Sun, Jan 14, 2001 - Page 17 News List

Dotcom dreams fade to black

Many people thought that the Internet was a rainbow that lead to a pot of gold. Unfortunately, Web sites have been closing at a prodigious rate, leaving employees jobless while the lucky survivors watch and wonder if they will be next to go

By Yu Sen-lun  /  STAFF REPORTER

This year, winter in Taiwan has been far from cold, but for people like Stone Lee, a 28-year-old Internet marketing staffer, it has been the chilliest winter on record.

"We were informed there'd be no weiya [an end-of-year party in which company staff can expect to win a variety of valuable prizes] and no bonus," he said. Now, he is even worried that he may not receive his salary for the previous month.

Since October, Lee said, he has been "doing nothing" at work. Although he goes to the office every day, his first task is to log on to Manpower 104 (a popular job search Web site), then activate ICQ to chat with Internet friends. "We bitch about our bosses, commiserate about our common plight in a go-nowhere Internet business and exchange job information and gossip," he said.

Lee said that this is the third month in a row that his company -- a sport content Web site -- has been late paying salaries. "Each month it gets later. This month's salary was paid 10 days late," he said. Everyone in his office knows that the company's financial situation is precarious, he said.

So at the end of what was touted as an auspicious Dragon Year, many people in the Internet industry find themselves in a situation similar to Lee's -- doing nothing at the office, waiting for a job offer instead of a bonus.

The run-up to the Chinese New Year is putting the brakes on job hunting for dotcom employees who suspect that their companies are not going to survive the current winter.

"I'm just hanging on for the moment. With Chinese New Year coming up, I can't really change my job just now, so I just have to wait," Lee said. The weeks following Chinese New Year, after year-end bonuses have been paid, is traditionally the time when people change jobs. In the lead up to the celebrations, there is little opportunity for movement.

Black Friday

The mood of despondency is pervasive in the dotcom sector, and stories of layoffs regularly appear in the business press. According to Victor Chan (詹文男), director of the Market Intelligence Center (MIC) of the semi-governmental Institute of Information Industry (資策會), it all began with the drying up of liquidity since the NASDAQ plummeted on April 15 last year. With stock prices in free fall, investment banks -- the largest source of funding for the recent rash of dotcoms -- no longer have the cash to support these projects.

According to a report from Webmergers.com, dotcoms are closing at a rate of one a day in the US. Throughout the US and Europe, there have been 130 dotcom shutdowns since the beginning of 2000. In October of last year alone, there were 21 shutdowns, including pets.com, furniture.com and mothernature.com.

It was late last summer when people began to suggest that the dotcom bubble had burst. Large scale staff cuts began in November. According to MIC's research unit Focus on Internet News and Data (FIND), at least 10 of Taiwan's major dotcoms have been forced to lay off staff since then, including Yam, one of Taiwan's pioneering portal sites, Acer121, the business branch of Taiwan's leading computer maker Acer and EasyPop, a Web site established by the China Times Group. Downsizing has ranged from 20 percent to 50 percent (See table).

Layoffs are never happy occasions for anyone, and information circulated on the Internet suggests that companies fear reprisals from staff. An unconfirmed story has been circulated via the Internet through e-mail about the layoffs that took place at Acer.

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