By Stephen J. Morgan, A Philadelphia area freelance writer and frequent contributor to the magazine
Sure, some Internet companies
are on the ropes, but that's
only normal for a gold-rush
style industry that's changing
the world
Some springtime dispatches from the front lines of the
electronic-commerce wars:
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CDNow.com sees a planned merger with
a mail-order music club fall through and
watches its stock price plunge. Auditors
warn of "substantial doubt" that the e-tailer
can survive. CDNow announces plans to
cut quarterly expenses by $12 million and
seek a partner to throw it a lifeline.
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ValueAmerica, an e-tailer selling goods of
all sorts, cuts both its product offerings
and its workforce as business stagnates.
Its auditors harbor "substantial doubt"
that the company can stay afloat.
-
Shares of EToys plunge from $86 last year
to about $5.50 this spring. The company
blames a host of new online competitors
as well as high costs associated with problems
it had filling Christmas orders.
-
Bertelsmann AG, Europe's biggest media
conglomerate, postpones the initial
public offering of its online bookstore.
The reason: the overall decline in Internet
stock prices.
-
Drkoop.com, a medical information site,
announces steps to conserve $100 million
in cash and warns that its first-quarter loss
will be much higher than initial estimates.
Seeking life-support, Drkoop hires an
investment bank to assess options, including
a possible merger or sale.
-
Plans by Peapod, an online grocer, to raise
$120 million in new financing fall through,
leaving it with about $3 million in cash.
Ahold, a giant Dutch supermarket concern,
steps in to rescue Peapod with $20 million
in revolving credit.
-
Forrester Research, a firm that analyzes
the Internet industry, predicts that most
pure e-tailers will be out of business by
2001. Forrester cites three reasons for its
forecast: weak financial health, increasing
competition and investor flight.
Is Internet commerce, which has generated so much excitement and
investor interest in the last few years, witnessing a wholesale
shift from dot-coms to flop-coms? After reading these dispatches,
should e-business executives sound retreat?
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