The chancellor today echoed dot.com wariness voiced by the head of the CBI, warning investors to think carefully before leaping into the internet frenzy now blowing the roof off global stock markets.
Several traditional businesses were swept aside yesterday to make way onthe FTSE 100 index for e-business and internet companies.
CBI head, Digby Jones, warned investors not to dismiss such traditional companies, cautioning thatotherwise good investment opportunities will be passed up.
Digby Jones,formerly KPMG’s vice-chairman of corporate finance, took up the top post at CBIon January 1, 2000.
Shares in Lastminute.com, an internet company offering last minute deals, havethis week trebled, valuing the company at almost £1bn. For old-school tradersthis is a phenomenal valuation figure to place on such a new company.
Lastminute.com, like hundreds of other new internet start-ups, is not expectedto show a profit until 2004.
Many fear there is too much speculation surrounding the internet boom and thatit is a bomb waiting to blow up in the face of its investors.
Of the 572,000registered Lastminute.com users, only around one in twenty have actually bought somethingfrom the company.
Gordon Brown’s hesitant comments on BBC’s Today programme came shortly after upbeatcomments made by both the prime minister and Stephen Byers, secretary of statefor trade and industry, on the need for Britain to cement its future in theworld of e-communication and e-commerce.
Feature:Brit.com – Boom or bust?