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This chapter is from the book

The Hype Machine

The press leapt onto the Internet bandwagon with an abandon that is astonishing only a few years later. Without the media hype machine, it's hard to imagine the bubble getting so large.

"Follow the personal computer and you can reach the pot of gold," said George Gilder. "Follow anything else and you will end up in a backwater. What the Model T was to the industrial era . . . the PC is to the information age. Just as people who rode the wave of automobile technology—from tire makers to fast food franchisers—prevailed in the industrial era, so the firms that prey on the passion and feed on the force of the computer community will predominate in the information era."84

"The easy availability of smart capital," wrote The Wall Street Journal, "the ability of entrepreneurs to launch potentially world-beating companies on a shoestring, and of investors to intelligently spread risk—may be the new economy's most devastating innovation. At the same time, onrushing technological change requires lumbering dinosaurs to turn themselves into clever mammals overnight. Some will. But for many others, the only thing left to talk about is the terms of surrender."85

What more could be said? The old economy was dying; the new economy was triumphant. What more would a retail investor want to hear? The only question left for her or him was how to get shares in the clever mammals—and with that the investment banks were preparing to help.

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