There is renewed optimism about the potential of the Internet and digital technologies. My prediction: its a good time to invest in innovative technology, but for the Telecoms and Media companies investors haven’t yet faced up to the fact that they are companies that are based on business models stemming from the world of fixed circuit phone calls and analog media. This is gone forever.
“most dotcoms have failed, and the telecommunications industry, which raced to build the infrastructure for cyberspace, is staggering under $1 trillion of debt. Yet it would be wrong to conclude that this is the end of the internet revolution. Boom and bust often follow the introduction of radically new technologies. In the 1870s America’s railroad industry boomed in much the same way as the world’s telecoms industry in the late 1990s, only to collapse in a similar heap of bankruptcies, accounting scandals, stockmarket losses and enormous debts. America’s economy fell into recession.
A few years later, a reviving economy together with advances in railway engineering triggered a new wave of investment. Railroads quickly revived, changing American business forever.”