The Market Blahs Are Hitting Wall Street's Bottom Lines

As profits fall, smaller online firms could get swallowed up

The news from Goldman Sachs on May 25 was a blow. Nearly all of the company's major revenue streams had slowed steadily since mid-March, according to analysts who then slashed second-quarter profit estimates by as much as 10%. Most troubling: Billions of dollars in investments in recent Internet initial public offerings have declined sharply in value. Goldman's stock plummeted 9% that day, to $73 a share; in total, it has lost nearly half of the $60 billion market value it boasted in March.

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