After the closing bell ended Monday's rampaging bear market, I walked across the road from a stunned Wall Street, past the bronze bull which symbolises rising stocks, to No 11 Broadway. This 22-storey granite building with heavy brass doors was once the headquarters of the White Star Line, owner of the Titanic. In 1912 its pink marble lobby was crowded with New Yorkers desperately seeking news of relatives. Now it is pervaded by a different kind of desperation.
During the rise of the Nasdaq, Internet and high-tech companies began moving into the 103year-old building, whose vaults still contain old steamship logs. It was neglected and run down, but had space and cheap rents, and its owners wired it up for fast Internet access.
Thorn Communications, an Internet service provider, was the first to arrive. Wealth-Hound, a dot.com investing company with the logo "portal to prosperity", filled an office with expensive furniture. Mail.com brought 30 people and quickly expanded to 300, occupying the whole sixth floor and part of four other floors. Web Factory moved into the third floor and began holding parties and art exhibitions on the 16th floor. Tempest Software, an online security company, redesigned the 16th floor with chrome spotlights and white cubicle walls.
By this time last year 60 Internet companies had filled 11 Broadway almost to capacity, rents had soared from $12 (#13) to $40 a square foot, and the new, young tenants were enjoying what one called a "wild ride".
Ed Bogen, president of a PR company that worked with dot.coms, moved in two years ago to the fifth floor. It was an exhilarating time, he told me, recalling how he would join dozens of "nerds" on Friday afternoons in mammoth computer games at the eighth-floor office of the computer applications company, Random Walk Computing. Bogen began holding informal bagel breakfasts for the website companies. "The first day I had 20 people in a very small conference room discussing their concerns - like how are we going to grow, or I'm worth $3 million in stock options on paper but I can't exercise them - these were some of the things you heard." Then the Nadsdaq Titanic began to sink. "People scaled down or left or failed, it was a massive crash," said Bogen. Wealth-Hound left, Web Factory went defunct.
Things became "terribly depressed" at Mail.com whose stock dropped from $29 to $1. Stockback, whose executives used to serve sausages and eggs to the staff, paid off 29 of its 66 workers in one day last November. The pricking of the dot.com bubble "completely jeopardised my PR business standing", said Bogen. "I was doing $160,000 per month and within four months I fell to $24,000 and as I had a payroll of about $60,000 dollars I had to lay seven folks off." While Bogen PR survived by developing a breakfast conference business, its owner no longer had sufficient staff to service some of its best clients. These included Vision Consulting International, a Dublin based e-business company with 100 employees in the US.
Vision Consulting, which counts Citibank and Warner Music Group among its US clients, is continuing to do well despite the doom and gloom, as it has moved on from the dot.com market to more established companies.
Some companies in 11 Broadway, like Randon Walk Computing, which is run by Joel Scotkin (one of the original "nerds"), are still doing well, and the founders of others got out in time, like Commissioner.com, a sports fantasy website, which they sold in 1999 for $31 million.
But some of the building's star performers no longer come to the telephone. "People really don't want to talk about it," said Bogen. "Everyone wants to talk about successes and they won't learn from the past unless they take the time to deal with failure.
"I went in pursuit of business. I did well. I certainly accepted it. And when we failed as a result of the changing economy I accepted that too. You know, it's not cancer, it's not AIDS, it's one bad venture."
