In the late 1990s, the press announced the end of the "old" economy, and the rise of the "new" economy. The New Economy was based on the Internet and was called "e-business" or "e-commerce" to indicate that it relied heavily on the Internet to conduct business electronically. During these heady days, venture capital actively sought out new enterprises that used e-business as part of their business strategies, or as their entire business strategy. Fundamentals such as financial planning, marketing plans and even business plans were overlooked or discounted in the New Economy, and companies such as Amazon.com dominated the news with their astronomic profits made on initial public offerings. So-called naysayers pointed out that many of these new companies were failing to meet even the most basic financial requirementsùsuch as profitabilityùfor long-term success, but investment money continued to seek out the New Economy. Eventually, the bubble burst. Companies that had attracted venture capital but which had poorly thought-out business plans failed despite their reliance on the Internet. Increasingly, analysts began to view the Internet as a tool that could be used by traditional businesses as well as companies that were based on e-business alone, but everyone began to recognize that business fundamentals could not be overlooked just because goods and services were now being bought and sold on the Internet in additional to traditional supply channels. This research considers some of the key issues surrounding e-business, including legal issues, ethical issues, how one company managed to fail despite considerable financial backing, and the role that e-commerce played in one of the most spectacular recent corporate failuresùthe collapse of Enron.
Companies engaging in e-commerce must follow the same basic laws as so-called traditional companies. That is, they must assume a certain structureùcorporation, partnership, propriet...