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Monday, 16 July, 2001, 15:05 GMT 16:05 UK
Anatomy of a backlash 1
Hype's love affair with the internet, and the backlash which followed, are remarkable chapters of our recent history.
In a little over two years, the worlds of media, PR, and corporate finance staged a breathtaking about-turn in their positions.
The mood changed from mild curiosity about online technology, to all-consuming fascination, to disenchantment and eventually outright hostility. Yet all the time, internet usage figures have steadily climbed.
Every day this week we pick a key moment in the shifting sands of opinion.
No. 1: Behold the revolution
She was just 26, and the company she and a friend had set up, Lastminute.com, was just one of the hundreds of ambitious, self-confident start-ups.
Yet that TV appearance heralded a hype frenzy. Her picture appeared in countless newspapers. She was dubbed the nation's best-known businesswoman. And her fortune became a topic of national conversation.
But she used her youth and freedom from party politics to appear modern, fresh, and optimistic.
Her answers were popular - renationalising the railways, for instance - but she avoided sounding cocksure ("Things change so fast that something I believe today could be completely wrong by next week").
After the programme, he recalls, the feeling had been "thank God we got her then".
"She was the right face at the right time. Any later and we would have looked like we were jumping on a bandwagon."
But it was that performance which launched her as a business celebrity, he believes.
That she was attractive, an Oxford graduate, and posh (the Marquess of Anglesey is a great-uncle) help explain why she made so many appearances on the otherwise grey-suited financial pages.
And she used her media exposure not to preach to the converted net users, but to a slightly wary offline majority.
I am no geek, she would say. I know "peanuts" about technology. I am just like you, she would explain to people, and I'm excited about this net thing. Join in and don't worry about your credit card, it'll all be all right.
The day the bubble actually burst in the UK was, it has been argued, the day of the Lastminute flotation itself.
And when flashy fashion shop boo.com went bust in May, amid tales of champagne and Concorde lifestyles, the message was firmly out. Not only was it too late to have your own billion dollar idea for a dot.com, it was also probably too late to make any money from buying into someone else's idea.
Out of the spotlight
But for Martha Lane Fox - who had said repeatedly she wasn't in it for the money - it was time for a batten down the hatches. She had said she wanted a chance to prove her mettle, and the dot.com downturn was it.
More than a year later, her company is still going - more than can be said for many of its contemporaries. But on the only measure of success which will really matter in the long term - can it make any money - the jury is still out.
Looking back on the hype whirlwind, Lane Fox realises its link with the real world of business was somewhat tangential.
"The hype surrounding the flotation just got wildly disconnected with actual consumer interest or need or use of this technology."
Frankly, she said, at the time of the share flotation, Lastminute.com was tiny.
"Now, a year later, we're a much bigger business, much less risky. And yet you wouldn't know that if you either read the press or saw the share price.
"There is a real inverse proportion to how people are viewing the web and actually using it, and how the press are hyping it."
While this was going on, the UK internet audience rose strongly.
In January 1999 there had been 3.2m households online; by December there were 5.1m.
Fickle, fickle, fickle. I was a nerd. I studied Computer Studies before it was trendy (14 years ago). We were shunned by the cool (and scientifically challenged) English Lit./Sociology/Media Studies crowd. The members of that clique then went on to become journalists, hyped the internet and then jumped with glee as the bubble they had created "burst". Who knows/cares what their flavour of the month is going to be next? The internet will carry on unabated with or without the support of the press. Long live the nerds.
The only problem with the internet was that the people with the money expected to much, to soon for to little. How many other industries (not companies) can you name that became profitable in only months?
I imagine the same sort of thing happened with other tech or comms revolutions... Then the next big thing come along, history is forgotten and the whole silly cycle starts up again.
The whole "dot.com" hype was started by ill-informed journalists looking for a sensational and sexy way to write about what must have been a boring subject for them previously. As the mania and madness continued, even those who were more cautious (ie. most of the established IT industry) was forced to take part in the hype.
Tomorrow: Suspicion begins to set in with the "old school net-heads".
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