As recent events show, despite all the hype which has surrounded dotcoms, traditional bricks and mortar companies are still the foundation to profitable e-business success
As I write, Nasdaq is falling. By the time you read this it may have bounced back again, as day-trading shareholders follow the advice of glossy magazines to "buy on the dip".
But the general direction is down. Reality is setting in for dotcom share prices after a series of disappointments: Lastminute.com's flotation debacle, the Internet access giveaway that halved the market value of Freeserve, and then the Microsoft court verdict.
However, one incident will probably turn out to be the defining moment of this phase of the e-business revolution: the initial public offering of Dutch ISPWorld Online. Founder Nina Brink cashed in most of her investment before the initial public offering on 17 March, which flopped. She resigned last week.
Before e-hype captured the popular imagination, the general consensus was that the only people to make money from the Internet would be the people selling the hardware.
That view gave way to the belief that Internet pioneers had discovered a new business model that would transform everything. The problem is, 18 months into the dotcom revolution, nobody knows what it is.
Last August, Computer Weekly put together a list of 10 business models for making money on the Web: these ranged from advertising, paid-for content, services, auctions, business-to-business exchanges, ASPs and portals. Since then, investors have become serially obsessed with each of these for a short while, only to lose interest and move on to another.
One of the types we listed stands out however - the "e-hustler". John Murphy in Computer Weekly 19 August 1999 wrote: "You form a company and create a Web site. You give it a dotcom name and talk excitedly to whoever will listen about how this is the future. You swap banner ads with your friends who also have Web sites and then count these as sales at full card rate to create turnover. After a couple of years you have lost a fortune, provided to you by US venture capitalists. You prepare a prospectus for an initial public offering on Nasdaq in which you confess the whole thing is basically a fraud and that the company has almost no chance of ever making money for its investors. You hype the offering, knowing that no-one has actually read the prospectus, then sell as many shares as you can quietly so nobody gets the jitters. When the market re-adjusts you are long gone and your investments are all in General Electric, Coca Cola and DuPont."
Clearly some people just can't understand irony when they see it.
But what does all this mean for real e-businesses? Consultancy Rubus - formerly Nvision - predicted last week that 70% of all UK dotcom startups will fail within two years.
Based on an analysis of 120 business plans, CEO Michael Walton concluded that there is "too much dumb money being thrown at dumb ideas".
Rubus outlines four laws for e-business success:
That's as near as I've heard an e-business consultant come to admitting that the e-future is really about transforming established businesses.
The winners will be those who use Internet technology to strip out cost and boost productivity. They will be traditional businesses with recognisable business models. General Electric - cited in August as one of the blue chip safe havens for e-hustler shares - just posted 24% year-on-year revenue growth for the first quarter of 2000. Its online SME services operation - called www.gesmallbusiness.com - sells loans, vehicles and technology to small businesses, taking advantage of GE's position as a huge conglomerate. In the six weeks since its launch it has achieved qualified orders annualised at $4.2bn.
Clearly, that's a business model worth looking at.