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Dateline: 17 April 2000 Early Edition
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Hooray! The Tech Bubble Has Burst
The Nasdaq stock index in the USA took a real beating last week and, on Friday, suffered its worst ever one-day loss which, when added to the previous four days' worth of losses, saw a 25 percent loss for the week.

Damned good news I say!

Maybe now we can get back to establishing the value of tech companies on the basis of their performance and true potential rather than by the slickness of the latest range of fictional publications -- otherwise known as the Internet-venture business plan.

A couple of weeks ago the BBC screened a documentary in which they attended a get-together of venture capitalists and Internet entrepreneurs. Hundreds of millions of dollars worth of business was transacted -- which is no surprise, what was a surprise to me however was the way in which some of those present appeared to be envious that one of the wannabes had already received over 10,000 hits on their website during the past month.

Excuse me? There are venture capitalists stupid enough to invest millions or tens of millions in a company because it's popular enough to get just over 10,000 hits in a month?

Hell, even this site (which for some strange reason has doubled in popularity over the past 3 months) now gets around 80,000-90,000 page views per month (which produces around 500,000 hits or so).

The ability for no-name, no-clue wannabes to soak up masses of venture capital has been the bane of the many others who really do have good ideas -- but who simply lack the contacts or the skills to draw up an enticing business plan. Let's hope that the shock of last week will force venture capitalists to perhaps be a little more selective in just who they decide to back, and let's hope they are prepared to look beyond the fact that the company has "dot com" in its name.

Unfortunately I fear that the tech slump will now produce a "once burnt, twice shy" situation where investors will become wary of even the soundest and most well thought-out propositions.

Of course right now I can hear all the lefty socialists out there saying "see -- it's a good thing that New Zealand didn't waste money getting into this so-called 'new economy.'" To them I would say that even after last weeks disastrous performance, the Nasdaq is still up around 50 percent on the same time last year. How much have our meat, timber and dairy receipts increased by over the same period?

I think we'll also find that despite the fact the NZ market hasn't enjoyed any of the up-side associated with the US tech-boom, we'll still feel the sting of the slump -- which makes us even worse off than if we did have a solid new economy operating here.

It should also be remembered that this slump in new economy stocks mimicks very closely the plight of shares in radio companies and broadcasters back in the 1920s. At that time, stocks of companies such as RCA were hugely over-priced and suffered dramatic losses during the stockmarket crash. However, even today, there are some VERY profitable broadcasting and consumer electronics companies in existence. Likewise there will be some very profitable and high-value Net companies emerging from the present crowd of pretenders.

Are Microsoft Bullying?
A local Net user has reportedly received a somewhat threatening letter from Microsoft Australia in which they allege that he has been engaging in software piracy.

The letter, which was delivered by courier, reportedly asks the recipient to prove that they are not engaged in such activities. The suggestion is that if he can't do this then they will pursue the matter further -- to ultimately bring civil proceedings under the copyright act.

This leaves the superannuiant who received the letter in an awkward situation...

How do you prove "innocence" of such allegations, and should he be forced to waste huge chunks of his modest income on retaining legal advice so as to avoid being squashed by the mighty Microsoft shark-squad?

One must also ask why the letter was couriered from Microsoft Australia and not Microsoft New Zealand?

Could it be that by launching the assault from Australia, Microsoft won't be bound by NZ law that might otherwise force them to disclose the identity of a possible informant?

What ever happened to the 60's man? Where has all the peace and love gone? :-)

0867 Overloads
Some Net users have reported that the 0867 traffic management system kicked in at 8:15 am or so on Saturday morning, making access to Internet services impossible.

Overload at 8:15 am on a Saturday morning?? -- or are Telecom just twisting the knife because they've been forced to continue providing service to i4free?

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