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Had Philip Kaplan checked his e-mail in the early afternoon of June 14, news that online retailer Emusic.com had closed its 40-person Los Angeles office and laid off all but four of its New York employees might have broken hours before it was reported by several wire services. Kaplan, who is the creator of F--kedCompany.com, a new Web site that makes a game of predicting the demise of dot-coms, had received a message detailing the Emusic downsizing, apparently from someone at the company. More than spreading the news, however, Kaplan's informant was trying to win points: The tidbit earned the sender -- and anyone else who predicted Emusic's decline -- a high score in Kaplan's game.
With daily headlines chronicling the excessive spending, clueless management, and weightless business plans of Internet startups, it doesn't take a Bill Gates to predict that many more Web businesses will soon be laid to rest. So it probably stands to reason that a site would be created to cash in on the carnage. But who knew that one with such a needlessly offensive name would become so popular so fast?
Launched on May 30, Kaplan's site has already registered 70,000-plus game players -- 33,000 of them in just one day. Kaplan, 24, says the majority of them work for Internet startups, and many of the few thousand who have corresponded with him have predicted the imminent collapse of their own employers. The site's also attracting players from major companies such as PricewaterhouseCoopers, Razorfish, and Scient. More important, it's giving voice to a recent and rarely expressed cynicism engendered by the difficulties facing Net companies. "People who work for dot-coms are definitely getting more disgruntled," Kaplan says. "They're like gophers in their cubicles poking their heads out every now and then and asking, 'Are we still in business?' Then suddenly they realize they're f--ked."
AFTER-HOURS HOBBY.
The premise of the game is simple: Pick five public or private companies each week that you think are most likely to eat dirt -- then wait for it to happen, and for your points to add up. Kaplan goes through the site's e-mail himself -- more than 200 messages a day -- and awards up to 200 points based on such subjective criteria as the severity of the news and the number of people who have put a particular company on their list. The worst news on companies chosen by the fewest people garners the most points. The Emusic posting, for example, merited 169 points. The closing of CDNow's European operations netted 191 points for people who had the crippled music retailer on their list of unfortunates. (CDNow currently holds the No. 1 spot on Kaplan's site in a list of dot-coms visitors have singled it out as most likely to fail.)
Kaplan, who owns a five-person Web-design firm in New York City, built the site in two days and says he judges news as much by how it will affect a company's employees in the near term as by what it means for the company overall. "Originally, I just wanted to take the headline of the day, which is 'Failed Dot-Coms,' and turn it into a game," Kaplan says. "But it has become a game that's also a news source." For now, Kaplan says the site is just an after-hours hobby and a way to promote his own company, PK Interactive.
More and more of the information he gets comes from insiders, Kaplan says, and a lot of it he sees before it breaks elsewhere. On average, he estimates that about 25% of the e-mails he gets daily are rumors from within companies. He keeps most of such material in a hidden archive, posting 10% or so on the site for the public to see. "Some of the stuff is just too far out there," he says. "It's just too damaging and sensitive to put up without knowing for sure whether it's true." For the material he does post, Kaplan encourages players to send links to news sources as a way for him to verify the validity of the information. Otherwise, he lists it as a rumor.
"GROWING CYNICISM."
There are plenty of places in cyberspace where people can vent their frustrations: chat rooms, bulletin boards, and entire sites set up to bash specific companies -- such as AOLsucks.com. But Kaplan's site takes this to a new level, says independent technology consultant Jason Monberg. "The fact that the site deals with really sensitive information, and that people are making fun of companies at their own expense, [spotlights] the disillusionment and growing cynicism" in the startup world, Monberg adds. The site mocks the idea held by "everyone from investors to employees [that] they could build huge companies really fast with no experience," he adds.
Kaplan's site isn't the only one keeping track of the bloody dot-com battlefield. E-business publication The Industry Standard has created an area on its site that features details of layoffs and canceled IPOs, plus another that lists defunct companies. And Kaplan's roommate has created a site called DotComFailures.com, which, Kaplan claims, grabs most of its content from his site.
