Economy." It’s as though some photograph had been neatly airbrushed to deny that business life suffered any sort of assault at all.
OK, so a lot of the revolutionary rhetoric was over the top, but is it really true that the dot-com forces were crushed? While the conventional wisdom says yes, the truth is that the dot-coms were simply assimilated. The lesson of the crash isn’t that some things work on the Net and some don’t. The lesson is that the line between Net and “un-Net” companies is going to be erased.
For evidence, we may as well start at the top: General Electric, the most valuable (and venerated) company in the world and one whose conglomerate structure would seem as far removed from dot-com thinking as you can get. Though its embrace of the Internet was notoriously belated (it didn’t become a priority until 1999), the firm has now created its own online marketplaces to serve as new intermediaries between GE and its clients and suppliers. These are a variation on the briefly hyped business-to-business markets touted by scores of start-ups (many of which have since vanished), but GE has set them up to serve old clients. Perhaps that’s not as “revolutionary” as the wide open, buyer and seller free-for-alls that the early B2B visionaries touted, but GE is on track to do $20 billion worth of sales and purchases this way in 2001–not the kind of figure you associate with a vanquished technology.
Much of the now widely mocked dot-com “culture” has seeped into the mainstream. True, foosball tables and nose rings no longer have the curious cachet that they attained at the height of the frenzy, when a surprising number of middle-aged executives concluded that the key to a successful IPO was to throw out their tie collections. On the other hand, some of the dot-comers’ most dearly held (and less superficial) notions have taken hold in corporate America. A renewed enthusiasm for individual initiative and entrepreneurialism, even within big companies, is one example. Another is a taste for flatter hierarchies that allow the best ideas to rise quickly rather than crawl up the organizational chart. Similarly, a new level of responsiveness to customers was part of the Internet company ethos (if not always part of the Internet company reality), and that’s been thoroughly digested by all sorts of firms.
Finally, consider the example of the airline business. One of the Internet era’s most widely admired visionaries (not least by himself) was Jay Walker, whose firm Priceline was among the most aggressive in promising a revolution in the businesses it attacked. Starting with plane-ticket sales, Walker planned to eventually sell pretty much everything if all went well. Of course, all did not go well. When the pyramid of shaky Web shares started to tumble, Walker was among those prominently in the way of the fallout. One of his ventures shut down amid a flourish of humiliating publicity, and by one estimate Walker’s net worth has plummeted by $7.5 billion.
But was he all wrong? Maybe in some of the particulars, but certainly not in assuming that airline customers would embrace the Internet. Southwest Airlines, possibly the shrewdest player in a brutal business, now claims to sell an astonishing 30 percent of its tickets via the Web. Yet Southwest’s longtime top dog is not a virtual philosopher-king. He’s Herb Kelleher, a 70-year-old whose anecdotes all turn on whisky and cigarettes, not highfalutin New Economy theory. The point isn’t that the old school beat the new school. The point is that the old-school guy is winning because he’s taken a page from the upstart’s playbook.
That’s what’s been lost in the widespread perception that the revolution is over and the Internet gurus have lost. In recent months we actually seem to have been living through a kind of schadenfreude bubble, in which an absurd amount of energy has gone into heaping scorn on the likes of Jay Walker. But the future of Priceline and the rest of the dot-coms doesn’t really matter. In the long run the dot-com distinction will fall away: the Internet is simply a fact of business life going forward. Nietzsche once argued that we’re all Christians now, whether we know it or not, so deeply had the Christian idea of “conscience” penetrated society. Today, it can be said we’re all dot-comers now, whether we know it or not. All this has happened in ways quite different from what the revolutionaries envisioned, since the old order is still very much standing. But that’s a problem with revolutions: sometimes the revolutionaries lose, even when they win.
