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To Old-Time Techies, Dot-Com Troubles Ignore the Lessons of History

By Carrie Johnson
Sunday, December 17, 2000; Page L01

Listen up, sonny, the old guard's got a story to tell.

As the dot-com shakeout continues, and each day brings fresh rounds of layoffs and bargain-basement mergers, talking heads from the press and the consulting industry yammer on about profitability and burn rates.

Lost in the noise are the views of people who have worked with technology for decades, through the era of the mainframe and the development of the Internet to the millennial madness of the past two years.

People like Mario Morino, the eminence grise of the D.C. area's entrepreneurial community, or Gabe Goldberg, who began his career tinkering with mainframes at IBM, or even Vinton Cerf, who helped design the architecture of the Internet, have a more optimistic perspective--in part because they have lived through similar downswings in the past.

The Internet bubble of the past two years calls for reflection and not panic, says Art Marks, a venture capitalist who has spent 29 years in the high-tech industry.

"It ignored basic principles--that the value of a company should be based on a stream of future profits and not on a dream of future promises," says Marks. "We are still in a period of significant growth and wealth creation by technology companies."

To longtime observers, it seems the tech sector is always cycling up or down. Morino remembers the last time the D.C. area took on the reputation of a high-technology hub. It was the late 1960s, when local electronics firms enjoyed successful public offerings and "remarkable market capitalizations."

"Money was chasing after companies with no business plan. The objective was the IPO," Morino says.

Then came the recession of 1971 to let the air out of the inflated market. As in the past few months, companies shuttered their doors or sold their assets for pennies on the dollar.

The lesson, Morino says, is that in any career, even his own 35-year-ride, "you got a lot of bumps."

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