Greed, Lack of Knowledge Blamed for Dot-Com Demise, Study Finds

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A combination of greedy investors and unknowledgeable executives is to blame for the dot-com demise, according to a blistering study by the Washington-based Pew Internet and American Life Project.

The study asked: "Who should shoulder the blame for the downturn roiling the technology industry?"

Of 2,096 American respondents who said they were aware of dot-coms' financial woes, 67 percent said they blamed "irrational exuberance" for the steady decline in Internet stocks, while 56 percent thought flimsy business plans were to blame.

Only 38 percent of Americans cited "youth and inexperience" of the people who ran Internet companies in the early 1990s as the reason for the industry's downturn. Most research concludes that it was common during the early Internet boom for only a few workers at a dot-com to be older than 35.

"I thought more people would blame youth," said John B. Horrigan, senior research specialist at the Pew Internet and American Life Project. "Americans generally have an encouraging attitude toward youth going out and taking a risk. But given all the stories of 25-year-olds with big houses and several cars, I thought people would get annoyed. For the most part, they didn't."

There were exceptions, however. About 44 percent of respondents older than 50 cited youth and inexperience as the primary causes of the problem, compared with 34 percent of respondents between ages 18 and 29.

In addition, two-thirds of all respondents said they have heard of layoffs, closings or falling stocks of Internet companies as a result of the crisis. About one-third of respondents added that they have followed the story in the media closely.

Only 7 percent of Americans said their family has lost money in a dot-com investment; 8 percent of Web users have seen one of their favorite sites vanish during the fallout, and 9 percent know someone who has been the victim of a dot-com layoff. That means the developments have personally affected about 31 million Americans, the study concluded.

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