- guardian.co.uk, Wednesday 22 September 1999 02.54 BST
Watching Freeserve, Britain's biggest internet service provider, go into free fall so soon after its debut on the stock market is not a pretty sight, however predictable it may have been. But it does not signal the end of the unprecedented surge of entrepreneurial start-up companies using the internet in the UK in recent months. Indeed, by dousing totally dream-like expectations, it will bring a much needed dose of realism to the scene.
Freeserve's launch was innovative. It offered free access to the internet and then tried to bolt on lots of other services (from news to shopping) to keep customers on site. The trouble was that it spawned rivals also offering services and free net access and gave a fillip to an even newer breed of rivals who actually pay the punters (in shares, electronic money or cash) to use their websites.
There are two compelling reasons to encourage this very unusual outbreak of entrepreneurialism in Britain. First, the whole of the business world - retailing, wholesaling, distribution and the relationship between companies and their suppliers - is being turned upside down by the internet revolution. Only those that embrace it will survive.
The second compelling reason is that if we do not get stuck in, the Americans assuredly will. Already two years ahead of us (though the gap is starting to close) they will sweep all before them in shopping, banking and special services unless they encounter serious competition.
Britain is starting to grow impressive web-based companies including Lastminute.com (specialising in eleventh-hour deals for hotels, holidays etc) and QXL, the online auction house which said yesterday that it was coming to market with a valuation under £250m. This is less than half the predictions made during web mania earlier in the year and suggests the market may be maturing. If so, the scene could be set for a surge in real activity creating more real companies employing real people - and paying real taxes.
