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Clearly, Wednesday’s rate cut by the Federal Reserve and tremendous surge in the stock markets was not enough to put an end to the ugly mood that has pervaded the tech sector.
Jobless claims are up all over, and you can blame technology firms for a lot of the problems. For example, CMGI Inc. subsidiary Engage, an Internet advertising firm, is axing 550 employees, or half its workforce.
The news is even worse at eToys, which is letting go 700 of its 1,000 workers following a disappointing Christmas season. What’s more, AT&T Broadband said on Thursday it was laying off 300 workers in the Atlanta area to cut costs.
The high-speed Internet sector has been a particularly troublesome area. Late Wednesday, Paradyne, a Largo, Fla. provider of digital subscriber line systems said it was eliminating 20 management positions. Add it all up, and it’s enough to make you think the Web market is headed nowhere, fast.
We could go on, and we will, but not about the ugly developments in the Web sector, of which there are far too many, but instead, we’ll focus on the faint signs of life that point the way to a rebound.
Simply put, the toughest thing to remember about the Net while it’s suffering through this bleak phase is that it’s still a battlefield worth fighting over. Barnes & Noble.com’s announcement Thursday morning of an E-Publishing division is a vivid reminder of this.
If the Web were truly as dead as the news from eToys, Engage, and AT&T Broadband make it appear, then why would Barnes & Noble cut a deal with an author like Dean Koontz? Why create a royalty system for publishing books online that offers authors a higher percentage of the list price than they currently get from publishers of hardbound books?
If the Web weren’t going anywhere, the move wouldn’t make sense. There wouldn’t be any point to angering publishers like Random House that provide the Barnes & Noble with the very products it needs to survive.
Even Stephen King’s highly public failure to personally publish his latest book on the Web wasn’t enough to discourage Barnes & Noble’s from venturing into E-Publishing.
Along the same lines, take a look at the news that one of the first priorities of the new Congress will be Web privacy. Now, we’re no fans of legislative mischief. But once again, if the Web were truly in need of being administered its last rites, then Congress wouldn’t bother.
It’s hard to see that now, but obviously there’s still enough of a belief in retail E- Commerce to have prompted Barnes & Noble to start its E-Publishing business and Congress to look at Web privacy. That doesn’t sound like an industry that’s going nowhere.