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The Internet Books Media Book Reviews

Dot.Con 119

Posted by timothy from the mister-nice-guy-ceases-to-be dept.
markwelch writes: "Late last year, I read a truly awful book: Stephan Paternot's A Very Public Offering, a poorly-written account of the rise and fall of TheGlobe.com. The company has consistently been cited by critics as one of the worst/best examples of absurd internet-stock mania, but this book by the company's founder offered no real apologies, and provided very little insight. I don't blame Paternot, a young man who was willingly manipulated by market-makers, and who clearly is not a professional writer." Marc is less forgiving of writer John Cassidy, whose recent book Dot.Con he dissects below -- read on as he completes the thought.
Dot.Con: The Greatest Story Ever Sold
author John Cassidy
pages 384
publisher HarperCollins
rating 4
reviewer markwelch
ISBN 0060008806
summary A disappointing, meandering examination of the boom-and-bust world of Internet commerce which doesn't even deliver on the promise of its title by naming names.

But John Cassidy can make no such excuses for Dot.Con: The Greatest Story Ever Sold. Cassidy offers no insight, and even fails to identify the "con" promised by the book's title. And his sloppy writing, riddled with factual and typographical errors, ensures that the book can't be accepted even as a "digest" of the events he reports.

A much better and more insightful book in this category is Michael Lewis' Next: The Future Just Happened An earlier example of a competent "industry chronicle" is Fire in the Valley: The Making of The Personal Computer, by Paul Freiberger and Michael Swaine. For a fascinating account of the "experience" of a dot-com bubble company, read dot.bomb,by J. David Kuo, or watch the movie Startup.com.

The book's eight-page prologue was mildly promising, and led me to expect a chonological report of the rise and fall of the "internet industry." I've never read any of Mr. Cassidy's articles, but the book jacket assures that he is "one of the country's leading business journalists" and "has been a staff writer at the New Yorker for six years." My expectations were low: I expected a competent journalist's account of the stock market's dot-com bubble. I was disappointed.

First, the book is riddled with mistakes: obvious typographical errors, embarassing spelling and grammatical mistakes, confusing shifts in time, and bizarre factual errors.Clearly, this book somehow avoided the common year-long delay to publication (Cassidy discusses the impact of the September 11, 2001 terrorist attacks, in a book that reached bookstores during the first week of February 2002). Apparently, time was saved by skipping all proofreading, editing, or fact-checking.

Cassidy's first chapter attempts an impossible yet necessary task: recounting the entire histories of computing, the internet, and the "World Wide Web" in just 16 pages. As I read this section, I was uncomfortable, because too much of what Cassidy wrote seemed incorrect. Then, I was jarredby a glaring mistake: Cassidy wrote that the Altair computer, released in 1975,was named "after a character in Star Wars." (Like most Americans, I saw Star Wars during its first year-long run in theaters in 1977, and I recall no character named "Altair." I do recall references to Altair as a star and solar system in the Star Trek TV series.) Perhaps my training as a journalist and editor make me "more aware" of the book's many spelling and grammaticalerrors,but finding such an obvious factual error on the fifth page of the first chapter made me quite anxious about the reliability of the rest of the book.

A few pages later, Cassidy writes: "In 1978, two Chicago students, Randy Seuss and Ward Christensen, invented the modem...." As a long-time computer geek, I knew this was another mistake: programmers Seuss and Christensen didn't invent the modem (which is a piece of computer hardware). In 1977, Christensen wrote Xmodem, the first computer program used to transfer files between computers equipped with modems; a year later, he teamed with Seuss tocreate the first "bulletin board system" software.

After seeing such obvious mistakes in the book's opening pages, I knew that Dot.Con would not be a reliable account of anything, but I read the book with the hope of gaining some insight into the stock market's dot-com bubble.

Second, the book's chronology keeps shifting: Dot.Con shifts between several modes. Some chapters appear to relate a chronological sequenceof events. Other chapters focus on particularcompanies (Netscape, AOL, Amazon.com).Other chapters focus on broad themes. Unfortunately, even the most "chronological" chapters don't maintain a clear chronology, often including facts and events from earlier or later years.

Often, Cassidy's "factual time-shifting" seems designed to make key events or statementslook even more foolish. But usually, it simply confuses and distracts from the real absurdity.

Finally,the book offers no new insight:Nearly everything I read in Dot.Con, I had read somewhere else before. Indeed, the book's many footnotescredit nearly all of the book's contenttomainstream news articles and other books. The main theme of the book is that the spectacular rise and fall of internet or dot-com companies in the stockmarket was a classic "speculative bubble," no different from earlier absurd bubbles. Buthundreds of critics had been saying that since the mid-1990's (and Cassidy cites many skilled analysts and brokers whose careers were ruined by their refusal to join in the feeding frenzy).

After I finished Dot.Con, I sought to identify a single fact or insight that seemed original to Cassidy, or even some fact or insight that hadn't already been recounted many times before.

I can recall only one notion that I don't recall reading elsewhere:the impact of Adam Smith's concept of"perfect competition" in an age when the internet reduces barriers to entry and removes friction from transactions. Cassidy writes: "In perfect competition, all goods sell at cost, and profits are zero." This insight helps us understand the folly of the recurring theme that because the internet is so big, it's inevitable that internet companies which holda "first mover advantage" or which capture millions of "eyeballs" will somehow earn huge profits from their vast audiences. But Cassidy doesn't seem very committed to this theory.

