Carry on up the Internet

There was a flurry of activity among the many Internet companies last week - on reflection it wasn't just a flurry, it was more of a steady draught that had turned into a blast. And it wasn't just activity among existing Internet companies, there was much jumping up and down from the many wannabe Internet firms.

This was partly due to the Internet World Show in San Jose, as there's nothing like an American trade show to bring even the most insignificant announcement on a subject to the front of most corporate communications managers' minds. But there was substance as well as fluff on offer: a deluge of product announcements, a flood of initiatives, and more than a trickle of company consolidations and takeovers. Traveling Software, best known for its Laplink comms products, snapped up Milktruck, a developer of off-line Web access technology which allows users to read Web pages off-line without losing any text, graphics or audio links. Then US firms UUNet and MFS combined forces to be able to offer end-to-end Internet and telecoms services to businesses.

That the computer industry has caught Internet fever there's no doubt, but there's still every chance that parts of it could catch an Internet cold. The situation is reminiscent of the early days of the personal computer industry - outspoken visionaries and pioneers making their mark, rival companies and rival products vying for standards and one day's overnight success becoming the next day's spectacular crash. The difference now, of course, is that given the pervasive nature of computers many more dealers, distributors and users stand to get injured by the spectacular crashes.

I'm not saying steer clear of the Internet, that would be commercial madness, but perhaps a spot of treading carefully wouldn't go amiss.

Which brings me to another point. Internet stocks are over-valued because financial institutions all want a piece of the action. Netscape's newly split stock is currently priced at about $60 per share, an almost unbelievable figure for a company which, although it's growing rapidly, made a $3.4 million loss last year. Remember what happened in the late 80s when the still rapidly growing PC market started to consolidate? Investors couldn't get rid of their shares fast enough and everyone became very, very wary of high technology businesses. What's that they say about history repeating itself?