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Last Updated: Monday, 2 February, 2004, 01:53 GMT
Dotcoms bounce back
Firebox.com website
Firebox's hot stuff is lucrative
As investor confidence in hi-tech companies revives, the BBC's Money Programme finds that more of the original dot.coms made it through the stock market crash than was once thought.

Back in 2000, the BBC featured a number of British start-ups in a series called Inside Dot Coms.

On revisiting these companies, the Money Programme found that two-thirds of them are still in business.

In fact, some are now thriving because competitors have closed, and there are more potential customers online.

Student digs

Firebox.com, which sells a variety of electronic goods and toys, was established by two lads straight out of university with 1,000 borrowed from their parents.

Firebox now operates from south London, and has a large warehouse and a call centre.

The business makes annual profits of about 500,000 and is worth about 10m.

Co-founder Michael Smith admits that that makes him a millionaire, on paper at least.

But he says he still travels to work by bus, and he still shares a house with his co-founder Tom Boardman, just as they did at university.

Movie

Another success story, rather different from the image of the typical dot.com entrepreneur, is Sally Robinson, a farmer's wife from Yorkshire who started an online business selling bras.

Amplebosom.com image
A movie might be made about a pigs-to-bras success
Amplebosom.com has been growing year on year and now has a healthy turnover.

Ms Robinson now has a dozen staff, and her husband's pigs have had to make way for a new bra warehouse.

There's even talk of a movie about Ms Robinson's life.

But not all the new businesses featured in the BBC2 series of 2000 made it through the technology crash.

Nicholas Barnard set up Petspark.com, an online pet business, with investment from, among others, an apparently successful American start-up, Pets.com.

But Mr Barnard's American partner became a high profile casualty of the fall in the Nasdaq index dominated by shares in high technology firms - the index lost $3.5 trillion (1.9 trillion) in one year.

Pets.com was the first publicly traded internet company to go out of business, making it an icon of dot.com failure.

The demise of Petspark was quieter but no easier for those involved.

Google

Those companies that have survived the extremes of the last few years are now set to reap significant rewards as global online spending is predicted to more than double over the next two years.

"I think we're in the golden age of technology," says Michael Bourne of Reabourne Investment.

Perhaps the best indicator of a new era for internet businesses would be the widely expected flotation of the search engine Google, possibly later this year.

Having built the kind of brand recognition most companies can only dream of, Google has been able to raise huge revenues via its ad-words system that unobtrusively directs customers to websites they might actually be looking for.

Via ad-words, a company can pay Google for the "rights" to a word, for example shoe.

This means if somebody puts a search into Google that includes the word shoe, the results page will list, on the right of the main search results, links to all the companies that have paid for the word shoe.

The company only pays Google if somebody clicks through onto their website.

True value?

If or when Google goes public, it could be the biggest flotation of the decade, with analysts estimating the company's value at $15bn-20bn.

As the BBC's industry correspondent Rory Cellan Jones says, internet business is "nothing like as exciting as 1999 and 2000 but probably a lot more sustainable".

This time when a dot com is valued at several billion pounds, it may actually be worth it.

The Money Programme on dot.coms will be broadcast on BBC Two on Wednesday 4 February at 7.30 pm.




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