Down to Earth: Reassessing the Pie-in-the-Sky Net Growth Projections

Wednesday

Adam Lashinsky on the State of the Internet

Dan Colarusso on Internet Growth Projections

Katherine Hobson on E-tailers' Push for Profitability

Catherine Valenti on Ailing Internet Funds

Jamie Heller on Using the Net to Track Net Stocks

Thursday

Tracy Byrnes on the Frenzy Next Time

George Mannes on Self-Hating Dot-Coms

K.C. Swanson on Old Economy Winners

David Gaffen on Measuring the Internet Economy

Friday

Ian McDonald on 'Butterfly' Companies

Justin Lahart on Real Net Valuations

Joe Bousquin on Building the Perfect Net Company

A Dan Gross Opinion Piece: Were the Old Guys Right?

TSC Roundtable on Predicting Six-Month Winners

Roland Jones on The Last Days of Daytrading

Eric Gillin on Working for a Dot-Com

Three years ago, the potential of the Internet so captured the imagination of U.S. business that it brought with it growth projections that in any other time would have been dismissed as pie-in-the-sky numbers. Today, investors who banked on such projections feel like they've gotten a pie in the face.

The numbers, especially in retrospect, were mind-boggling. In 1998, Jupiter Research told investors Internet retailing would account for $41 billion in annual sales by 2002; investment bank Dain Rauscher Wessels predicted Web-related software sales would climb to more than $1.2 billion in 2000; and last year, Forrester Research said the Internet advertising market would grow $22 billion by 2004.

If only projections were profits; Internet businesses would be humming. But we're not in 2002 yet and even the most optimistic Netgazers have curtailed their growth projections. Further, the heady growth in Internet usage has been accompanied by unprecedented competition and cutthroat pricing, and has necessitated huge advertising and marketing costs that have eroded profit margins. Thus a clear line has been drawn between projections of growth and the realities of running a business on the Net. ...