I expected that a book called "Dot.Con" would name names: who were the con artists, and what were the confidence schemes? Who was really to blame? Cassidy seems to waver, and I'm not sure if he intends to suggest that the dot-com crash was Alan Greenspan's fault, or whether it was the fault of brokerage-firm analysts and of journalists -- he seems to partially blame yet partially acquit each. Or perhaps it was really all just an inevitable "herd mentality" speculative bubble that was really nobody's fault.

Certainly, Cassidy does an able job of reporting that the absurd valuation of internet companies was a major aberration for the analysts and investment bankers. He often repeats that the quest for fees and profits led many investment banks to seek ever-more-absurd valuation strategies, in order to float IPOs for companies with no history of profit or even revenue. Over and over, he recounts the absurd financial figures for companies valued at billions of dollars despite short histories that promise only greater losses and virtually no prospect of profitability. He finds lots of targets for ridicule, but they are all easy targets, and the stories have been reported many times before.

Cassidy never digs below the surface, and he mostly views the rise and fall of dot-com stocks as a single cycle, one giant wave that lifted and then sank. He mostly ignores the flow of different "sub-industries" that may explain why the "bubble" continued for so long with several surges.

He ignores the impact of "buzzword investing" as venture capitalists and investors sought to stay one step ahead. (The buzzwords include: "Internet Service Providers", "e-retailing" or "business-to-consumer," "portals," "business-to-business," "Application Service Providers," and "internet infrastructure," each of which can be viewed as a separate "wave" -- or perhaps as "more hot air" that delayed the collapse of the "bubble.")

Maybe it's too soon for anyone to write a definitive account of "the Internet Mania." And maybe John Cassidy did not want to assign blame, but instead to maintain the role of an impartial reporter of the various events, and the various theories. Whatever he intended, he did a poor job. I don't recommend Dot.Con.

You really can purchase Dot.Con at Fatbrain. If you'd like to praise (or skewer) a book here yourself, it's easy. Just read our book review guidelines, then submit your own review with Slashdot's web interface.
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Dot.Con

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  • maybe he didn't... (Score:2, Redundant)

    by Em Emalb ( 452530 )
    actually put his insight into use?

    Remember, barely a year ago any schmoe with a half-baked idea and a little business savvy could get VC. Well, looks like he didn't learn from the .con eh?

    If the shoe fits....
    • People like this killed the market. The sad part is that this joker still doesnt get it. So many people got the opportunity to do something great, and what did they do, they screwed everyone.

      How many tech workers are still on unemployment right now?? How many people bought cars, homes, gadgets, etc thinking that their jobs were safe??

      And now these failures have the audacity to publish books in a sad attempt to make some more money. At the very least, this joker could have said, "Hey, we had no idea what we were doing, we had no business running a business, we are sorry." or perhaps, "Hey I had millions by screwing people over." Atleast then it would be honest.

      Yikes, perhaps theres too much idealism there...

      Maybe next time around it will be better... hold it wait... Enron... alright, maybe the next time after that... ;)
  • The name alone should have been a dead giveaway. How much did this book set you back? I think reveiws should include the price.
    • Why is it so difficult for you to click on the fatbrain link at the bottom of the article?
    • The name alone should have been a dead giveaway.

      Ugh. I absolutely cannot stand the use of a period between "dot" and "com" (or, in this case, "con"). Even an idiot can see that that makes it "dot dot com".

      Yeah, as another poster pointed out, the con here is in actually convincing people to look at such a book.

      On the bright side, since publishing a book is apparently so easy, I ought to write a revised edition of the Decline and Fall of the Roman Empire, constructed entirely from memory. I expect it to be a bestseller.

    • The title even describes the author ... er ... in French.

      (you can lookup the translation here [notam02.no])

  • they read like romance books (Score:3, Funny)

    by lemonhed ( 412041 ) on Wednesday February 13, 2002 @11:22AM (#3000046) Journal
    These dot-bomb books are turning into Sweet Valley High series books. I read the first one, but they are all the same.

    Maybe the VC will not have an IPO exit strategy but instead use the book signing as their exit strategy!

    I can see it now.... Dot Bomb Vol. XIX, Amazon's rise and fall

  • It takes a lot of guts to put out a book with such a stupid name.
  • ...if the book is truly pathetic? Not having read the book (and, based on the review, not particularly desiring to), I can't vouch for the review's accuracy. However, it seems reasonable to me that if a book is glaringly erroneous that one would not actually promote its sale by publishing a link for it. Did I miss something?
    • Why do you assume that a link to the book is a promotion? How can you assume that after the roasting the book got in the review, somehow providing a link clears all that away and marks the book as "A-OK #1 Buy!" ?

      You're confusing information with promotion. The standard format for book reviews on /. to the best of my knowledge has always to include a link for purchase. Why shouldn't it?

    • Re:Why tell us where to buy it... (Score:5, Insightful)

      by JamesOfTheDesert ( 188356 ) on Wednesday February 13, 2002 @11:38AM (#3000142) Journal
      Did I miss something?

      Yes, you did. See, this is a review, not a dictatorial decree, and both the review and the link are provided so that the reader may decide on his or her own whether or not to buy the book.

      Observe: you read the review, and even though a link was provided, you were not compelled to buy the book. Amazing. Just like free will.

    • It is about impartiality. Yes, this reviewer thought this book was crap. But that is not necessarily the view of Slashdot/OSDN/etc, so it is proper for them to link to it.


