The nosedive among the dot-coms is having a major impact on the U.S. real estate sector. Market analysts are reporting that many landlords are now requiring 12 to 24 months of rent - in advance - before allowing dot-com companies to sign on and move in.

At the same time, some rapidly downsizing dot-coms are vacating the space they've been occupying. Some are leaving building owners holding the bag.

Internet companies have cut 5,400 jobs since December of 1999, according to a survey Chicago-based international outplacement firm Challenger, Gray & Christmas (www.challengergray.com). The cuts that the Challenger, Gray & Christmas survey documented came from 59 companies. Of that number, 31 percent went totally out of business.

And the fallout from the dot-com bust is far from over. In fact, many analysts are predicting that the e-conomy's painful evolution will outstrip the U.S. savings-and-loan crisis of the late 1980s,

Other Services Feel the Pain

Real estate, though, isn't the only sector that's getting buffeted about in the dot-com downturn. A host of other business services are feeling the pain. Among them are public relations firms. Some PR operations, feeling lucky, accepted now-worthless stock options instead of traditional fees. Others that employed more standard contracts are also hurting.

For example, when Toysmart.com closed, Andover, Mass-based PAN Communications, a PR e-business specialist, found itself holding a six-figure bill that's still unpaid, according to company officials. PAN Communications worked as Toysmart.com's PR agency for some three years before freezing the account after several months' worth of unpaid bills. Dot-coms that want to be PAN Communications clients now go through an exacting investigation. And those who pass muster still have to pay in advance for services.

Other e-biz service providers reeling in the face of the dot-coms' reversal of fortune, including San Francisco-based Scient (www.excedo.org), which provides consulting services and technology for the e-commerce sector. Scient recently saw its stock plummet by more than 14 percent after Banc of America Securities (BAS) downgraded it from "buy" to "market performer." The rationale for the downgrade? Accounts-receivable problems, BAS officials say.

Bigger than the S&L Crisis?

The real estate industry, though, looks like it may feel the biggest hurt from the dot-com debacle.

If the dot-com decline does, in fact, exceed the impact of the S&L crisis, it will certainly top a dubious standard. That late-'80s crisis came after the ill-advised flow of capital into a host of projects that the market didn't want. Ultimately, $400 billion of assets were sold off, most at bargain-basement prices. Even with the sell-off so, the estimated total cost of the S&L crisis came in at $80 billion.

The dot-com blitz has certainly stirred up a ton of capital that could be lost. In 1999, U.S. venture capitalists increased their investments in new companies -- many of them dot-coms -- by 152 percent, ringing up a total investment of $48 billion. That, though, looks like small change compared to total investment projections for 2000. Even with the recent dot-com spinout, U.S. venture capitalists this year will pour more than $100 billion into new companies, analysts estimate.

An End to Inflated RE Pricing?

For space users, though, all this turmoil may have a substantial silver lining. Analysts roundly agree that the dot-coms' proliferation has artificially inflated real estate prices in many U.S. markets.

The thinning of the ranks will likely begin to cool out many of the overheated prices. At the very least, it's likely to stop many markets' wild upward spirals in pricing. And the U.S. e-conomy's cautionary tale many provide some guidance to other nations in which cyberspace is verging on a breakout.

More Casualties Coming

Meanwhile, many e-centric operations are clearly reeling.

A recent release touting an upcoming report in "Computerworld" (www.computerworld.com), for example, notes, "As more and more dot-coms fall on hard times, insiders and ex-employees say the IT groups at those firms are frazzled -- running short on cash, time and skilled staff. Millions are spent on advertising instead of operations. The hours are long, but the time to make information technology decisions is short. The chaos leads to mistakes. And staff shortages only get worse when IT employees leave as financial trouble arrives."

The Computerworld report also offers some striking examples: "Pets.com, an online pet store hit by several outages, recently told the SEC that it lacks such IT basics as redundant systems and a formal disaster-recovery plan."

In 20/20 hindsight, at least, the Darwinian shakeout among the dot-coms seems predictable. The same sort of phenomenon proliferated in the wake of the automobile's invention. Car companies popped up like bunny rabbits. Few, though, popped up for the long term. The market, as always, sorted things out.

That retrospective logic, though, provides precious little comfort to those who are feeling the hurt from the dot-coms' depression.