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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (2430)	1/6/2000 4:18:00 AM
From: marcos	Read Replies (1) \| Respond to of 3543

Good point, some do make money. These three i hold do - quote.yahoo.com Pinetree and Bridges.com both quite healthy and building, Jordex while in a transition period has a negative burn rate, G&A less than interest revenue, as long as they don't take a hit in Cdn$ terms because they hold their cash in US$. Two VC/incubators and a B2S [business to schools-g-], all in the black. But that's not what drives them, the earnings. What drives them is the expectation of increased earnings in the future. As the future marches toward us the realisation of that expectation produces cash, but at the same time limits the dream by putting a finite number to the fantasy. Also, stories get old, people get bored with them. An example among those three is bridges.com, with a building revenue flow from school districts all over NA. Great service, well-managed, and they will continue to increase earnings imho, but i think by fulfilling their promise to the extent they have the market views them as having limited potential for growth. They need a new story, a dream without apparent limits. I'm actually out of that one temporarily for that reason, and the cash did not go to outfits with consistently rising earnings, it went to speculations like the other two. The grave's the place to rest, give me the blue sky every time.

To: Dale Baker who wrote (2430)	1/6/2000 8:50:00 AM
From: Zog	Read Replies (1) \| Respond to of 3543

Let me clear up the issue of "no profits." That is a little simplistic. Sure internet companies will make profits, but there will be zero economic profits. That is, they will make enough money to stay in business and make a return on investments. However, they will not make "excessive" profits (i.e., monopoly profits such as Microsoft is accused of making). The internet prevents the development of monopoly power, so competition will drive profits down to the level where it is just profitable to stay in business. Lets also look for a minute at some of your examples (I cannot address each one, since I do not know the details of each). AOL is making money, but look at all the free ISP coming out (I guess CMGI and ATHM announced one today). How can AOL survive with its rich valuation given these free ISPs? Hard to keep any pricing power when your competition is giving it away! From what you wrote about NSOL, it sounds like it is given monopoly rights by the Dept. of Commerce, so I am not surprised they make money. Some of the other examples you cite are more support services (software, consulting), where the barriers to entry are different so the economics may be different. But still, I doubt that excess profits will be made, since there is nothing aside from brand loyalty to keep other firms out.