Bankcruptcy on the Net

Luís Ángel Fernández Hermana - @luisangelfh
10 July, 2018
Editorial: 218
Fecha de publicación original: 6 junio, 2000

Never say it will rain until you hear the thunder

Everyone knows that the Internet bubble is bound to burst sooner or later. Increase in speculative capital, the carcasses floating around trying to become “the best site in the world, where users can find anything and everything”, plus labour inflation on many of these new Net sites – it is a bit like a drifting iceberg saying “Bring me more Titanics, this is war”. Nonetheless, in the cyberspace era things move so fast that sometimes not even the expected “crash” has time to really take shape. No sooner had the “first bankruptcy on the Internet” occurred with a great song and dance in the media, than the very same company was bought up again and no-one really knows why, what for or what exactly was acquired. And everything points to these ups and downs being grist for the mill in the media for quite some time to come yet. The floods of stories about the thousands of millions in all currencies suddenly appearing from nowhere to be invested on the Net, have been replaced by the all too predictable stories of bankruptcies and lay-offs. In fact, rather than being newsworthy, these stories have all the makings of becoming a colossal bore. went down the tubes to a great fanfare in the middle of May. It was the opening story on television, radio and newspapers: the first Internet business to fail. 15 days later bought it up for a very healthy sum indeed. So, what did it buy? Its reputation, the brand name, the rights to its content? And what for? To convert it into the largest fashion portal in the world, no less. Whether this is the fashion for going bankrupt or clothes is not really clear yet. All will be revealed in due time. In the meantime both the media and Net analysts continue to cover events in the Information Society with astonishing superficiality.

No matter how attention-grabbing the news of bankruptcy among Internet companies is, the real shake-ups on the labour market are still those in the industrial world, where thousands of workers are tossed out onto the streets all the time, such as was the case in the British car industry recently. A very different kettle of fish from what happens to companies like or US digital companies cutting down on staff: no sooner do 50 or so workers hit the streets than they find other jobs elsewhere or work from home.

As we have said before, the key factors in the Internet economy are barter and learning how information flows work on the Net. These are the two basic activities in an environment where, in principle, users have the same opportunities for content generation (participation), learning to spread this around among other internauts (relating) and reacting to their actions (growth). And this can be done no matter what labour relations one has with the real or the digital world (landowner, banker, privileged heir, watermelon trafficker, wage-earner or unemployed worker). The Net is a formidable school turning out go-ahead people, for here there is no other option but to learn to deal with the raw material involved (data and information), and how to process, package and distribute it. The advantage is that these same people can design all these processes in order to fulfil their objectives.

This school, which opened the day that the Web made it possible to pull together the loose ends of distributed intelligence on the Net, has put a new generation of thousands of businesses and new-style entrepreneurs on the digital market. They did not begin with large investments (essential nowadays), nor did they have an assured workforce. Nevertheless, it was their work that made the Net what it is today and their innovations that drew the lines of the digital landscape as we know it. And in this Internet sector, fundamental for understanding the economy of communication flows in its widest sense, there have been victims, many people that did not make it.

Not everyone could afford to devote themselves full time to the “new economy” and some had to look further afield, either inside or outside the Net. But they left indelible imprints for the use of the financial diplodocus so admired by the media today, both traditional or in the Net, since, when it comes to adoration of large investors and delight in their fall, there is not much difference between them.

This is to a large extent, if you forgive the paradox, the real economy of the virtual world. It is on this economy that the fundamental systems of the Internet are being constructed, from the all pervasive portals to the most basic and routine mechanisms. For example, in all the OECD countries (the industrialised ones) the rate of job hunting on the Net is doubling every year. And this is a cross-border phenomenon: those that are out to be fished don’t always know where the fishing rod is. It could be in their own city, country or abroad. Along with supply and demand for jobs, there is the offer to manage online companies, in other words, de-localising traditional internal activities in order to reduce the necessary operational structures and cut costs. Growth in these sectors– all set up about five years ago by numerous pioneer companies, some of whom have survived and others who have gone down the digital drain –where barter is the basic means of operation, point to a phenomenon of considerable proportions which we will be taking a look at over the weeks to come: the founding of newsrooms of considerable proportions to sustain the rate of portal growth, whether specialised or generic. In many cases there are lots of goodies to be had now, and a little bit of hunger in the future when the bankruptcies –whether spectacular or not depending on what is in fashion in the media at the time– that everyone is expecting flood the Internet.

Translation: Bridget King