      Also, it would be easy for someone to submit a review like this that was completely off-base and have it slip past the editors. Think of it as a form of reviewer's reviewing process.


      Finally, I was thinking about going out and getting this book, not because of the "high quality writing" but because if something that wrong made it through the publisihing monster, it will make a great example to show people what *not* to do.

    • Did I miss something?

      Haven't you ever seen a bad movie review for a movie that you enjoyed? One critic's opinion shouldn't stop you from checking something out for yourself.
    • How about so if you want to you can form your own opinion.... ?
  • So this book sucked, and thhat looks like the selling point. Every body said it sucked so people bought it just to find out how bad it sucked. IF you lost your pda/laptop/gold chains and teeth crowns cause you dawt com bombed wouldnt you write a book to?
    • >Every body said it sucked so people bought it >just to find out how bad it sucked

      What are you talking about? The whole point of the review is for Slashdot readers to hear an opinion of the book. Now that I have read this review, I will not buy the book. Honestly, I was thinking about it but this swayed me.

      So you see, reviews dont always make someone want to buy it. If I told you that my dinner was so disgusting, but that you should try it... would you? I think not.

  • A disappointing, meandering examination of the boom-and-bust world of Internet commerce which doesn't even deliver on the promise of its title by naming names.

    So the book is like the .com's. Doesn't deliver on it promise.

  • The reviewer has missed the point... the book itself IS the con and the con-tent he's reviewed is just filler.

  • I have it! (Score:2, Funny)

    by Wind_Walker ( 83965 )
    Cassidy offers no insight, and even fails to identify the "con" promised by the book's title

    The "con" was getting you to buy this terrible book and make him millions of dollars, all without doing any sort of research outside of scouring a few news sites!

    To quote Dark Helmet from Spaceballs: "Fooled you!"

  • I mean, it's at the very least an advertising tracker, and more likely part of an affiliate program... I wonder why exactly people would send their book review in to Slashdot, only to have it be used to feed people through a link (well, maybe not with this review) to put money in VA's pocket. Honestly, I wouldn't mind it so much if the affiliate link wasn't there, or even if the money went to the review's author. Slashdot.com, indeed!
    • Shit, I get so sick of all you people whining that slashdot has some commercial ties. So what if there is a link to a store where you can buy the book that was just reviewed, be it good or bad. That is called BUSINESS. You know, costs - revenue = profit?? Well, slashdot costs, and you have to build revenue or there is no profit, and hence, no slashdot. Quit yer bitchin'
      • oops, make that revenue-costs=profit. damn, I get hot-headed sometimes.

      • Cost for this review? $0

        Opportunity to pay the guy for doing some actual work, as opposed to adding a brief comment and clicking 'accept'? Missed

        And people wonder why we rarely get good reviews from people other than site editors.
      • The ORG TLD is not appropriate to a site which is intended to generate profit for a publicly held company, yes? I've maintained an ORG domain for some time and I'd like to see that namespace true to it's roots and it's charter. Unfortunately we've been invaded by corporations in Sheep's clothing. The notion of For Profit Corporations invading ORG space by using the /. community as a subtle inroad is a Bad Thing. It's like your neighbours turning their garage into an afterhours nightclub. First they invite the neighbours over for a few drinks and some party fun. Then more and more "strangers" show up over time. One day you notice that you're living next door to a commercial establishment and there goes the neighbourhood. Even if you can go over and drink BEER for FREE. Of course, that doesn't mean anyone gives a rats @$$, but some of us do. Some more seriously and quietly than others. And don't get me wrong, /. is my home page. I love it. I just don't make believe it's what it's not. When I see commercial links I remember that we're the guests of a publicly held corporation which would like us to buy something. That's the world as we know it, Marxism and Capitalism meet in Open Source. :)

        • generate profit


          profit is the key word here. Remember, one shows a profit when ones revenue exceeds ones expenses. The simple act of generating revenue doesn't sully an organization that purports (either explicitly as in non-profits or implicitly by having an ORG TLD) to be not for profit. Organizations have expenses and generating revenues to help cover those expenses. I don't think this type of activity detracts from the original intent of the ORG TLD. Hell, just look at that banner ad at the top of the page.
        • I agree 100% on the .org issue. However, the bar analogy is a little off. A commercial site in a .org domain doesn't affect my day to day life. Nor does having a commercial .org lessen the value of other .orgs. I personally would prefer to see these TLDs enforced for the simplicity that goes along with good organization. If you type .org, it should be an organization, not a corporation. However, what happens when a small, hobby site (slashdot), builds up tens of thousands of loyal readers, and becomes a commercial venture? By switching to slashdot.com, they may lose some brand recognition. Sure, you could simply redirect, but most people would still call it slashdot.org, they would still type slashdot.org, and the fact that it simply redirect to a .com would be irrelevant. I don't claim to have any answers, but these are sticky issues that go along with stricter enforcement
        • The notion that dot-org means "non-profit" was abandoned several years ago, though it continues to be honored by the majority. Back when Slashdot.org was sold for a bunch of money to Andover.net (see http://news.com.com/2100-1001-227793.html [com.com]), I was surprised that anyone would take the heat for acquiring a business that "appeared" to be a non-profit. Slashdot.org is now owned by OSDN.com (which is owned by VA Software Corporation). It is NOT a non-profit company, and doesn't pretend to be a non-profit company.
  • It's good to see a book slashed to pieces every now and then.

    it's not enough to know which books to read, but also which ones to avoid.

