The New Economy: Internet Telecommunications and Electronic Commerce?

Abstract

During the year when this chapter was written, the first phase, or lurch, of the Internet economy had played itself out, with the bursting of the dot.com bubble. Claims, hardly theories, of a ‘New Economy’ driven by a ‘new economics’ or ‘silicon economics’ came thick and fast during this first phase, driven in the popular imagination by the very ‘new media’ that was part and parcel of the phenomenon. It was also promoted for all it was worth by the IT companies and telecom equipment manufacturers who stood to gain the most from the boom. Suddenly the Internet was fashionable, even in the literal sense as IT business people started ‘dressing down’ to more closely resemble their Web-culture counterparts. A whole new vocabulary started up. We learned that Internet start-ups were faced with ‘burn-rate’ problems due to ‘customer acquisition costs’, and that industries no longer ‘transform’, let alone ‘change’, they ‘morph’. Peels of laughter would greet any banker who had the temerity to ask a dot.com startup when the black ink would appear on the balance sheet, an attitude brilliantly captured time and again in the textbook of the Internet, the cartoons of Doonesbury. There really seems to have been little more substance to the decision making processes inside many of these companies than to the characters brought to life by Gary Trudeau.