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A chilly forecast looms for dot-coms

By Stan Gibson

Is the summer of 2000 the winter of discontent for dot-coms? It sure looks that way. The realization is setting in that, in the final analysis, dot-com businesses are no different from any others. They will have to create value and, yes, earn money. Indeed, the wheel is coming full circle, traditional values are back, and those fuddy-duddy click and mortars are looking increasingly like they've got the right stuff.

A recent visit with Mark Teflian, CEO of TimeŘ, the unit of Perot Systems focusing on building e-marketplaces, confirmed that it's smart to start hunkering down for the long haul. And Teflian says click and mortar is looking good in B2B as well as in B2C. "We're seeing B2B as a cooperative model between brick and mortar and the Internet. It's going to take longer than people think. Plan for five years of building real value." One of TimeŘ's star clients,, an Internet metals exchange, has been under continuing development for five years, according to Teflian.

Teflian went further, saying that the true test of the viability of a company's business model is whether the company can exist free of the Web: "If you were to turn the Internet off, would you still have a valuable business?" It's an intriguing thought.

Perot Systems itself is feeling the chill financially. The company issued a second-quarter profit warning, although analysts remained bullish for the long term. Perot does not break out TimeŘ's results separately.

We're going to be hearing a lot about going back to B-school basics in the weeks and months ahead. But there's no platitude that can replace cold, hard cash. And here, it looks like e-businesses with brick-and-mortar backers really do have an edge --provided the parent company chooses to go long with its Internet venture.

Look no further than In the face of drying-up ad dollars --most of them from dot-com companies --the NBC unit is retrenching, but its cash hoard of more than $400 million is such that it's unlikely to be flashing a test pattern on the screen any time soon. Similar difficulties would sink lighter-weight dot-coms.

Meanwhile, vulture capitalists will continue to fly south on the dot-coms, and stock market valuations of the weaker issues will continue to nosedive.

In the end, survival will take on a life of its own, and those that remain alive, by whatever means, will be rewarded with recognized brands. The survivors will be perceived as winners, because they, well, survived.

. . . watch for more stories coming soon  


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