Was It All Some Kind of Dot-Communist Plot?

While pointing fingers for the Net meltdown, let's not forget the bedazzled media -- new and old

By Ciro Scotti

The hand-wringing and finger-pointing over who's to blame for the nuclear dot-bomb explosion on Wall Street is now in full rat-out mode.

The tech geniuses in short pants blame the money-grubbing venture capitalists, who now have been revealed for what they were all along: bean-counters. (Note to the next wave of entrepreneurial young bloods: Visionaries don't wear Armani.)

The VCs blame an unforgiving market. Investors large and small blame analysts, who are now leaning heavily on a history of cover-your-ass comments to make the case that risk was inherent all along. Never mind that their crystal ball didn't work.


  I hate to quote the competition at The Wall Street Journal, but how about this gem in a smart, recent story written by Rebecca Buckman entitled, "Who Caused the Dot-Com Crash?". Analyst Henry Blodget of Merrill Lynch tells Buckman that "he has always warned that risky Web stocks are not meant for investors whose goal is 'capital preservation.'" (Well, from all of us investors whose goal is "capital deprivation," thanks a lot, Mr. Blodget.)

Ms. Buckman's story, which, to be fair, came on the heels of a New York Times piece about Blodget, also quotes Marc Andreessen of LoudCloud as blaming day traders for turning the Nasdaq into a financial gasbag waiting for a pin prick. And one down-in-the-dumps online loser even had the audacity to point a finger at the media.

The media? No, no, never the media. Not the electronic media that owed its very existence to the dot-com bubble. Not the TV financial media whose breathy, collagen-lipped correspondents might as well have been XFL cheerleaders egging on the online excesses. And certainly, no guilt can be associated with the mainstream business media that saw in the dot-com mirage an opportunity to sell ads by the bushel.


  But the truth is that like everyone else touched by the dot-com frenzy, the media wanted its piece of the action. Such was the thrill of the ride that seasoned editors took leave of their senses. Parallel worlds of business and business journalism emerged. Hard-nosed corporate types bought into the e-bulljive, rushed to put up a Web site, or barrel into B2B, and traded their Paul Stuart suits for Dockers and cable-knit sweaters. And experienced journalists allowed smart-aleck tech writers to trumpet outrageous assumptions and predictions without holding their feet to the fire of skepticism.

So the rigors of analysis were swept aside and some of the most revered names in journalism -- along with a whole pack of new titles -- became part of the dot-com hype machine. Yes, we didn't always do our jobs. Yes, a lot of people lost a lot of money. And yes, we allowed hard-won reputations to be sullied by brash young reporters as wrongheaded as the dot-punks they covered.

Let's not beat ourselves up too badly, though. The wave was a monster, and the media -- human as it is -- couldn't resist riding it, too. But now it's over. It's time to put those worthless dot-com stock certificates in a trunk with our "business casual" attire, knot up a tie, and get back to work in the real world. Oh yeah, and maybe send some of those tech writers to cover the school board.

Scotti, who favors Paul Stuart over Armani suits, is senior editor for government and sports business for BusinessWeek. His A Not-So-Neutral Corner column appears regularly on BW Online

Edited by Douglas Harbrecht

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