end of 2000 were doubtless a number of dot-coms unfairly neglected by the market; such firms would eventually arise out of the shakeout with a durable business plan and thinner competition for cash, in the process reaping ground-floor investors enormous rewards. Thus, the dot-com shakeout produced, alongside its layoffs and shattered fortunes, a number of bargains.

The shakeout didn't mean, however, that consumers and businesses gave up on the idea of buying and selling online. Rather, the shakeout was the natural process of any new growth industry, which inevitably undergoes consolidation as consumers and investors learn to distinguish the wheat from the chaff. Where the e-commerce shakeout proved so dramatic was in the tremendous hype many of the failed dot-coms had received, the enormous sums of money that were made and lost in just a few years, and the short-lived notion that e-commerce wasn't bound to the traditional laws of economics or business sense. But the shakeout did little to dissuade companies from conducting business online, nor consumers from shopping in cyberspace. As companies increasingly integrate their online storefronts into their bricks-and-mortar operations, creating a seamless and complementary whole, and as more and more individuals attain Internet access, the number of e-customers is only expected to grow.