The growth in values for internet businesses has been extraordinary but has the dotcom bubble burst?
Many experts now believe that the dotcom bonanza, massive share prices based on tiny profits, is over.
Lastminute.com is not worth as much now as it was when it launched last week. On launch day, the company was valued at £733 million. Today, it is almost half the original valuation. Martha Lane Fox, co-founder of lastminute.com, acknowledges that not all .com companies will be a success but believes some will be phenomenally successful.
Valuations like lastminute.com make company owners millionaires on paper. However, investors do not always reap the rewards. Internet companies attract investors on the basis that the number of users will massively increase. However, this is not guaranteed.
David Darcy, Editor of Computerscope magazine, believes that having a .com address is not good enough and in order to attract investors online companies will need to go through the same due diligence as offline companies.
Irish internet security firm, Baltimore Technologies, has seen a drop in its share price. However, Baltimore Technologies produces a physical product rather than an internet service. They develop security systems for e-commerce. David Darcy believes that these types of companies will succeed in the future as the growth in e-commerce continues. He says electronic retailers are currently suffering mostly from share price losses.
These share price losses, which run into billions, show how volatile e-commerce and internet stocks can be.
An RTÉ News report broadcast on 22 March 2000. The reporter is Anthony Murnane.
