The Boston Phoenix December 28, 2000 - January 4, 2001


Reality bursts dot-com bubble

But the Internet is better than ever

by Dan Kennedy

What a difference a year makes. Last December, Time magazine anointed founder Jeff Bezos as its "Person of the Year." In prose bordering on the erotic, the magazine gushed, "Jeff Bezos loves being on the move. He sits in the back of a white van, beaming as usual, surrounded by an entourage of lanky young lieutenants from, the Web's biggest retail store and, someday, if Bezos gets it right, Earth's Biggest Store."

A HEAD OF HIS TIME: a year ago, Jeff Bezos was Time's Person of the Year. Now he's watching his stock prices plummet.

Fast-forward to December 21, 2000, at approximately 9:30 p.m. Amazon's stock had closed at $15.19 per share -- down more than $86 from its 52-week high of $102, a nearly seven-fold drop from the glory days. And there was Bezos on MSNBC, looking slightly punch-drunk, a loopy grin on his face, offering variations on the theme of What happened?

As the media have proclaimed endlessly this year, and especially during the stock-market slide of the past few weeks, 2000 will end as the Year of the Dot-Com Meltdown. E- commerce Web sites have gone down left and right. One of the early pioneers,, may run out of cash and close its doors as early as March. Locally, Internet incubator CMGI's stock has crashed so sickeningly that shareholders are calling for chairman David Wetherell's head.

Media properties, too, have been belted., the once-high-flying, attitude-drenched answer to the Wall Street Journal, has scaled back its ambitions as its stock price has gone down the toilet. Salon, the most ambitious general-interest magazine published on the Web, followed up cutbacks last June with another round last week: it laid off 25 staffers, representing 20 percent of its work force. The move, editor and co-founder David Talbot announced, should bring the webzine to profitability in 2001. Left unspoken was the likelihood that if he falls short of that goal, Salon might shut its doors -- a possibility that sites such as and have been speculating about feverishly in recent weeks. Kurt Andersen's media site,, is hedging its bets with a slick print cousin, Inside magazine. Even Salon's principal competitor, Slate, a fully owned subsidiary of Microsoft and thus protected from the shifting winds of the dot-com economy, may not be safe, since the dropping demand for personal computers has begun to take a toll on Bill Gates's fortune. And every day, projects you've never heard of are preparing for the end. On Saturday, for instance, the Washington Post reported that something called, a Web site for federal and military workers, had laid off 45 people, including 18 of its 20 editorial employees.

Of course, stock-market bubbles come and -- as a generation of previously unscathed twenty- and thirtysomethings is now learning -- go. In retrospect, it's now clear that there were some problems with the notion of endless online riches. For one thing, it never made much sense why an e- commerce site -- even mighty Amazon -- should be vastly more valuable than a good catalogue-and-mail-order operation of the sort that L.L. Bean has been running for decades. For another, online media essentially mimic newspapers and magazines -- a "mature" industry, as they say, defined by declining circulation and a tight advertising market. The current state of technology, which requires users to be chained to a computer and read an eyestrain-inducing screen, makes Internet media in many respects less attractive than print, not more.

But if 2000 was the year we finally grew up about the Internet economy -- and stopped treating dot-com stocks as though every one were a winning lottery ticket -- it doesn't necessarily follow that we have come to terms with what the Internet is all about. Sure, some people will get rich; Jeff Bezos already has, and if Amazon's current $5 billion market capitalization is well below its lofty $35 billion of a year ago, it's still double that of Kmart, the Land of the Blue-Light Special. Cambridge-based Forrester Research projects that the total revenue of e- commerce in the US will rise from $488.7 billion in 2000 to $3.19 trillion in 2004. Besides, the failure of so many Internet companies is no different from what happens in the early phase of any major technological advance, from automobiles to aviation to personal computers. (Booted up a Kaypro lately?)

Fundamentally, however, the Internet isn't about selling things, or about how media companies, old and new, can find yet another outlet for their content. Rather, it is about revolution -- not the kind of business-oriented revolution you see endlessly celebrated in magazines such as Fast Company and the Industry Standard, but the kind of overarching cultural revolution that shakes society to its core.

The Internet revolution is about empowering the individual -- putting more information in people's hands, making it easier for them to form communities, giving them a voice with which to be heard. The dot-com universe may be shrinking, but the Internet itself continues to grow dramatically. According to a study by the US Department of Commerce, the share of American households with Internet access rose from 26 percent in December 1998 to nearly 42 percent in August 2000. Even the much-vaunted Digital Divide is shrinking, with the Commerce study showing that middle-income, rural, black, and Hispanic households were far more likely to be wired than they were before. A generation ago, Gil Scott-Heron proclaimed, "The revolution will not be televised." He was right. It will be webcast instead. And no network executive will be able to do anything about it.

the year in review

art - classical - cultural explosions - dance - film
film culture - fiction - jazz - internet - law - local rock
local punk and metal - nonfiction - queer - pop
protest - theater - tv

Consider the last information revolution of comparable proportions: Gutenberg's invention of the printing press in 1436-'37. To say that Gutenberg didn't get rich would be an understatement: he actually had to get rid of his press in order to pay his debts. But you can draw a straight line between the first printed Bibles that came from Gutenberg's press and Martin Luther's assault on the Catholic Church in the following century.

Then, as now, information equals power equals revolution. Gutenberg's invention led to the Reformation. Given enough time, growth, and further technological breakthroughs, the Internet may someday lead to an upheaval of similar importance.