    Also: walk away from any book with a substring "made easy" in the title. For dutch readers I recommend you stay away from any book written by Leen Ammeraal.
    • walk away from any book with a substring "made easy" in the title
      Granted, I'm too lazy to have actually finished it, but I've found Calculus Made Easy to be a very good book.

  • Isn't the editor obvious? (Score:4, Funny)

    by Dodger_ ( 51556 ) on Wednesday February 13, 2002 @11:50AM (#3000214) Homepage
    [inside cover of book]

    Dot.Con
    by Stephan Paternot

    Editors: CmdrTaco and Roblimo

  • greetings (Score:5, Interesting)

    by tofupup ( 14959 ) on Wednesday February 13, 2002 @11:52AM (#3000218)
    i was one of the first 10 employees got and fired during the first expansion of the company. i had a strong feeling that the company should have focused on technology - i was told i was "not all there" - and they were there to make money.

    you see, they (todd & steph) got a big jumpstart by perfecting chatting over the week and i felt that the only way the could keep up the momentum was to stick with being on the bleeding edge. i was pushing them to do some (oddly enough) p2p stuff; yes this is back in 1996 and i was a big distributed system crackhead (still am). it is interesting to look back because in a way we were both right

    1. (they had the short term vision)it was a feeding frenzy and there was money to be made

    2. (i was considering the long term vision)you can aways push products if you have the technology - you just have to get business and tech to work together to hash new products.

    from my perspective with so much capital very little was done with in terms of what they brought to the great dinner table of computing. yet is it hard to keep a level head when anyone is in that position.

    as for me i am happy part of academia and don't plan on leaving anytime soon - think this is where i belong.

    as an aside - i really think tech people/business need to slow down a bit and ask themselves if computers were taken away tomorrow would you be doing the same things? for example theglobe did online communities - would theglobe be working to build communities in the real world if they lost computers tomorrow? if the answer is not they you have to ask yourself how in tune (mentally and spirtually) you are with the fundamental problem you are seeking to solve.

    keeping it organic tofu 2k
  • Why are everybody so dead set on beating down a dead horse? Last year, this time, it was all about the new economy, how everything was supposed to be a service, profit didn't matter, old companies were on their way out. And don't tell me it was just CNN-Money that gave that line. Remember a certain gun-toting 'leader', some VA stocks, and a lot of chest beating?

    Just glad I never worked for those companies.
  • If I wanted incorrect facts, innuendo, typos and the real dirt on the DOT CONs, I'll go to www.f---edcompany.com [f---edcompany.com] and save my $$$.
    • mod parent up!

      P.S., I love it when an FC thread gets taken over by the employees of a company and they start using it as their rumor board. You can't buy better gossip than that.

  • PBS Special (Score:4, Informative)

    by passion ( 84900 ) on Wednesday February 13, 2002 @11:55AM (#3000238)

    There was a rather fascinating program on PBS a few weeks ago entitled "Dot Con". The thesis of the program alleges that investment analysts had an awful lot to gain by offering "hot buy" advice on stocks that their employers had vested interest in.

    Ultimately, this led to consumers/investment speculators getting screwed, and unripe companies being shipped off to IPO land for quick cash.

    This site has much more detail, including interviews, stats, etc. - including the program itself on quicktime:

    http://www.pbs.org/wgbh/pages/frontline/shows/dotc on/ [pbs.org]

    • Re:PBS Special (Score:3, Informative)

      by craw ( 6958 )
      I also saw the PBS special (Frontline, IIRC). One of the central themes was that banks/underwriters (e.g., Credit Suisse First Boston) of the some IPO's manipulated the market to their benefit. CSFB recently settled with the SEC over this; for instance, you can read this article [thestreet.com]. To quote:

      Specifically, the commission said, CSFB allocated shares of IPOs to more than 100 customers who, in return, funneled between 33% and 65% of their IPO profits to CSFB. The customers typically sold the stock on the day of the offering, often collecting big profits. The customers then transferred a share of their gains to CSFB by way of excessively high brokerage commissions.

      Of course, one of those IPO's was LNUX.

    • I also saw that Frontline. One of the most damning things in the piece was the indictment of the incestuous nature of IPO allocation. VCs feed hot IPOs to investment bankers in exchange for a chance to buy into other hot IPOs offered by those bankers at the initial offering price--a price normal investors never get to pay.

      I thought Bill Hambrecht's point that a huge "first day pop" is a disservice to the company was an excellent one. If a stock goes public at $30 a share and goes up to $175 a share on the first day, then the company misses out on $145 per share. That's extra capital that the company could have raised.

      Hambrecht's solution is to use the old Dutch auction, which allocates stock to those who are willing to pay the most for it. That way, if the market values a stock at $75 a share, that's what the company will raise at the IPO. Unfortunately, Hambrecht has had one helluva tough time convincing VCs and boards to go with his Dutch auctions.

      • Yeah, everyone was thinking a huge "first day pop" was a good thing, but really it was bad for the company with the IPO. At the very least, they could have issued far less stock to raise the same amount of money.

        I guess the top management of those companies bought into it because it made them paper millionares (or even billionares). That's very seductive. Sabotaging the long-term for short-term gain... now where have I heard that before?

        Frontline is usually a good show, and "Dot Con" was excellent, IMHO.

