Year 2000 can be easily summarized. It was a bust. The stock market did poorly in January, which tends to indicate a bad year overall. But it wasn't until April before anyone realized it, and things got worse right to the bitter end.
It wasn't just stock prices that were under attack. So were computers and Microsoft.
The year marked the coming of age for more advanced computer viruses and routine hacker attacks on large sites.
Microsoft was in the news as the company most likely to be investigated. At the beginning of the year Microsoft Chairman Bill Gates hinted that if you hurt Microsoft, the entire economy would suffer. Everyone laughed until it happened. Since then everyone conveniently forgot about his comment. I suspect the old catch phrase "What's good for General Motors is good for the country" can be restated with Microsoft in place of automaker.
The year also saw the end of the annoying dot-com millionaire kids who had thought they were geniuses. In Silicon Valley, the talk is now about how so many of these folks are up to their necks in personal debt, having leveraged their paper fortunes.
It was the year of Napster, if you didn't notice. The music-swapping site introduced the world to copyright theft. And people loved it!
The year also saw its share of false starts for broadband computing services. A lot of people didn't care and those who demanded high-speed access found themselves waiting for service, only then to discover that the service wasn't that reliable. All the while the top companies pushing broadband, namely NorthPoint Communications of San Francisco and Covad Communication of Santa Clara, Calif., had nothing but financial trouble.
Because it has to be installed on an individual basis, broadband was slow to market. A proposed nationwide rollout of an asymmetric digital subscriber line standard called G.lite promised to eliminate that obstacle. This hoped-for standard was supposed to deliver up to 1.5-megabits-per-second with an off-the-shelf digital subscriber line (DSL) modem that you'd buy at CompUSA. It was highly promoted throughout 1999 and by the time 2000 came and went, G.lite turned out to be yet another overhyped technology with flaws. Meanwhile, one of the high-flying DSL companies, Copper Mountain Networks, which banked on G.lite DSL, found itself plummeting from a cool $125 per share, to $4.00 per share. Ooops.
And if you want to ridicule stocks that cratered, you can have a field day with this market. The charts are astonishing. It's like watching a fat kid do a belly flop. Many issues just shot straight into the tank. Take Stamps.com please! From a healthy $59 per share, it's now $2 and change. It has an interesting idea whereby you can print stamps on your local printer: A good idea that nobody seemed to care about. Losing $144 million in nine months on revenue of a paltry $9.9 million makes you shudder.
The year 2000 was also the year of the earnings warning. These warnings began in earnest with Apple Computer in September and continued, hammering the stock prices of any company that issued warning. The stocks didn't just trade down for a few days, they plummeted like nothing we've seen for decades. Apple was trading at $50 one minute, then $25 the next. Worse, most of these companies continued to slide. Apple is now at a miserable $14, down from a 52-week high of $75.
Even more amazing are companies that have deteriorated into pathetic penny stocks. EToys is selling for about 18 cents today, down from a 52-week high of $32. Some of its stock was traded at 3 cents recently. What a disaster. The worst is yet to come, I'm afraid, as eToys announced its slowed growth just in time to make shoppers leery of using the service. Does anyone want to risk buying from a company that is begging for mercy? Bad move.
No tech sector was spared. The most venerable companies were under pressure as dire predictions for a slowing business crept into the public consciousness. For the first time in nearly a decade, the enthusiasm of the PC business waned with talk of a post-PC era. In fact there was no compelling reason to buy newer PCs and people decided to keep their machines a little longer.
While computers were forgotten, the Internet was not, but talk of the new economy began to fizzle by December. The new business magazines were shrinking in size as the dot-com money spent on gratuitous advertising quickly dried up.
All this makes for a fairly depressing Christmas, at least in Silicon Valley. The ripple effect has not spread throughout the entire country, but it will shortly. Retailers feel that this Christmas is going to be seriously below expectations.
So is there any hope for the future? Of course, and next week I'll go into my prediction mode and discuss emerging
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from forbes.com
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