Take the Internet's biggest technological development of 2000: Napster. Developed by then-Northeastern University student Shawn Fanning in 1999, its software lets anyone with a computer and a broadband connection share music files. went online in late 1999, and by early 2000 it was a phenomenon. On college campuses, so many students were downloading music that some system operators had to block the program lest their networks become overwhelmed.

Napster exists to make copyright violation easy and rewarding. By year's end, the company was fighting to stay alive, as it was being pursued in court by various outraged record companies (although there was also the possibility that Napster could survive by working with the industry and developing a subscription-based model). But whether Napster continues to exist as a business or not, Fanning's programming feat was far more in keeping with the culture of the Internet than anything Jeff Bezos has ever done. That is, he took information that was previously expensive and hard to get and made it free -- and easily accessible -- to anyone. Newer programs already take Fanning's idea one or two steps further. Gnutella allows users to share all kinds of files, not just music; and unlike Napster, it has no central server routing traffic, meaning there's no one to sue except the millions of people who may one day use the program. FreeNet does the same thing, only anonymously, thus providing yet another layer of legal protection.

It doesn't really matter whether you think such developments are good or bad; they just are. And they will revolutionize the realm of information and ideas in ways that we can't even imagine yet. Internet pioneer John Perry Barlow, a former lyricist for the Grateful Dead and the co-founder of the Electronic Frontier Foundation, wrote a piece for Wired several months ago arguing that Napster and its ilk mean nothing less than the end of copyright. "For ideas, fame is fortune," Barlow wrote. "And nothing makes you famous faster than an audience willing to distribute your work for free." I don't share Barlow's enthusiasm over the demise of intellectual property; in the short term and maybe even in the long term, I think it will make it harder for writers, musicians, and artists to make a living. But he's right about one thing: it's going to happen, whether I like it or not.

The Napster phenomenon is merely the most extreme example of that hoary Internet cliché "Information wants to be free." Others abound. The very nature of the Internet encourages many-to-many communication, the building of communities, and the democratizing of information. In such an environment, dedicated amateurs and nonprofit organizations don't just compete equally with their profit-oriented brethren -- they actually have an advantage.

When 2000 began, for instance, for-profit political Web sites were all the rage, with names like,, and and established frontmen such as Carl Bernstein, Mike McCurry, and Dick Morris. None of these new sites succeeded in setting the world on fire. And though the general lack of interest in politics surely had much to do with that, the larger problem is that such projects were misconceived in the first place. As traditional media, they couldn't compete with the Web sites of newspapers such as the New York Times and the Washington Post, or with the offerings of Salon and Slate. More significantly, however, the political sites failed at the grassroots level as well. The reason: dedicated nonprofits such as Project Vote Smart ( and the Center for Responsive Politics ( provide extensive information on elected officials' voting records and money ties.

While Salon downsizes and Slate staffers nervously watch the price of Microsoft stock, small, nonprofit media projects are thriving. Two examples: the left-leaning watchdog Media Channel (, run by former Boston broadcast journalist Danny "The News Dissector" Schechter, and the Narco News Bulletin (, produced on the fly by former Phoenix reporter Al Giordano -- who, unfortunately, is facing legal woes arising from his tough-minded reporting on the failed war on drugs. On an even smaller scale, journalists such as Andrew Sullivan, Mickey Kaus, Joyce Maynard, Malcolm Gladwell, and, well, uh, me all have our own Web sites to promote our work and ourselves.

Innovative as such efforts are, they're also old-fashioned in the sense that they represent top-down communication from a central authority. When the Internet first started to penetrate the public consciousness in the early '90s, the emphasis was on "virtual communities," to use the phrase made famous by author Howard Rheingold -- that is, communities of shared interests that could never have come together if people were limited by geography. A personal example: I'm the webmaster of LPA Online (, the Web site of Little People of America, the country's largest organization for dwarfs and their families. When the younger of our two children, Rebecca, was diagnosed shortly after her 1992 birth with achondroplasia, the most common form of dwarfism, there was no readily accessible place to go for information or community. Today, you can enter the term "dwarfism" in any Internet search engine and you will be directed to LPA Online; and the site's listserv, an interactive discussion group conducted by e- mail, has nearly 1000 members.

There are thousands of examples of such projects on the Internet. Together they add up to an increasingly vibrant and vital medium that isn't the least bit dependent on the NASDAQ or the environment for IPOs or the state of the venture-capital market. Indeed, financial woes notwithstanding, the Internet continues to grow, and has changed the lives of millions of people for the better, giving them more autonomy, providing greater access to information, and making them part of communities at a time when nonvirtual (i.e., real) communities are harder and harder to find.

There is a reason that dictatorial regimes such as China's have imposed tight controls on the Internet. They, perhaps better than we, understand the medium's true potential. The obsession with dot-com wealth (and poverty) says more about American culture than it does about the technological revolution under way.

Some years back, I attended a conference on the future of the Internet at which the mantra was "Every Client a Server." (Yes, they still talked that way back in 1994 and '95.) The simplified translation: every consumer of information can and should be a provider of information as well.

Until now, such thoughts have been obscured by visions of unimaginable riches. Now, amid the rubble, it may be possible to think those thoughts anew.

Dan Kennedy can be reached at dkennedy[a]

Dan Kennedy's work can be accessed from his Web site:

Articles from July 24, 1997 & before can be accessed here