    • So the problem with the .com bubble and the Enron/Arthur Anderson scandal were essentially the same then: lack of ethics and incestuous business relationships.

      That gives me a really black feeling in my gut.

  • Ah, the irony. (Score:2, Flamebait)

    by Mr_Icon ( 124425 )

    First, the book is riddled with mistakes : obvious typographical errors, embarassing spelling and grammatical mistakes, confusing shifts in time, and bizarre factual errors.

    Wow, and the book is being berated for that on SLASHDOT of all places! Oh, the irony!

  • He got "perfect competition" wrong, too (Score:1, Interesting)

    by Anonymous Coward
    Cassidy must have flunked his Econ 101 classes, too. Classical economics posited a long-run equilibrium, where profits are driven down to a stable level. In this environment, profits are not zero (my God, how could an economy survive where everything is sold at cost?), but are as low as possible due to competition.

    Like the labor theory of value, this is one of those assumptions of classical economics that didn't bear out in the long term. There are many reasons for this, but the most critical advance in profit theory came from Schumpeter and his theory of "creative destruction."

    -Baka!
  • So, is the title supposed to be pronounced "dot dot con", or just "dot con?" If the former, it should have been titled ".Con". If the latter, well, that's just stupid.

    Whatever the book is about, it's old news folks. Hell, most of us were in the middle of the "dot cons". Either this book is too little too late, or it doesn't apply to us. Kind of like commentary after a sporting event. Please.

    --SC

    • So a post-mortem analysis on what happened, and why it happened, has no merit? As the old and incredibly wise saying goes, those who fail to learn from history are doomed to repeat it.

      I don't vouch for this book whatsoever (haven't read it), but learning from the .COM bubble is extraordinarily valuable, both from a "herd mentality" investing example, and from a "rich get richer" perspective (i.e. a lot of banks and big investors made and kept an incredible amount of money when every average Joe rushed in to free them of those stocks at ridiculously inflated prices, all the while being urged on by "analysts" paraded as impartial while being employed by a company that depends upon boisterous IPOs). The whole system is grossly flawed.

      There was a very good PBS special [pbs.org] on a couple of weeks ago, and it was very enlightening (at least for me). Of course it, too, was called dot.con, much to the consternation of many on here (I think the slamming of the name is a little ridiculous. It isn't a literal domain name so semantics on whether or not it's redundant are absurd, but putting .CON makes it a tad difficult to find in the card catalog).

      • I absolutely agree that "a post-mortem analysis" is warranted, and should be written by someone who can write accurately. The awesome number of factual errors make this book dangerous as history, and while some of the author's analysis is interesting, none of it is original and he really doesn't actually commit to any conclusion. When a football game is over, they recount the highlights and name the MVP and the goat, and they suggest how some plays could have been done differently; Cassidy fails to name any MVPs or goats, and he doesn't offer any insight as to how things might have been done differently (though he does explain why the irrational bubble may have simply been inevitable).

        (And yes, the title "Dot.Con" makes it hard to search for, especially searching on a system like slashdot which doesn't index the three-letter words.)

    • So, is the title supposed to be pronounced "dot dot con", or just "dot con?" If the former, it should have been titled ".Con". If the latter, well, that's just stupid.
      You have "latter" and "former" mixed up. Either way, your right about one thing: titles with .anything in them are passé by now.

  • Wrong - this is a very good book. Read it. (Score:5, Interesting)

    by dipfan ( 192591 ) on Wednesday February 13, 2002 @12:24PM (#3000438) Homepage
    That was not so much a book review as one long sour grapes session ... in truth this is a very well written book that deserves to be read by a wide audience.

    John Cassidy is The New Yorkers' business writer, and I've been reading his weekly column there for some time. He's an insightful writer with a good turn of phrase and an eye for strong themes. And that's what Dot.con is about: why did the US economy get transfixed by a speculative bubble involving the internet? That's the question he's exploring, and it's a complex issue, so readers shouldn't be disappointed (unlike whoever wrote the Slashdot review) if he doesn't come up with black and white answers. It's not that simple, and only a moron would expect it to be. However, Cassidy is pretty plain who he blames for letting the whole circus get out of hand: Alan Greenspan, the media, and the investment banking community. But he has the insight to explain why each of those groups did what they felt they had to do.

    It's true there a few typos (mistakes) in the book, and I have no idea who invented the modem and it doesn't matter. From what I can see the guts of the book is accurate, and any (minor) mistakes don't detract from its strength. What Cassidy has done is write an excellent narrative of the financial markets and the internet from 1995 to 2001. As a history of its type it can be compared to JK Galbraith's The Great Crash - and it's no coincidence that Galbraith has been a big fan of the book, supplying a glowing endorsement.

    Nothing new in here? Well, it's a history of the very recent past, so lots of the events are very familiar to most readers, but Cassidy's ability to tie it all together makes this better than so many cut-and-paste jobs. And its aimed at the good old general public - the type of people who might have been tempted to buy some Priceline shares because their brother-in-law made big money on the IPO.

    Slashdot readers can still enjoy it though, even if it is too general for them: the hubris, the schadenfreude, makes it very enjoyable. Cassidy paces the book so well, almost like a good novelist, that the book has a racy plot. And he focuses in on some key parts of the bubble as it expanded: the chapter on Amazon is particularly good. It doesn't bear any resemblence to Michael Lewis's book: that was written at the top of the "the internet's going to change everything, man" phase, which (as Cassidy points out) turned out to be hyperbole at the very least.

