Dot-coms Are All Crap Ideas, Anyway

Chuck0's picture

About seven months ago, an old colleague of mine called me up and asked if I'd consider coming to work with her at some dot-communist operation in Minnesota called I respectfully declined, sensing the blood in the water and already having witnessed how stupid the whole dotcom bubble thing was anyway with my current employer's spinoff of a web company as a thinly-veiled pyramid scheme.

That's what just about every dot-com Initial Public Offering vehicle was-- a pyramid scheme. People were sucked in by greed, accepting promises of stock instead of benefits and real pay. Vulture capitalists offered front money for just about any stupid cockamamie scheme, knowing that if they got it to IPO, they could dump their percentage of equity for a tidy sum just based on the hype. As long as they could fool investors, the pyramid would keep growing, built on the backs of people counting on the value of their labor being returned hundreds-fold based on promises on little pieces of paper.

Then the pyramid collapsed in April. Somebody said, "The emperor has no clothes!" and suddenly the illusion was shattered. Vulture capitalists abandoned schemes in progress, pulling the plug. IPO's were delayed, then cancelled. Funding dried up, never to return.

The dot-com that got spun off from our company was told to spend fast and spend big so it could capture eyeballs and then "monetize" traffic later. Profit? Fuhgedaboudit. The goal was to be the biggest possible flash in the pan so the IPO would be huge, or an aquisition offer would be huge, or any other cash-out opportunity would be huge. Then one day the money was spent, and no more was coming, and all of a sudden "revenue" mattered.

That's what's happening now in the Internet industrial complex. All the paper wealth that supported the financing that pumped money into the market and hired all those webheads and marketeers and warehouse managers and whatever suddenly became just paper, and now the money isn't there to support all the other vultures that fattened themselves on the money borrowed against that paper. But it doesn't matter to the vulture capitalists, because they already made their freaking money on this thing--huge, huge returns on their seed investments, from cashing out at the IPO of their first and second wave of pyramid schemes. Workers are finding new jobs, not really thinking about the fact that the vultures built fortunes on their backs and stole the value of their 90-hour to 120-hour work-weeks in exchange for pieces of paper they could never cash in.

So when somebody whines that these dot-coms going under is costing jobs, remember that they weren't really jobs--they were the most highly-evolved scheme that capitalists have come up with yet to turn the work of skilled laborers into wealth; they didn't even have to make anything.

Sean Gallagher

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