One thing that sets business on the Web apart is the speed with which the consolidation is taking place. They needed complementary skills. Risky Business One reason they need these skills is because the life span of a typical small business can be painfully short. Half of these small businesses have closed by the end of the first four years. Half say their business failed, closing while still owing money to creditors.
Retail enterprises tend to be especially risky.
But the fact that all these dot-com retailers went public so quickly exposed their balance sheets, exposed their immaturity. Some, like Michael Dell, who was 19 years old when he began building personal computers in his college dorm, brought in seasoned managers to make the transition. In the early 1900s, for example, William C. Durant was twice ousted from General Motors, which he created through the acquisition of more than two dozen car and parts-supply companies. The desire for a big return on investment has fueled much of the speculation on new technological marvels. Enthusiasm gave way to disillusionment as company after company failed to make expenses, let alone pay dividends to their luckless stockholders.