    Don't trust whoever wrote Slashdot's review: this book actually stands a good chance of being the standard history of the dotcom boom-and-bust. It's the book that, years from now, when someone asks you, "why did everyone go so crazy about the whole dotcom thing?", you can pull out this book and say: "it's all in here...."

    • Uh, dude, if the author cannot get the facts straight on how the Altair was named and who invented the modem, then how am I to trust the rest of the book. Hell, the above can be checked in a manner of minutes (seconds?) using Google. I've got major problems with an author that cannot get his facts straight. The subject is to fresh not to get them correct. And yes, it does matter who invented the modem!

      I've used timothy's reviews before and have come to trust them. I've bought several books based on his reviews and steered clear of a few as well.

      • Uh, dude, I have to say that knowing there are two minor errors in the book (I spotted the Altair one but not the modem one, if that is an error rather than an over-simplification) doesn't detract from the rest of it. Yes, I know what you mean, but Cassidy's overall argument isn't harmed by either, because they are trivial points in relation and I wouldn't get too hung up about them - at least not as much as the reviewer. Shakespeare puts a clock in Julius Caesar, a huge anachronism, but it doesn't detract from the quality of the play. (Not a great example, but I hope you see the point.) I guess Cassidy's publishers will correct them (and the typos) in the second edition/paperback.

        I'd be more worried if the financial stuff was wrong. As it happens, I read an interview with Jeff Bezos last Saturday, where he mentioned that Amazon's share price hit an intra-day high of $115. I was reading Dot.con at the time and the Amazon chapter mentioned a $113 high for the company. So I checked - and Bezos was wrong, it was $113.

        Generally this book has been well reviewed. Anyone who wants to read a balanced review should try this thoughtful Financial Times one:

        http://globalarchive.ft.com/globalarchive/articl e. html?id=020128001274

        • "knowing there are two minor errors in the book . . . doesn't detract from the rest of it"

          That could be true, but in fact I only cited those first two major mistakes, in the first section of the first chapter, as examples that should cause anyone to lose confidence. In hindsight, perhaps I should have cited a few other factual errors from his writing about dot-com companies specifically.

          I found MANY more factual errors (major and minor) throughout the book, and I didn't even pay a lot of attention to many factual details (after the first section of the first chapter) since I had already concluded the book was unreliable as a source of historical facts.

          But I don't think anyone would benefit from a complete catalog in a review (why kick a dead horse?).

          Finally, to kick the horse some more, I think that attributing the invention of the modem (a hardware device) to two software programmers (Christensen and Seuss, whose contribution (creating the XModem file-transfer protocol and the first BBS software) is actually greater), is a serious factual mistake, not an "over-simplification." Sorry, but

          • So, you found two errors in the introduction, in a section that was wholy unrelated to the main subject, and concluded that the entire book was untrustworthy? On that basis, you "didn't even pay a lot of attention to many factual details", as you had already made up your mind by the first few pages. I'm sorry, but that doesn't add to your credibility as a critic.

            Maybe the book wasn't what you had expected, and yes, the title is silly and misrepresentative. It sounds like one of many out there that tries to discuss, in layman's terms, what happened and how. That is going to involve going over the same ground as everyone else. If the author doesn't have anything new to say, then that's a valid criticism. If he doesn't point fingers there, there and there and say "these were the guilty parties", and instead gives different players varying amounts of blame, it probably has more to do with the fact that many of the parties involved did some things right and other things wrong. In the real world, there are not many pure villians, and things are rarely the fault of any particular individual.

            And no, misattributing the inventors of the modem is not even an oversimplification. It's completely irrelevant. It has nothing to do with the book, and is clearly outside of the author's expertise. If I wrote a book on C++ programming, and got the name of the inventor of quicksort wrong, that would not make my description of multiple inheritance any less trustworthy. A better criticism would be "this book needed a much better job of proofreading", and that would seem to be the editors' mistake.
            • Okay, let me make this clear: I found dozens of factual errors throughout the book, DESPITE the fact that I wasn't looking for them after the first two major errors I read in the first chapter. I certainly agree that the two major errors I cited were NOT really relevant to the dot-com industry, but they just happened to be the first two major errors I encountered, and I did not think it would be helpful to prepare a catalog of all the factual errors I noticed.

              I believe that if I were inclined to actually check the facts cited in the book, I would find dozens of additional factual errors (indeed, I would be surprised if I did not find at least 100 factual errors).

              There are three separate roles that failed here: editing, fact-checking, and proofreading. The book industry usually relies on a book's author for fact-checking. Many publishers devote very little money for editing, and that's a business decision that they make. The proofreading is absolutely the SOLE fault of the publisher.

              In the end, the question is whether the published book provides a benefit to readers. In this case, I found no benefit from this book, and I don't think that most consumers, investors, or business people would benefit from reading this book. For the people who somehow "missed" the dot-com boom-and-bust during the past 8 years (folks who lived on a desert island, or who were locked away in a basement writing Cobol code for the last 8 years), this book would be informative, but its factual errors make it unreliable even for that audience.