Visitors to Kaplan's site are even hanging their CEOs out to dry. Recently, they were privy to an e-mail sent by MyLackey.com Chairman and Chief Financial Officer Brendan Barnicle to his Seattle staff. Titled "This is Still a Startup," the memo chastised Barnicle's own lackeys for leaving the office before 6:45 p.m. and officially set office hours of 8 a.m. to 7 p.m., with a half-hour lunch break. "If anyone thinks that everything we need to do as a company can be accomplished within an eight-hour day, then I think they fail to understand the scope and complexity of our venture," Barnicle wrote. "Anyone harboring such illusions should seriously consider a career change." Kaplan awarded the posting 125 points. A spokeswoman for MyLackey.com confirms that the e-mail did come from Barnicle, but says Kaplan's posting of it had been "corrupted in some places." She won't elaborate on what that means.
LIBEL EXPOSURE.
If he isn't careful, though, Kaplan could end up defending his site -- and himself -- in court. Even clearly identifying information as rumor won't protect him against a libel suit if the rumor turns out to be false. "He runs the same risks as gossip columnists," says Floyd Abrams, a partner with the New York law firm Cahill Gordon & Reindel, and a preeminent First Amendment attorney. "It's helpful that he characterizes a potential inaccuracy as a rumor, but it is by no means a complete defense." Most gossip columnists avoid such risks by identifying their subjects in general terms, rather than revealing names, Abrams says.
Kaplan has already learned that it's sometimes smart to be discreet. For instance, he recently removed one posting that accused a dot-com CEO of boozing it up with prostitutes. "He called once and I ignored it. But by the third call he was threatening legal action, and I just decided it wasn't worth the trouble," Kaplan says. "Besides, it was really embarrassing stuff about a particular person instead of a whole company, and I'm not out to get anyone in trouble with their family, or ruin their life, or anything like that.
"Abrams notes that if Kaplan were to become the defendant in a libel suit, he could be forced to reveal the e-mail addresses and identities of his sources. What's more, Abrams says, respected publications such as The Wall Street Journal have been sued for copyright infringement after reprinting the internal memos of companies. "A lot of people who use the Net have no idea they're at any legal risk at all," Abrams adds. Companies have even pressured Internet service providers, which have been granted immunity from libel for their subscribers' actions, to hand over the names of people who have revealed damaging inside information in chat rooms or e-mails.
At the same time, though, a company that brings a libel suit must also subject itself to a full investigation. "It forces a company to open its books in order to get to the nature of the truth," Abrams says. "For some of them, it can wind up a lot worse than just having a comic Web site attack their company."
"DOT-PROLETARIAT."
Author and new-media theorist Douglas Rushkoff applauds Kaplan's site and calls it "a voice of the dot-proletariat." Describing it as a hybrid between online muckraker Matt Drudge and game site Hollywood Stock Exchange, where players predict movies' box-office sales, Rushkoff says the site has both "a viral quality and an underground, unmuzzled voice-box quality" that's refreshing in the dot-com world. "We're seeing a new kind of worker anger," he says. "It wasn't until the recent crash that people let themselves believe the truth. Now they feel just as let down as the investors, but they also feel stuck.
"Kaplan, meanwhile, feels anything but constrained."First of all, the site is a joke, and second of all, most of the information is pretty solid," he says. Although players currently don't win a thing, a number of companies are willing to sponsor the site. Starting on July 1, Kaplan says, he'll award monthly prizes and by July 5, hopes to launch the Kaplan Index, based on statistics and charts created from some of the data he has collected.
To be sure, F--kedCompany could eventually meet the fate suffered by the Net outfits it taunts. In the meantime, though, Kaplan plans to enjoy the ride. "If only all the companies talked about on my site had the traffic I'm getting," he says. "Maybe then they wouldn't be so f--ked."
Copyright 2000 , by The McGraw-Hill Companies Inc. All rights reserved.
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