duce steady earning power. Arrogant business trans-
actions abounded as Internet companies failed to
address sales ratios, inventory turns, and margin
losses. Many companies took considerable liberties
in how they reported revenue accounting, and some
used fraudulent tactics to inflate the profits they re-
ported. The increasing stock prices, individual stock
speculation, and widely available venture capital led
companies to deviate from standard business mod-
els or plans.
Impact The rise of Internet commerce drastically
transformed business management principles. The
new economic age brought forth technological in-
novations that helped the marketplace by improving
productivity and changing consumer behavior. The
rapid flow of information prevented the buildup of
excess inventories, so various stores had lower sur-
pluses, but those that remained struggled to sustain
themselves in the marketplace with new competi-
tion and reluctant investors.
A division was created between the “pure plays,”
which were Internet- or e-commerce-driven and had
to deal with cost-management and pricing issues,
and the “click and mortar” companies, which re-
tained physical stores and locations but expanded
into e-retail. The “click and mortars” were able to
take advantage of well-established brand names,
good customer bases, and established supply chains
and inventory systems. For example, Wal-Mart, the
technical leader in the retail industry, went through
a series of redesigns and changes in sales strategies268 Dot-coms The Nineties in America
Netscape Communications Corporation founders Marc Andreessen, right, and Jim Clark stand outside their offices in California. The
company began trading in 1995 at $28 per share, with the price soaring during the year.(AP/Wide World Photos)