    • I agree that "this book actually stands a good chance of being the standard history of the dotcom boom-and-bust." That's why I was upset enough to write a review: I expected a "competent journalist's account," but what I got was a book riddled with factual errors -- mistakes that future readers might accept as true and repeat. I also don't think Cassidy really "tied it all together," other than by putting events on pages that all lie within the same binding. He offers no insight, no conclusions, and as I wrote, no real "Con" nor any actual blame for anyone. I think 'history' would be better served by a bound set of internet-boom-and-bust articles from Forbes magazine, or Fortune, or Business Week, since at least the mistakes in a magazine can often be forgiven due to tight deadlines. (FYI, the full, unedited text of this review appears at my own site at http://www.markwelch.com/perspective/dotcon.htm [markwelch.com].)
  • David Kuo worked there for about 6 months and knew just about jack squat about the company. A better account can be had from the founder: In the Company of Good and Evil (ISBN: 0971448108).
    • Seconded. I was there too. dot.Bomb is suck, but David's a nice guy.

      I'm guessing this is scott? greeting from the other cvillebased scott :-) See ya at rapture some night
    • I wasn't aware that Craig Winn was writing a book, but now I see that it's scheduled for publication later this month. I guess "Stultsinator" had access to an advance copy. I'll certainly read the book, if only because I did think that Kuo's account lacked a technical perspective (though I'm doubtful that Winn's account will offer more technical insight, it may at least blame problems on the programmers ;-)
    • I must disagree: I just spent two days reading "In the Company of Good and Evil," forcing myself to work through it, and it is absolutely the most hateful book I've ever read.

      What's really interesting, is that the authors succeeded in persuading me that the evil villains were responsible for destroying Value America -- but I easily concluded that the authors were more evil, and more responsible, than those they blamed.

      The authors spent a lot of time and energy blaming the people they hired for problems, and provide just enough detail to prove that those folks were incompetent fools. But the authors deliberately (almost artfully) omit the key information: they blame their "opponents" for buying millions of dollars of newspaper advertising, but they started the campaign and apparently spent even more. They fault their opponents for scheming and lying, but reveal that the authors were also lying and scheming even earlier.

      I have written and posted a lengthy review of the book at http://www.markwelch.com/perspective/good_and_evil .htm [markwelch.com].

  • Startup.com (Score:2, Interesting)

    by dcocos ( 128532 )
    If you want to see the inside of how "dot com" falls apart. Watch this movie, it gets long at times but if you've ever worked at one you'll get a feeling of deja vu.
  • How long before I get e-mails letting me know I should register "yourname.con" before its taken for only $70 a year?
  • Shown last week was insightful. It mainly focused on the investment banker IPO scam. Historically IPOs waited five years until there was a profit, e.g. AMZN should just being going to market this year. But the dot.craze offered companies with no profit and dubious revenue streams in just a year or two. Investment house analysts hawked these. Supposedly there is a "Chinese wall" separating the investment and broker side of a firm. However these analysts knew heir bonus checks depended on IPO profits.
  • Intereresting that the author seems to put some blame on Greenspan... Greenspan used to call the stock market tech boom "Irrational Exuberance" [federalreserve.gov]

    Support your local congressman... He needs some cash before campaign finance reform kicks in.

  • Captains Go Down with Ships (Score:3, Insightful)

    by 4of12 ( 97621 ) on Wednesday February 13, 2002 @12:53PM (#3000631) Homepage Journal

    One of the more interesting aspects I've read about the dot{bomb,con} phenomena was that, by and large, many of the chief officers of the companies rode them gallantly into failure: despite having huge paper gains as measured by stock values right after the IPO, they held on to those shares even as their companies went into power dives.

    From that perspective, the former CEO's and CTO's of the dot.gone companies deserve a little more respect than, say, the former executives of Enron, who finagled with SPE's while selling out stock at high prices.

    • Not gallantry. Their shares were restricted, that is, they couldn't sell them within a certain period after the IPO. And as a further reason to hold on to the shares, they were "insiders" and so were subject to insider trading rules, that generally required them to disclose their intention to sell in advance (which would drive the price down). So they really couldn't dump their shares.
      • well, they could have sold all the long-term calls they wanted, efectively locking in the current stock price. Yes, that means they don't participate in any further gains for the portion they lock in, but anyone who was suddenly worth many tens of millions and didn't protect the first few million in this way deserves what they get.

        The first few million is worth more than the next 50 million, in the sense that the first millions give permanent financial freedom. that means working on only what interests you, having as much time as you like for your family, and so on. The next 50 means more cool toys, but doesn't profoundly change your life the way the first few do.
    • The CEO of ValueAmerica (the subject of Dot.Bomb) made off with roughly $50M in profit.

      Most of this was made at the the outset of the ipo by an SEC loophole that allowed private shareholders to sell their personal stock to the market at ipo prices if there was sufficient demand and limited supply of ipo stock.

      It takes a 5 year old to figure out how to manipulate this loophole, and as five-year-olds go, Craig Winn is one of the better spoken, charismatic ones :-)

      Now if you wanna talk CTO's, yes, they get screwed, and left with a few million in debt, and generally walked over by the financial guys... yet somehow, they remain upbeat and happy (Hi Joe!)

  • Given that it isn't really about computers... (Score:3, Informative)

    by drauk ( 209241 ) on Wednesday February 13, 2002 @01:02PM (#3000699)
    Given that the book isn't really about computers or the Internet, but about economics, perhaps a more reliable review might be found in a publication more closely aligned with that subject. "The Economist" gives the book a glowing review [economist.com] (available to subscribers only). Some readers may even find The Economist to be a more learned journal than Slashdot and therefore more likely to deliver a balanced review.

