Book review: <I>dot.con</i> by John Cassidy

 

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By Alun Williams

Posted on 16 Dec 2002 at 15:23

John Cassidy is a British journalist living and working in the US and a former Business Editor of the Sunday Times. In dot.con: the greatest story ever sold he takes us through the emergence of Internet-based companies, the building of the dot-com frenzy and the repercussions of the almost inevitable collapse.

It's a serious work of non-fiction. Amid in-depth financial analysis, the author compares the dot-com boom to speculative bubbles from previous centuries. While not a rip-roaring page-turner, the book provides a brisk, entertaining and authoritative record of the Internet stock boom and bust.

The narrative moves from the early 90s - when VP Al Gore introduced he nebulous term information super highway into the political lexicon - to the epilogue covering the possible financial and technological effects of 11 September. From the early 'land grab' of the Internet to the blood on the floor of collapsing stock prices and washed up day-traders going postal.

In between, we meet the various dot-com luminaries and trace their career trajectories. These include the central figure of Alan Greenspan (the chairman of the Federal Reserve) and the likes of Mary Meeker (an influential stock analyst at Morgan Stanley, responsible for many a 'successful' stock flotation), Jim Clark and Marc Andreessen (Netscape), David Filo and Jerry Yang (Yahoo!), Jeff Bezos (Amazon.com) and Steve Case (AOL).

Strong on economics and the financial issues underpinning the Internet stock boom, the book provides an entertaining read.

What strikes you most is the hard-nosed opportunism of many of the main contenders. These ivy league professionals - you feel - would have succeeded on Wall Street one way or another. The dot-com arena was just the particular environment they had had the opportunity to operate within. Or exploit. 'If Marc Andreessen and Jerry Yang represented the frontiersmen in American history, [Steve] Case represented the merchants and lawyers who followed in the settlers' wake,' writes Cassidy.

The book is good on anecdotes to leaven the financial figures involved. For example, there was the staged meeting at the Equitable Center in Manhattan to announce that AOL was buying Time Warner for $165bn. Reflecting the topsy-turvy times, you may remember that Steve Case - the new Net kid on the block - dressed up in a sober suit for the occasion while Gerald Levin the chairman of the 'old media' Time Warner dressed down to look more hip in casuals. Both sides had flipped, as it were. In more ways than one when you look at the soundness of the deal, in retrospect.

The book is particularly strong on the rise of Steve Case and that epoch-defining deal between AOL and Time Warner.

AOL, already dubbed the 'cockroach of cyberspace', was taking over the world's largest media company. America Online shareholders would own 55 per cent of the merged company. As Cassidy writes: 'In joining with Time Warner, Case exploited the stock market bubble to convert his company from an Internet service provider with uncertain prospects in a future where broadband access to the Internet would eventually become the norm into a global media colossus that could survive and prosper in any environment. At least one old media mogul looked on in admiration. "It was a brilliant piece of financial engineering," Rupert Murdoch commented. "He jumped in and bought something with $6bn in cash flow."'

Based on its stock market capitalisation, AOL was supposedly worth $150bn.