www.Bust.com

0 Comments | Insight on the News, March 26, 2001 | by John Elvin

Ultimately APB was picked up by a competitor for $500,000, and the president and his plan were shown the door. "Even bankruptcy has provided no awareness of reality to those inside the bubble. My assessment is the dot-commers have lied, and now the truth is making them look foolish," Nesfield says.

Another so-called vulture capitalist, Scott Hyten of Eco Associates LP, based in Austin, Texas, says he gets more than 80 calls a day from distressed dot-coms. Hyten told Local Business, an electronic news service, that he sees many firms where 50 percent of the overhead is for executives. He got involved with one company that had spent $9,000 on masseurs, in addition to sponsoring two auto races and a professional boxer who definitely was not a contender.

Hyten says his mission is to break companies of the habit of losing money, which he says has developed as a result of venture capital pouring in with few strings attached. His methods do not win friends among founders of foundering companies; his unsentimental emphasis on financials interferes with their dreams.

New technology is pouring into the market. The trick will be to combine it with proven business practices based on the adage of survival of the fittest, say these experts. As for the New Economy, some analysts remain optimistic, particularly about the big dot-coms, but many predict "more of the same," referring to the current collapses. And a few add: "Or worse." The researcher can find forecasts to suit any temperament, from glowing to gloomy, but the consensus seems to be that we have not yet weathered the bursting of the dot-com bubble. At best, there is a bad year ahead as sources of fresh capital dry up for those companies running on empty.

"The Internet is here to stay; it's a phenomenal tool," says analyst Schmidt. "It's increasing productivity; many companies are saving millions of dollars while doing more business through use of the Internet." He's talking about old-line companies with real assets, real inventories and real business plans. "The high-fliers that got all of the attention are gone," Schmidt concludes. They went out in the bursting of the $1.75 trillion bubble.