Fraudulent financiers caused dotcom crash

The internet boom and bust was nothing more than a fraudulent pyramid marketing scam engineered by unscrupulous financiers, according to industry heavyweights speaking at this year's NetEvents European Telecoms and Networking Symposium.

"I believe that many of the dotcom phenomena were in fact examples of fraud, or a really good repackaging of pyramid marketing," Brice Clark, Hewlett Packard's director of strategic planning, told NetEvents delegates in Sintra, Portugal on Saturday.

"It was, to me, almost like the teenage years. It was a pretty self-centred place for a while, and to a certain extent naive, but the financial community was not," Clark added.

3Com's director of Northern Europe, Bert van der Zwan, also pointed the finger of blame at the financial community, but stressed that technology companies needed to shoulder some of the guilt: "I think we are all to blame. We lost ourselves," he said.

"Who is to blame? All of us. We are all mature people, and whether you have a finance or technology background, or you're somewhere in the middle, we all knew this was not sustainable."

Independent industry analysts pointed out that unprecedented levels of private wealth derived from the economic boom years of the 1990s, had been placed in the hands of investment specialists who caused the markets to overheat.

Dean Bubley, technology analyst, equities, at Granville Baird, said: "One of the underlying factors was that the economic success and prosperity of the 1990s gave more cash to people and institutions than they needed."

Bubley added: "There were disposable incomes for individuals, or sufficient surplus cash in the system to invest, from a private equity point of view, in startups. This was then compounded in the first three years of the 90s with the phenomenon of internet-based share trading."

HP's Clark told vnunet.com he believed the industry had matured sufficiently to prevent a rerun of the internet boom and bust.

"I think we have learnt some things. We have also figured out that the financial market should not be treated as an alternative to Las Vegas."

"However, on the other hand, we all have to go through those teenage years," Clark added. "You don't learn to be an adult without being an idiot for a while first, right?"