The Magazine

Irrational Exuberance

Life in the dot-com boom and bust.

Feb 9, 2004, Vol. 9, No. 21 • By DAVID DEVOSS
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A Romance

by Gary Wolf

Random House, 282 pp., $29.95

Starving to Death on $200 Million

The Short, Absurd Life of the Industry Standard

by James Ledbetter

Public Affairs, 291 pp., $26

There Must Be a Pony in Here Somewhere

The AOL Time Warner Debacle and the Quest for the Digital Future

by Kara Swisher

Crown, 289 pp., $24.95

Stealing Time

Steve Case, Jerry Levin, and the Collapse of AOL Time Warner

by Alec Klein

Simon & Schuster, 336 pp., $25.95

Fools Rush In

Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner

by Nina Munk

Harper Business, 352 pp., $26.95

American Sucker

by David Denby

Little Brown, 320pp., $24.95

AT THE BEGINNING of the 1990s, 66 billionaires topped Forbes magazine's list of the 400 Richest People in America. By the end of the decade, the number had risen to 274. Never before in the history of the republic had there been such a period of wealth creation. In the previous century dominated by Carnegie, Morgan, and Rockefeller, the 1990s would have been called a Golden Age. Most of America's new billionaires, however, preferred to think of themselves as living a "paradigm shift."

Executives atop the corporate food chain said America was inventing a "New Economy." That certainly seemed to be the case. For most of the 20th century, fortunes had been built on petroleum, mechanized labor, and ferrous metals. But as society raced toward the millennium, the country's richest companies consisted of little more than electrons, binary code, and stock options. New Economy executives, collectively known as "the digerati," seemed unconcerned that many of their enterprises owned little real estate or fixed assets. Why worry about profit when even "prerevenue" companies had astounding market value? The analog world of bricks and mortar was crumbling, they intoned piously. Internet companies selling information technology were the future, and anyone who disagreed simply didn't get it.

Lots of smart folks had climbed aboard the Internet bandwagon. Futurists Alvin and Heidi Toffler announced that human society had been transformed three times: first by agriculture, then by capitalism, and now by cybernetics. Novelist Michael Crichton predicted that the mass media as it presently existed would be gone in ten years. "Vanished, without a trace," he affirmed. Over at the Electronic Frontier Foundation, computer libertarian and Grateful Dead lyricist John Perry Barlow argued that public perceptions of wealth, ownership, and copyright were changing "more fundamentally than at any time since the Sumerians first poked cuneiform into wet clay."

And then it ended, sort of. In a wave of bankruptcies, one dot-com after another succumbed, leaving investors to conclude that their new paradigm had relied in part on a Ponzi scheme kept in motion by overpriced web advertising and corporate stock. Now, after three years of recession, innumerable accounting scandals, the NASDAQ's collapse, and the most disastrous merger in corporate history, it's appropriate to look back on the dot-com mania, if only to insure that the promise of a wired world eventually will be redeemed.

SIX RECENTLY PUBLISHED BOOKS, all of them written by working journalists, offer complementary perspectives on this period. Three are by writers who covered the dot-com boom and its eventual bust as business reporters for Vanity Fair, the Washington Post, and the Wall Street Journal. Two are more intimate portraits by industry insiders whose magazines--Wired and the Industry Standard--both shaped and reflected the digital culture's hubris, enthusiasm, hysteria, and deceit. The final offering is an introspective tale of a journalist who abandoned common sense in a desperate pursuit of the wealth that for a few brief years seemed to be every investor's due.

If information technology had a bible in the mid 1990s, it was a monthly magazine called Wired. Founded in 1993 by Louis Rossetto, a Long Island Republican turned Libertarian, Wired was premised on the belief that people linked by computer technology had the power to override existing political authority to create an autonomous global community. "You, the information rich," Rossetto wrote in his opening manifesto, "are the most powerful people on the planet today. You and the information technology you wield are completely transforming our lives, our families, our neighborhoods, our educations, our jobs, our governments, our world."