Which Breakthroughs Are Revolutionary?
The Internet is no revolution ("The Internet Age," Cover Story, Oct. 4). Instead, it is a useful evolution of existing technology, rather like the fax machine. As a conduit of information, it leaves a lot to be desired. Books and newspapers still have the edge for consumers. Millions of people will never log on, and many will log off because there are better alternatives. But enthusiasm for the Net is creating a massive share-price bubble that will soon cripple the world economy. The simple fact is that 99% of Net companies make no profit.
And even when this performance improves, profits will fall far short of the level needed to justify ludicrous market capitalizations. In the meantime, regular companies will compete by cutting prices, therefore cutting profits and thereby cutting their market caps. This is a classic deflationary downward spiral.
Clearly, the Internet is a false revolution being used by the financial sector to inflate share prices.
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