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`We never invested in any dot-coms.' Sound familiar? That was the plaintive marketing slogan of the battered venture investment managers as they struggled through the terrible years from 2001 to 2003.

They were bewildered and forlorn, having squandered hundreds of millions of dollars on stupid investments. They had been swept up in the latest fads and hadn't seen the crash coming. Bereft of a working business model, all they had left was to splutter what they hadn't invested in, where they hadn't taken a beating.

And why hadn't they invested in dot-coms? Because they saw the writing on the computer screen? No, it was because the big money only came into the venture capital funds during 1999 and 2000 and they hadn't had a chance to sink it into Internet upstarts.

Instead, they invested in communications components, optics, Bluetooth - in short, in startups that remained fashionable throughout 2000, in startups that burned up cash far faster than any dot-com could, in startups whose values contracted at the same startling speed.

But three years after the great dot.com shakeup that crushed 90 percent of the companies and turned Internet business into a synonym for stupidity and cupidity, something remarkable has transpired. Three of the biggest up-and-comers of the last decade are pure dot-coms - venture-backed companies that do nothing but run a website.

They make no chips, semiconductors or potatoes. They have no product you can touch or taste. They have no property and don't even distribute a little code. All they have is an address on the world wide web that provides services to surfers.

Real-world figures

Google is the world's most successful search engine. Advertising provides most of its income. Established in 1998, the company is making $3.2 billion in revenues a year. For the first nine months of 2004, it reported net earnings of $195 million, after a $200 million charge for settling a lawsuit and another $200 million charge for expensing stock options. Google's capital cash flow from operations totaled $600 million. It has $1.8 billion in cash and is traded at a market cap of $50 billion.

eBay is the world's biggest electronic auction room. Most of its income comes from the fees it charges sellers. Launched in September 1995, it generates $3.2 billion in revenues a year. In the first nine months of 2004 it made $570 million net profit. With $2 billion cash, it is traded on Nasdaq at a market cap of $63 billion.

Yahoo! is the world's most successful portal. It makes its money from advertising, message boards, community and content services. Set up in 1994, its turnover runs at $3.6 billion a year. It netted $47 million in the first nine months of 2004, has $3 billion cash and its market value is $47 billion.

They are dot-coms, one and all, and reams have been written about this titanic trio, their successes, and the challenges they face. There are three common features that explain their success.

All were established by private investors, not by big businesses engaged in tangential fields. Google is the brainchild of two Stanford students, not of Microsoft, IBM or any other computer giant, however rich in know-how and resources.

eBay was established by a 28-year old programmer named Pierre Omidyar. Yahoo, whose business is not divorced from media, has no media companies among its founders, though Reuters did kick in some money at the outset.

These new companies did not try to copy business models for Internet. They viewed the web as a disruptive innovation, a new paradigm. Big software houses, traders and publishers couldn't think beyond their existing markets and customers, but the new companies created new markets from nowhere, using new business models.

The moment these startups became big, competition came and the challenges they faced became much like the challenges all big business faces. So the entrepreneurs realized they'd better move along and hand the management over to professionals. Google is now managed by Eric Schmidt, formerly the chief executive of Novell. Yahoo! is being run by Terry Semel, a former Disney man. And eBay is being managed by Meg Whitman, former of Procter & Gamble, Hasbro, and the Bain & Co consultancy.

Did you rediscover the charms of Internet, whether because of the above three giants or some small local startup that's making money? Here are four possible conclusions.

1. Look for new markets, new customers, new business models, not some copycat version of existing models for an existing market.

2. Figure out what the customers really need.

3. Veteran companies may not have much to offer startups, because they're preoccupied with surviving the present and are too fixed in their ways.

4. It isn't a story about Internet at all. It's a story about the entire business world undergoing a process of technological change.