  • Interpretive Errors in Review (Score:3, Interesting)

    by gmhowell ( 26755 ) <gmhowell@gmail.com> on Wednesday February 13, 2002 @01:30PM (#3000920) Homepage Journal
    I can recall only one notion that I don't recall reading elsewhere: the impact of Adam Smith's concept of "perfect competition" in an age when the internet reduces barriers to entry and removes friction from transactions. Cassidy writes: "In perfect competition, all goods sell at cost, and profits are zero." This insight helps us understand the folly of the recurring theme that because the internet is so big, it's inevitable that internet companies which hold a "first mover advantage" or which capture millions of "eyeballs" will somehow earn huge profits from their vast audiences. But Cassidy doesn't seem very committed to this theory


    The problem is the layman's use of the word 'profit' and the understanding of the concept by economists.

    Without getting too technical, the layman thinks of profit as anything above and beyond the cost of manufacture. To the economist, monopolist profit taking means the excess taken over the fair market price.

    Also, please read my journal article regarding 'perfect knowledge'. It is a key ingredient to any discussion of 'perfect competition', and one sorely lacking in many/most internet business transactions.

  • cassidy.con

  • Check your facts (Score:2, Informative)

    by raduga ( 216742 )
    I haven't read the book, but from the review it certainly sounds as though the author overlooked some really elemental fact-checking. He probably overheard or remembered some story about how the Altair 8800 was named, and then printed it verbatim from memory.

    Simple sanity-checking should have pointed out to him that The Altair(tm) was invented before the Star Wars franchise ever got under steam. Just a bit [google.com] of googling around would have found him the story he was looking for...

    Not for a character from Star Wars, but a planet, from Forbidden Planet [imdb.com].

    The planet, too, was named for the star, Alpha Aquilae [wisc.edu]. but is outside the scope of the movie, the book, and apparently the author's skull.

    There's also a persistent rumor (through Google, that may be part of the souce of his confusion) that the computer was named after a character or a planet from a Star Trek episode, but no such episode apparently exists.

    It's a strange day indeed, when Slashdot editors find themselves in better stead, for typos and fact-checking than the subjects of their articles, but these be strange days surely.

    • I'm sure you are right that there was an earlier reference to Altair in Forbidden Planet, and I don't know what the Altair's namer actually used as his source. I had often heard the story that it was based on "Star Trek," and there was one episode in which Altair is mentioned as a star system.

      The key here is that while the "Star Trek" and "Forbidden Planet" sources are each plausible, the idea that a computer released in 1975 was named after a non-existent "character" in the movie "Star Wars" (which was released in 1977) is a very obvious mistake that MANY readers will notice (okay, maybe only 1%) and the publisher, editor, AND proofreader should be embarrassed for letting it slip through. The other mistakes were failures of fact-checking (which most book publishers no longer do, trusting the authors).

  • The dot com boom, and subsequent bust cannot solely be blamed on poor management. Nor can it be blamed on justifiably irrational expectations. (If that is not a contradiction in terms.)

    Most importantly, it is not best analysed by those who claim to have been right all along, yet were strangely silent during the period 1997-2000.

    The best analyses will come from those who invested and lost their own (not other peoples') money.

    Why were so many individual investors (and I include 'angels' here) persuaded that pets.com was worth more than the aggregate market value of all other pet suppliers combined? Why were analysts so vocifiorous in their claims that the net was going to change the face of the economy for ever? (Did anyone ever compare the Internet to previous technology led booms? If so, let them come forward - don't let them crow after remaining silent during the boom years.)

    While we have a culture of 'I told you so, just not to your face, or indeed to anyone else at all', then analyses will be flawed and, frankly, self-righteous and arrogant.

    I look forward to Mary Meeker's words, and Henrey Blogets's words. (I won't necesserily believe them - but I look forward to reading them.)

    My thoughts only,

    Robert
  • I recall Robert X. Cringely talking about "perfect competition" long before the .com bubble.
    He said that sites like pricewatch.com and pricescan.com would make competition so fierce, and profits so thin, that nearly everything would become a commodity. Wish I could post a link...
  • So ISP is a buzzword? ISP is the correct descriptive title for companies like Earthlink, Mindspring, etc. Isn't that a little like saying "computer" and "the Internet" are buzzwords? I always thought words like e-commerce and synergistic were buzzwords.. What makes a buzzword a buzzword?

    • My point was that there were cycles of favored categories for investing, and many companies would announce their transformations to adopt the most current favored theme, in the form of buzzwords in business plans. Early on, the hot companies were the ISPs, but after the first wave of consolidation/mergers, investors were wary, so then the investments went to "e-retailers" (business-to-consumer sales), but then B2C fell out of favor with the Venture Capitalists, so new themes and buzzwords were adopted to attract funding.


      Once the financial community started moving through a series of "different" business models, the failure of some of the early companies could be blamed on that now-disfavored business model, allowing new funding to pour into the new dot-coms even as some of the older ones were collapsing.

  • He is going to be on Extension 720 (WGN, 720 am, Chicago) on Tuesday, February 26 at 9pm CST. WGN has a 50,000 watt signal that reaches about a dozen states and half of Canada at night. There is also a Real Audio stream at http://wgnradio.com/listen/index.htm

    There will be a call in number given during the show. Otherwise, you can email the show at MiltRosenberg@wgnradio.com

    I certainly plan to ask some question about all the typos, poor grammar and factual errors during the show.

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