First Boo.com. Then Net Imperative. Who next? With investors losing faith in the hi-tech sector it will not be long before others join the list of dot.com casualties in Britain. For sceptics unable to hide their glee, such moments reinforce their prejudices about the hype surrounding the so-called new economy.
But a few high profile collapses that are probably due to flawed business plans and poor management rather than a systemic crisis should not hide the very real potential benefits of the internet.
In a paper published this week Ben Broadbent and David Walton of Goldman Sachs argue that Britain is already two-thirds of the way towards rebuilding itself as a new economy, boasting greater stability and lower unemployment.
It is still missing the final building block - faster productivity growth - but Broadbent and Walton argue there is plenty of scope for investment in computers to pick up, and that this will facilitate the spread of e-commerce, particularly in business to business, where the real action is taking place.
They think business to business could boost growth and productivity by 0.5% points annually over the next decade, creating a cumulative increase in output of £45bn. Their predictions seem more than just pie in the sky: anecodotal evidence suggests many big established businesses are embracing e-commerce enthusiastically, not always knowing where it will lead.
At a conference on the digital economy this week organised by the Royal Institute of International Affairs, Mark Hunter, chief executive officer of Axon consultancy, said he was working with many FTSE 100 companies to help them adapt their business models to the net, breaking down corporate barriers and redesigning supply chains.
While mocking predictions of sales people becoming irrelevant and large profitable companies being vanquished by unprofitable start-ups, he argued that the net was bringing customers and suppliers closer together - often for mutual benefit. He cited the example of WH Smith - which, instead of a linear supply chain with publishers at one end and newsagents at the other, now had a much more integrated approach.
Other big companies reinventing themselves as clicks and mortar operations included Wal-Mart, which had set up a dot.com competitor for itself, and Unilever, which was becoming a house cleaning company, he said.
Research published today by consul tancy London Economics suggests the same benefits of greater internet use are waiting to be grasped by small and medium sized business, which account for nearly half of Britain's turnover and the working population.
Commissioned by GroupTrade, a new firm planning to use the net to buy goods and services on a pooled basis for smaller businesses, the report estimates the savings from business to business e-commerce could eventually reach as much as £24bn a year, which is equivalent to 3% of national output - although it stresses progress will be gradual.
Of the estimated savings around 30% are accounted for by discounts negotiated by bulk-buying intermediaries, such as GroupTrade, chaired by Adair Turner, the former director general of the CBI.
The remaining 70% come from reducing the time and expense of searching, or dering and accounting for purchases. "These reductions are comprised of savings in search costs, time saved in procurement, reduced errors in ordering and invoicing, intelligent stock management, lower ordering and billing costs and reduced inventory costs," says the report.
Cost savings for firms with between five and 250 employees average £37,000 a year and businesses employing more than 200 could benefit by £600,000 a year.
"These are substantial sums with immediate benefits for a company's bottom line," said Mr Turner.
In competitive markets Turner says he would expect the benefits ultimately to accrue to consumers in the form of lower prices. But the potential rewards in the short term of being a first mover should not be underestimated.
Investors spotted that potential some time ago, pouring millions into speculative hi-tech ventures. Many made costly mistakes, taking a punt on almost anything with a dot.com in its name instead of making sure the company had a sensible business plan first.
Boo.com is a case in point. While its founders had plenty of glamour, they appear to have lacked basic business skills and were trying to sell a product - fashion wear - that has proved difficult to shift on the net. In that case investors' greed got the better of fear. Now, with hi-tech share prices collapsing around the globe, it is the other way around.
Fear is in the driving seat and speculative funding is drying up. But it does not mean there was no substance to the internet goldrush in the first place.
As Sushil Wadhwani of the Bank of England's monetary policy committee told MPs on Tuesday: "Valuations in some sectors have looked a bit racy and you are seeing an inevitable correction, but behind the hype there is a real transformation occurring and we need to focus on that."
