Drkoop Hasn't Been Kicked Off the Island Yet
Through all the carnage, the online medical site continues
to survive despite cash troubles and stories of its impending doom.
Mar 12 2001 04:48 PM PST
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
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
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.
(originally published on The Industry Standard website)
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