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"I've had an entertainment heart since I was about 20." -- Barry Diller, chairman of USA Networks, announcing that Vivendi will buy the entertainment assets of his company Oh, how the mighty have fallen. Back in the heyday of the tech boom, Bill Gross, the 43-year-old entrepreneur who popularized Internet incubators, could do no wrong. He sold $1 billion worth of preferred stock to wealthy individuals and businesses such as Dell Computer and T. Rowe Price. He even brought in a blue-chip director, General Electric (GE) ex-Chair Jack Welch.

Now, his brainchild, Idealab, is in such a slump that those investors are hopping mad. They say Gross wasted $800 million of their money buying controlling stakes in duds, such as cosmetics e-tailer Eve.com. They claim Gross has ignored their pleas to liquidate Idealab and is instead offering to buy them out at a pittance--10 cents on the dollar, instead of the 35 cents they want. Says investor Guy Oseary, co-owner of pop singer Madonna's Maverick Records: "If he'd just liquidate, he'd make a lot of people happier."

Gross wouldn't comment. But Idealab President Marcia Goodstein says the company is trying to balance the interests of some investors who want out and others who want to stay in. "The market took a terrible turn, and they are angry," she says. "We share their frustration, and are now working hard to secure a return for all our shareholders."

The angry investors had hoped Welch would back them. But he resigned from most of his board positions in September. "I never made a nickel on Idealab," says Welch. And the unhappy investors? "Tell them to get good advisers." Wall Street investment banks are grappling with hundreds of class actions brought by disgruntled investors alleging everything from market manipulation to kickbacks from their initial public offerings. So is the $100 million that Credit Suisse First Boston is reportedly close to paying to settle federal charges that it mishandled IPOs really that steep?

-- It's a mere 22% of the $451 million in fees CSFB earned by underwriting tech companies in 2000, according to Thomson Financial.

-- It's roughly how much CSFB's tech-banking superstar Frank Quattrone earned every year in the late 1990s, according to those familiar with his salary and bonuses.

-- It's one-quarter as much as a settlement by just one family, the Pritzkers, who must pay $460 million to U.S. regulators to resolve claims in the July failure of Superior Bank FSB, which they half-owned.

Wall Street veterans say this shows the system is out of whack. "I am dismayed," says John Gutfreund, former Salomon Brothers CEO, dubbed the King of Wall Street by BusinessWeek in 1985, who resigned in 1991 following a Treasury-auction bidding scandal. "In their mind, it's probably a slap on the wrist." CSFB declined to comment. The Legacy of former CEO Jacques Nasser is still causing pain at Ford Motor (F). The company recently admitted it lost almost its entire $50 million investment in a venture firm, Internet Capital Group, which provides seed money for business-to-business e-commerce. Ford invested in December, 1999, when ICG shares were at $108--and back when investing in such things seemed like a good idea. Now it's dumping them for around $1.15 a share.

And that's not the only Internet idea backed by Nasser that hasn't panned out. Already, Ford has taken a $199 million charge to write down several investments in e-commerce and other ventures. Nasser had hoped to recast Ford as a cutting-edge e-commerce giant, but the core automotive business suffered, costing him his job.

Not surprisingly, new CEO William Clay Ford Jr. is preaching back-to-basics. While still embracing the Net as a way to become more efficient, he won't be investing in startups any time soon. The attacks slammed an economy that was already hurting. While some sectors are slowly getting back to normal, others are still depressed and may feel the impact for a long time. Here's a look at the fallout:


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