In the past week, eToys (ETYS) has filed for bankruptcy and closed its site, Yahoo (YHOO)'s CEO has departed and the portal's stock has tanked, and Idealab has announced that it will no longer incubate companies from its famed Silicon Valley office. Across this rapidly deteriorating Internet Economy the carnage continues, raising one glaring question: Just how the hell is Drkoop.com still alive?
The company has been dying longer than Bob Hope. It was dying in April when the stock dove below $2 a share. It was dying when the company laid off 35 percent of its workforce in March 2000. It was dying when it received an emergency $1.5 million bridge loan in June. And it was dying in August when it got an "emergency transfusion" of $20 million in venture funds.
Then a month ago, the company was pronounced as dying yet again. Its shares were trading at 50 cents. It was threatened with being delisted from the Nasdaq. The company announced that it would layoff 45 employees and relocate from Austin, Texas, to Southern California.
Meanwhile, a bevy of fabled dot-coms also have become roadkill on the information superhighway.
The Drkoop deathwatch vigil makes Generalissimo Francisco Franco's lengthy demise feel like a car crash. Last year, I wrote a column about the Monty Python syndrome in response to a scene from the nerd classic Monty Python and the Holy Grail. In the film, a man pulls a cart through town calling for folks to bring out their dead, but one prospect stymies him by stubbornly protesting: "I'm not dead yet!"
Drkoop should be cast in that role.
A lot of folks know that Drkoop has had cash troubles, that it's named after the former U.S. Surgeon General and that it's going to fold in the near future, but do they even know what the site is supposed to do? What services it claims to provide?
During the past two years, the site may have inspired more gloomy news stories than the number of actual customers who are using its services. Ultimately, Drkoop has become the Internet Economy's Andy Warhol: famous merely for being famous.
But in the wake of all the notoriety, the site's cockroach-like resiliency reveals some of the dynamics of our current economy that are instructive. Perhaps the most important is the continued divergence between real and perceived economic health. One would think that time would allow for convergence of the two, yet what we've seen during the past six months is a ricochet from excessive glee to excessive gloom, while the true nature of value floats somewhere in between.
The ethereal nature of e-businesses continues to amplify the volatility of how these companies are valued. At a time when most Web sites continue to be merely ideas for businesses or theories of companies, it's little wonder that people prefer to draw conclusions rather than report true performance. In essence, we still haven't learned the true metrics of success, aside from the obvious yardstick of profitability. Until we get a better handle on what makes an e-business viable, perceptions will trump reality.
Drkoop's refusal to fold when its demise was predicted by so many reminds us that markets are aggregated from individual companies and that the performance of an overall market never accurately determines the value of any one player. Granted, the degree to which collective attitudes determine how investors allocate their capital and make buying decisions certainly affects companies. Perceptions have a nasty way of shaping reality. Yet the correlation is dynamic and not always direct. The first step toward economic reality is a simple assessment of reality.
And so I salute Drkoop, the Richard Hatch of the Net. Let the company's living death remind us of the mixed-up Web that continues to change our lives.
