CAUGHT OUT IN THE NET

What s in the bubble, then?
What do dot.com companies actually do?
There was a fascinating piece in the Observer a few weeks back by a chap who d resigned as editor of a London rock magazine in order to make his fortune as a internet entrepreneur. Three start-up dot.coms had tried to head-hunt him from the mag., so he reckoned he d have no problem getting sorted.
The bulk of the piece comprised despairing descriptions of encounters with pony-tailed persons of languid aspect and fierce confidence in their company s prospects. What unnerved the ex-ed was that nobody explained, or seemingly thought it necessary to explain, what exactly the companies produced.
Our man had been advised that the latest phrase was content is king , and so kept saying it. Content is king. Everybody agreed. Some punched the air. Yeah! Right! Content is king!
But that s as close as he came to finding out what class of info or entertainment or specialist service any of the companies he spoke to was involved in. In the end, he fell back in confusion and returned to rock hackery, trembling with intimations of futility.
All, however, is now explained, maybe. We have confirmation from the US of A that we who said from the start that there was nothing in this dot.com stuff were right all along.
Word comes (via the internet, natch.) of a piece in the New York Observer (February 4) on the rise and rise of a company called NetJ.com, whose market capitalisation has soared by 700 percent since the middle of last year. With a current valuation of $22.9million, NetJ.com remains a relatively small operation although not so small that it hasn t made millionaires of a couple of, er, risk-takers who got in on the ground floor.
What does NetJ.com own to underpin its market valuation? Well, according to its entry with the regulatory body, the Security and Exchange Commission, it has accumulated losses of $127,631 . . . extremely limited assets (and) no source of revenue.
Also: The company is not currently engaged in any substantial business activity and has no plans to engage in any such activity in the foreseeable future . . . NetJ.com currently has no business operations . It does nothing, and has no plans to do anything.
You might think that this confession of indolent inertia would be something of a drawback in the frantic world of cybernautic entrepreneurship. But, not a bit of it. In fact, au, as we say in the Bogside, contraire.
The key fact to keep in mind, according to the NY Observer, is that Once an Internet company is considered established, or committed to a line of attack, it loses its allure. It leaves itself open to the sort of hard analysis Internet companies strive to avoid. To be desirable, an Internet company must be slightly unknowable. It must remain forever in a state of pure possibility .
NetJ.com, it turns out, began life as NetBanx.com, a hi-tech debt collection agency. When this proved unprofitable, it went into another line of work. Or, rather, another line of not-work. It began searching to acquire or merge with another company that actually does something . Some of us might think, again, that this is a strange state of affairs. Why would a company that does something want to merge with a company that does nothing?
The fact that NetJ.com is a public company with a share price that goes up and down every day apparently makes it potentially desirable to a private company that wants to avoid the hassle and the wait involved in going public. NetJ.com offers itself as a kind of bandwagon, albeit one without wheels . And it is by no means unique. The recent increase in the number of wheelless bandwagons on Wall Street seems to be such as to threaten gridlock any day now.
A lot of putatively successful Internet companies raise capital first on the pretext of creating one kind of business, only to deploy it in the creation of another . . . The trick is to keep yourself new. You have to present the stock market with a face lift every three months.
That is the beauty of NetJ.com. By doing nothing, it has avoided ruling out the possibility of not doing something else.
The company s SEC entry elaborates: The company does not intend to restrict its search for a partner to any particular business or industry. Its list of possible future activities includes, but is not limited to, high tech, natural resources, manufacturing, Research and Development, communications, transportation, insurance, brokerage, finance and all medical related industries.
When you do nothing, there s nothing you don t do. Apart from embalming, chicken sexing and double-glazing, possibly.
Naturally, NetJ.com is well-sussed to the competition.
Management believes that there are literally thousands of blank check companies, many of which have substantially greater financial and management resources.
But, potential investors are assured, the feisty little newcomer fears nobody when it comes to nothing-doing.
And there s more, much more. Or, to put it another way, less, much less. But that s enough.
Capitalism, eh? All this and Moore McDowell roaming the streets.