Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
      • 2023 winners
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Bioplastics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. Opinion
Opinion
April 03, 2000 02:00 AM

Prepare for the impending Net shakeout

Robert Reed
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Almost everyone is looking for the next sensational Internet play. So, here's one to consider: www.onlineshakeout.com.

    While that's not an actual site (at least it wasn't when I did a search last week, but then, things do change very quickly in cyberspace), the meaning behind this fake Web address is real enough.

    There's the smell of a dot.com shake-up out there. That doesn't mean anyone's sounding a death knell for the Internet, nor will a shake-up necessarily mean an end to the proliferation of dot.com startups.

    But right now, established dot.coms are lighting the shakeout fuse by burning cash faster than sailors on shore leave.

    A recent Barron's article listed 51 Net companies that are likely to run out of money within a year. Among them are some well-known names: merchant Amazon.com, medical service site drkoop.com and locally based flower seller FTD.com.

    The article also predicted that Skokie-based Peapod Inc., an Internet pioneer with great timing and lousy execution, would run out of cash by May.

    Yet, as Barron's notes, Peapod's day of reckoning may come even sooner, since the online grocery delivery company has about $3 million left in the cookie jar and is scrambling for additional capital.

    Peapod isn't the only venture that will have a tough time attracting new investments. So will other older, cash-drained Internet operations ù particularly those without moneyed parent companies to rescue them.

    To remain independent, those Net firms likely will seek to issue more stock or try to float bonds.

    When that sort of thing begins, investors will take a different view. They'll no longer see these ventures as entrepreneurial, but as real companies. And real companies make money ù something most dot-coms aren't doing.

    The Net shakeout could shape up in a couple of ways.

    Undoubtedly, sites that are under threat from well-heeled competitors will feel the pain first. Despite its damn-the-rules roots, the Internet is no longer a free-wheeling marketplace, and Web sites that don't fill a lucrative niche, or those that aim for large audiences and don't draw them, will fade away.

    Marginal sites will have to rethink their business models. Yes, that's been happening all along, but when the money starts drying up, this quest becomes increasingly important.

    Other ailing "new economy" sites will opt for "old economy" strategies: cutting costs, merging with other companies or selling. Already, Amazon has laid off workers, and others are sure to follow suit.

    And if America Online Inc. and Time Warner Inc. can get together, what's stopping a wave of independent Web companies from linking up to broaden their audiences and gain greater efficiencies?

    Selling the whole place is always an option. Maybe the suitor will be one of those stodgy old economy suitors that consistently turns a buck.

    Obviously, if a publicly traded Internet site fails, shareholders will get hurt (except for those insiders who got out while the getting was good). If the company survives a consolidation or shakeout, its

    backers live to tell the tale.

    However the scenarios unfold, the most important point is that an Internet shakeout is not the end of the world ù nor does it signal the demise of the current economic boom.

    Shakeouts happen to the best of industries, and the Web is no exception.

    The true test will be how well Net-related sectors and the entire economy ù lulled by the flood of Internet riches and the proliferation of stock option packages ù handle the correction.

    ___________

    Robert Reed is editor of Crain's Chicago Business. This column first appeared in that publication´s March 27, 2000, issue.

    RECOMMENDED FOR YOU
    Recognizing Plastek Industries for all-around excellence
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Target, Walmart cut from bag drop-off site directory following report
    2
    Plastics industry social media accounts worth following
    3
    PVC, PS resin prices take opposite paths in May
    4
    Resin Prices
    5
    Recycling plant for laminated packaging launches in Mexico
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
          • 2023 winners
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Bioplastics Live
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified