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FDIC Closes Netbank, One of the First Online Banks 174

An anonymous reader writes "NetBank, one of the first internet banks in the country was closed by the FDIC on Friday. Being a loyal customer for 8 years, I am saddened that an institution that provided me with so much great service and a cool, hi tech way to conduct my financial transactions is shutting down. Seems that mortgage defaults are to blame: 'NetBank's closure marks the first bank to close since the recent U.S. housing boom deflated. Critics have said that weak underwriting standards have led to record number of homeowners entering the foreclosure process. But NetBank's rare Internet-based business strategy made it a unique financial institution and its problems aren't expected to mirror issues facing other mortgage lenders, analysts say.'"
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FDIC Closes Netbank, One of the First Online Banks

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  • OTS not FDIC (Score:5, Informative)

    by eipgam ( 945201 ) on Saturday September 29, 2007 @07:48AM (#20792487)
    It is the Office of Thrift Supervision that has closed NetBank, not FDIC: []
    • Not only is the Slashdot story wrong in that way, it is misleading in another way: "I am saddened that an institution that provided me with so much great service..." NetBank did not, however, have the best interest rates.

      GMAC Bank [] and HSBC Direct [] had higher rates than NetBank. [] is the site I used to find those two. is a poor quality resource for finding banks, in my opinion, but it is better than nothing. Does anyone know of a better site for shopping banks?
      • Re: (Score:3, Informative)

        by Nimey ( 114278 )
        Do you mean lower rates? I used to work at a "loan servicer" (and collections agency) and NetBank was one of our clients, at least for their car loans.

        Their target market, at the time (2005), was for people with good credit, say FICO 760 and better (don't remember the exact numbers). I seem to recall their interest rates were fairly low, at least compared to the other companies we serviced loans for.
        • Re: (Score:3, Informative)

          by Valafar ( 309028 )
          A FICO score of 760 isn't "good" it's great. 650-700 is B to B+ credit (generally one can qualify for a loan but your rates will not be optimum). The scale looks something like this:

          475 bottom of the barrel. If you want a loan, you're going to get eaten alive. (30% interest rates, etc.)
          525 - 475 your credit really sucks. Like above, though you risk is considered somewhat less. 20-25% interest rates.
          600 - 525 Credit isn't in good shape, but you can qualify. Interest rates will be high, (20% on average)
          • "Sorry about the adhoc tutorial on credit."

            Don't be sorry. It's excellent.

            MOD PARENT UP!
          • I've usually had a through-the-roof credit score--when we bought the van, it was the second highest that the internet sales manager had *ever* seen (and the other wasn't when involved in cars). Until we bought that van, I had zero debt other than student loans, and a credit score way past 800. As an assistant professor.

            I don't quite make three times as much now, but I have a rather substantial amount of revolving credit and another car loan (the van paid off 2 years ago). That debt, though, is at rates r
    • by fm6 ( 162816 )
      To those who are wondering, "what happened to the FDIC?": The FDIC supervises regular banks. NetBank was a "thrift" a weird institution that appeared when the Reagan administration deregulated banking, allowing depositor-owned savings and loan associations [] to convert to a sort of commercial bank that specializes in mortgages. Thrifts have a long history of getting in over their heads [], and creating real estate "booms" that price most people out of the home market. But a lot of folks got rich o
      • by hawk ( 1151 )

        No, that's not right.

        S&L's had shareholders prior to regulation. It's credit unions that were and are depositor owned. (The *very* early S&L's were in fact owned by the depositors--they pooled money so that one at a time could buy a house).

        The change in S&L's was that the mortgage-lending limitation was dropped. In fact, substantially all of their limits were dropped, and they were for all intents and purposes banks with a different regulator. They were utterly unprepared for this, and
        • by fm6 ( 162816 )
          Dude, check out the Britannica link I provided. They were called Savings and Loan Associations for a reason.

          When I opened my first bank account (a very long time ago) it was at an S & L. I had to sign a form saying that the directors could vote for themselves on my behalf, unless I actually came to the depositor's meetings.
          • by hawk ( 1151 )
            Yes, check you link, particularly the sections that say "Formerly cooperative institutions" and and "Under a ruling of the Federal Home Loan Bank Board, which regulates federally chartered savings and loan associations, associations need not rely only on individual deposits for funds. They can borrow from other financial institutions and market mortgage-backed securities, money market certificates, and stock."

            • by fm6 ( 162816 )
              (Sigh.) I said that S&L's used to be cooperatives, you disputed that. If you can't even keep track of your own opinions, why should I waste any more time talking to you?
    • Why did all of the NetBank deposits go to ING?
  • by Anonymous Coward on Saturday September 29, 2007 @07:55AM (#20792501)
    Yep, It's a bubble and some people are going lose their shirts.

    "It's a great time to buy a house."

    "You'll never lose money in real estate".

    "Real Estate is a great investment".

    "Sone else is bidding on the property".

    Bottom line is with stagnant median income, people just can't afford a house. The real estate sector, after an unprecidented run up, is undergoing correction and it will be long and will take some people under. If you're renting or can afford your mortgage, you'll do okay. Every else might as well mail in the keys. If the debt is to netbank, send the jingle mail to ING direct instead. This is the downside of mass immigration and easy money, people. Time to buck up!

  • Wait, what? (Score:2, Funny)

    by Anonymous Coward
    Banks are being closed in the US? Good grief. Here we are worrying about Northern Rock having a bit of a wobble and the US is closing banks!

    Nice work on decimating your economy!
    • Aw, hell. Here in NZ we've sent seven finance companies into bankruptcy.

      Beat THAT!

      (No banks yet, and none of them appear to be in any trouble).
  • weak underwriting standards have led to record number of homeowners entering the foreclosure process

    I've never understood the wildly inflated home prices in some areas. Assuming that these are "market prices" and not crazy owners' wished-for buyouts, at some point no one will be able to afford to own a home.

    What happens then? A house market crash?

    The only people that win from high real estate prices are those that cash-in and move somewhere cheaper, the lenders (usually) and the agents.
    • Everything is driven by supply and demand. In the case of the housing market, weak lending practices created a demand much greater than the market would support under normal conditions. It's not hard to predict that the market would eventually catch up to this.

      If you just bought a house, your pretty much screwed, unless you plan to stay where you are for the next 20-30 years. Prices will likely drop over the next 2 years or so depending on your market. If you have to sell, you will have a mortgage larger th
      • Depends on the market and whether local salaries can support local housing prices. Take NYC -- housing prices continue to rise significantly despire all the market troubles? Why? - Because the average banker (there are thousands of them) can make $350k these days, at that point, an $850k studio makes perfect sense. - Because when two bankers, each making even a modest $120k get married, their combined buying power easily affords them a $1M 1B apartment - Because the worthless dollar allows Brits and Euro
      • Re: (Score:3, Insightful)

        by Raenex ( 947668 )

        I think its unlikely we will see an equivalent housing boom again. Unless banks and mortgage lenders don't learn from their mistakes.
        This is said after every boom and bust, and during the next boom they say "this time is different because..." I remember the Savings and Loans [] scandal from the 1980s. This current debacle is looking awfully familiar.
    • by dbIII ( 701233 )

      I've never understood the wildly inflated home prices in some areas

      I've never understood why it happens over and over. The current thing has nothing on New Orleans in the 1850s (or thereabouts) - but still ...

  • by 4thAce ( 456825 ) on Saturday September 29, 2007 @08:03AM (#20792535) Homepage
    Here is the link on the ING site [].

    The acquisition further strengthens ING DIRECT's position as the leading direct bank which aims to meet the financial needs of "Main Street, USA."
    I hope their lending requirements are a little more solid (I hold an Electric Orange account there).
    • It would seem so (Score:5, Interesting)

      by Sycraft-fu ( 314770 ) on Saturday September 29, 2007 @08:49AM (#20792665)
      ING Group is pretty major, I don't think they are going under any time soon (ING Direct is one of their divisions). However if it does, you needn't worry as mentioned this is what FIDC insurance is for. Up to $100,000 of your deposit is covered by the FDIC. So unless you've got more than that in there, you are fine. If you do have more, may I suggest you seek the services of a financial consultant, as that is too much money to just leave sit in a bank account, even one with a reasonable interest rate.
      • by mosch ( 204 )
        NetBank offered small business banking services, where this problem is more likely to hit.

        It's damned easy for a small business to be acting responsibly while having balances that are well over $100k in their checking accounts.
    • Re: (Score:3, Interesting)

      by tburkhol ( 121842 )
      I hope [ING's] lending requirements are a little more solid (I hold an Electric Orange account there).

      ING only bought the deposit accounts. Most of NetBank's mortgages are going to Everbank, apparently with the bad one staying with FDIC until they can find a sucker^wbuyer. In any event, deposits at NetBank are insured, so few account holders will lose money (the exceptions being about 1500 people who had more than $100,000 on deposit.

      The FDIC has a whole list of failed banks []. Apparently, it happen
      • You're fooling yourself if you think that FDIC insured is going to be worth more than two squirts of piss when the day comes that ING fails. If a depression or stagflation take it down, that $100,000 likely won't buy you a loaf of bread based on current circumstances.

        I'm not trying to chicken little here, I'm just trying to say that "If something could take ING (and similiar banks) down, that something is going to have widespread effects on many, many, more things".
        • I don't really see why you are so concerned. If a major bank fails, FDIC liabilities would almost surely be under 300 billion. And we finance 300 billion in bonds every year anyway, without much effect on inflation.
          • I don't really see why you are so concerned. If a major bank fails, FDIC liabilities would almost surely be under 300 billion. And we finance 300 billion in bonds every year anyway, without much effect on inflation.
            Your right, the FDIC will be able handle a single major bank failure. Multiple bank failures and it wont be able to.
  • FTA:

    NetBank's stock price traded around $15 a share in 2004, but it declined and then fell below $5 a share in early 2007. Shares of NetBank fell to $0.07, down $0.01, on Friday.
    Damn that pesky old real world!
  • It looks like 1500 people had $109 million over the 100K FDIC insurance limit - an average of about $73K - so they'll probably lose it. Many of these will probably be small amounts, say accumulated interest on $100K deposits; at other extreme, there a likely an unfortunate few who will be in very bad shape, essentially having lost most of their life savings, if they put all their eggs in this one basket.

    Most banks do not try to discourage deposits more than $100K. I recall seeing offers of jumbo CDs sta

    • by Rich0 ( 548339 )
      Yup - why anybody would deposit more than $100k in a bank account is beyond me. Banks pay horrible interest - they're only useful for day-to-day liquid activities without large balance requirements, and due to the fact that in the US they're insured up to $100k.

      If you have more than that you're much better-off investing in a mutual fund of some sort. Even if it is just a money-market fund. Most of those at least have private insurance - it won't protect you if the stock market completely crashes, but it
      • Shameless plug, as I built most of their tech architecture :-) -- check out Promontory Interfinancial Group's CDARS program. These guys take a regular bank's CD program and extend the FDIC coverage to $50M or more. The rates are basically the same and often higher.
        • I don't know if they actually take the CDs, but many banks also participate in the CDARs program. There's a good chance that the bank that you are using participates and can get you a fully insured CD greater than $100K.

          If I remember right, the head guy for the Promontory outfit is a former head of the FDIC, and the program will do what it says that it does.
          • by SRA8 ( 859587 )
            Yes, Promontory is run by a bunch of ex Administration heads (OCC, FDIC, Fed, etc.) There are about a thousand banks that participate. The place I was working at was the back-end, they do all the logistics for the participant banks.
            • We participate. I think it's a great idea for skirting the FDIC limits for those who need to do so and it is good for the banks to keep the customer's full relationship - a win-win situation.
      • Yup - why anybody would deposit more than $100k in a bank account is beyond me.
        Well, I can think of many reasons why one would deposit more than $100k in a bank. For the most obvious, google "1031".
    • Re: (Score:3, Informative)

      by gunnk ( 463227 )
      It may be worse than that: the FDIC insurance applies to checking and savings accounts, but not money market accounts. Money market account holders can get in line with other creditors during the bankruptcy proceedings. Moral of the story: if you have a money market account, make sure you know the financial health of your bank.

      (Note that credit unions are insured separately by a different organization, so money market accounts there may be covered.)
      • Re:FDIC insurance (Score:5, Interesting)

        by Rich0 ( 548339 ) on Saturday September 29, 2007 @09:23AM (#20792827) Homepage
        It largely depends. Many banks have "money market" accounts that are classified as savings accounts as far as the FDIC is concerned and are insured. Many money market accounts are in fact uninsured as well.

        Netbank had a "money market" account which was FDIC insured - at least as far as I'm aware (and I did take the time to find out).

        I'm guessing it comes down to whether the bank wanted to follow FDIC rules regarding investments/limits/reserves/etc. Most money market mutual funds don't - but they're still very safe due to their investment profile. Also - most non-FDIC-insured money market funds tend to be privately insured against anything but investment risk.

        Bottom line is - anybody with any kind of account no matter what it is called or where it is held should be aware of its FDIC-insurance status. Many banks have both insured and non-insured investment products.
        • Netbank had a "money market" account which was FDIC insured

          Parent is correct. I have a Netbank (now ING) 'Money Market' account that I started about a month ago. I was very concerned so I called the FDIC via the number they have published on the Netbank information sites and was assured that it was insured and all my funds would still be available.

          The Netbank site is now back online, and you can get back in and see your accounts again. The big question for me, especially with the first of the Month on Monday, is what is happening with all my Bill Pay transac

          • by nhaines ( 622289 )
            I checked into this, too (although I was quite relieved that I tend to pay my credit cards a couple days after I receive the statements, and not just before the due dates, so I'm covered for another month).

            Any electronic bill transactions will be held until Sunday, but all direct deposits will be automatically transferred and electronic transactions will resume Sunday evening. As far as I can tell, there should be no interruption--we'll even continue using the NetBank website for the next couple of months.
          • Netbank customer since at least 2000. As of 18:45 EST, I still cannot access the Netbank website. Well at 18:50 I can, but read-only. Suckage. Complete surprise to me.
      • Note that credit unions are insured separately by a different organization, so money market accounts there may be covered.

        The federal insurance program which insures credit unions is essentially the same as the FDIC insurance program.

        However, for some reason, only credit unions seek out secondary private insurance (at least, I know of no bank that has the secondary insurance.) My credit union has secondary insurance (from these people []) that adds $250k to the $100k to make $350k, and it will work for money
    • One small nit -- they're only GUARANTEED to 100k. In practice I believe they've always covered accounts fully. That makes sense, if your goal is to promote public confidence, while leaving yourself an exit if a major bank fails.
      • by hawk ( 1151 )
        Nope. For a while there was the "too big to fail" doctrine, in which the economic effects (particularly secondary failures) were considered in bailing out past the limits (Bail out this one for an extra $10M instead of coughing up $50M as later ones failed).

        Then the "racial" effects were noted--small black banks with excess deposits (Bank of Harlem?) for payroll weren't covered. And then there was the moral hazard and competitive problems with people realizing that big enough banks couldn't fail and that
    • VIII. Dividend Information
      Due to the projected sale of assets of the former bank, the FDIC is in the position to provide each uninsured depositor with an dividend equal to 50% of your uninsured amount. These funds will be deposited directly into your account net of your uninsured portion.
      Dividend Information on Failed Financial Institutions contains general information about the dividend process. []

    • They will not automatically lose all uninsured funds. You will see that the FDIC has already authorized payment for 50% of the uninsured funds out of the expected proceeds from the sale of the loan assets. (The deposits were purchased by ING, but not the loans.) The FDIC also states that they expect further dividends beyond the 50% will be made available as things wind down.

      While the folks with uninsured assets will lose a bit, it won't be the end of the world.

  • Mortgage defaults (Score:3, Insightful)

    by DerekLyons ( 302214 ) <> on Saturday September 29, 2007 @09:49AM (#20792975) Homepage
    The defaults aren't something that 'just happened' to them - they chose to get involved in what anyone should have seen as being an extremely risky market. (Buying mortgage paper on the secondary market.) But the ultimate culprits are the (all but unregulated) mortgage companies, who loan the money then promptly sell the paper - they've taken their money and profit and are walking away virtually scott free from this developing crisis.
    • by Rich0 ( 548339 )
      But the ultimate culprits are the (all but unregulated) mortgage companies, who loan the money then promptly sell the paper - they've taken their money and profit and are walking away virtually scott free from this developing crisis.

      I dunno - they wouldn't do it if people didn't buy the paper.

      Suppose I find ten homeless people and loan them $100 each, and then sell those loans to somebody for $1100 - netting $100 in the process? As long as I was honest about what I was selling, have I done anything wrong?
      • The real culprits are people who buy loans without any care for whether the debtors can make the payments.

        Not exactly. A lot of the MBSes were rated as investment grade by the ratings agencies, who share a lot of the blame. The MBS purchasers' mistake was to buy something that was too good to be true. When you're playing poker and you cannot figure out who the mark is, you're the mark.

  • Alternatives (Score:2, Interesting)

    by supertall ( 1163993 )
    I've enjoyed using Netbank for several years now, and as someone who moves around a lot having a branchless bank equally accessible from anywhere in the country has been nice. They even have (had) ATMs here in B.F. Mississippi. I'm sad to see them go.

    Are there similar alternatives to Netbank that anyone would recommend?
    • I went with USAA. (Score:3, Interesting)

      by Kadin2048 ( 468275 ) *
      For reasons that had nothing to do with any intuition of an impending collapse (I was actually most annoyed that they didn't play nicely with Mac Quicken), I moved all my deposits from NetBank to USAA a few months ago. I've been very happy with USAA; they offer more online features and a better website UI than NetBank did, excellent customer service, and ATM-fee reimbursement (up to $10/mo or so). Their interest rates on checking aren't quite as high, but that's a small price to pay, particularly since it s
    • I was getting nostalgic recently since I used to work for NextCard, and was wondering how the other online banks were doing like NetBank and VirtualBank... and was surprised they were both still in business. I was also checking on other online banks.

      Anyway, I think E*Trade is probably the best one out there. If you have direct deposit, you can set up a Max-Rate Checking account and won't have to worry about paying any fee if your balance is too low. They give you 0.5% APY for balances under $5000, and I
  • by chroma ( 33185 )
    I signed up for an account with them a couple years back and they socked me with several hundred dollars in fees within the first month. Good riddance.
    • Re: (Score:3, Informative)

      by Rich0 ( 548339 )
      You neglect to mention why. Netbank doesn't have minimum balance fees or anyting onerous in general, although if you open an account with $100 and proceed to write 75 checks for $1000 each you would easily run into the scenario you describe at any bank.

      Netbank grew so big by being one of the few banks that DIDN'T charge fees for anything and everything. Generally the only thing they charged fees for was stuff that you'd expect - frequent withdrawls on a money market account, overdrafts, etc. This stuff i
      • by chroma ( 33185 )
        At this point, it's a dead horse. E-mail if you want details.
  • I mean, mostly I care because its a bank failure in general. I don't care any more or less because it's 'OMG ONLINE BANK WOW'. And of course, you would expect some banks to fail here and there right now: a lot of them made poor lending decisions and deserve the consequences. The good news is we've learned from previous bank failures and now at least most customers won't be out anything.

    If you really want an online bank every major bank offers online banking. Some have more features than others, but there ar
  • Wow, guess I got out just in time. I pulled my money out of there a couple months ago, closed the account, and moved it into EverBank []. When I signed up for NetBank in 2004, they had one of the most competitive interest rates for checking accounts available (according to []). However, as time went on I noticed there were more and more online banks that had better deals. I suppose it wouldn't have been too bad, it looks like all of NetBank's customers automatically are getting transferred to ING []
    • Re: (Score:2, Informative)

      by DavidTC ( 10147 )

      Even if they weren't moving them, saving and checking accounts are insured up to $100,000 in the US.

      Although treat that as per-bank, not per-account.

  • I have been a happy NetBank customer for over five years now. Really good customer support, no fees on basically anything. I only did checking and savings account, and it is a shame that a bad housing market brought all of it down, but that is the way it goes.

    I move around a lot, and with direct deposit I never felt the need for a brick-and-morter bank to ever go to. It never made sense for me to pay for the buildings that I was never using. NetBank also had some innovative features to make things easier li
    • by i)ave ( 716746 )
      I've been using SalemFive [] for four months now and have been wildly impressed. My "eONE checking account" had no setup fees, has no minimum acccount balance, they pay me 5.00% interest compounded daily and credited monthly, they REIMBURSE ATM FEES up to $20/mo. (I believe this is the figure, I've never exceeded the amount)and they even gave me my first 25 checks free. I keep thinking this is too good to be true and soon something will change, but I'll be damned if it hasn't been simply
    • Sorry, the link I gave you is to their main banking page, in order to sign up for an eONE account, you need to use this link []


    • by mosch ( 204 )
      For what it's worth most of NetBank's features are available elsewhere. My USAA account also includes the "deposit via UPS" envelopes, and some niceties like the ability to deposit a check by scanning it.

      I feel very fortunate that my experience with NetBank's customer service was extremely unpleasant. So unpleasant, in fact, that I never funded the small business account I opened with them.

      They had some serious bugs in their software that prevented me from initiating an ACH to fund my account. When I ask
    • I guess experiences and viewpoints differ.

      I got an account with them a few years ago. They had the worst service I've ever seen in a bank... and I've seen pretty bad. The attitude was also clearly that they didn't care. I closed my account after just a few months.
  • by Ray Radlein ( 711289 ) on Saturday September 29, 2007 @02:48PM (#20795017) Homepage
    My wife used to work for Netbank, at their HQ here in Atlanta.

    After her previous company downsized, she talked to Netbank about a job; her first in-person interview was scheduled for September 11, 2001. Oooops. We saw the second tower hit live on the Today show right before she left; once she got there, the nation's entire financial industry went into lockdown, and she spent the whole day sitting in the lobby of their offices. Heh. Was that some kind of omen?

    Anyway, she got the job, and went to work doing business analysis -- which promotions actually drew in new customers, what percentage of new customers retained their accounts, et cetera; she also maintained the list of ATMs that were in service and in their network; and was responsible for generating the customer lists for both the various e-mail contacts and the annual privacy policy mailings ( <geek_meat> SAS and SQL, mostly </geek_meat> ).

    She really liked her job, and she liked her co-workers.

    The turning point for Netbank, IMHO, came after the retirement of one of its founders and a merger with another online bank called RBMG which was located in Columbia, SC (which is, ironically, where we lived before we moved to Atlanta years ago). There were the usual issues of corporate culture which arise during mergers; there were issues regarding differing customer expectations (she ran studies on customer surveys which showed dramatically different attitudes, expectations, and opinions between customers from RBMG and customers from Netbank); there were issues arising from the fact that, although the company retained its Netbank name and identity (and the deal was structured as a Netbank acquisition of RBMG), the center of gravity for the new company was in Columbia, with the former RBMG; and, frankly (again, IMHO), there were issues with RBMG's upper management and corporate strategy.

    Netbank "Classic" had been focussed on, and content with, being, well, a bank. Checking and savings, CDs and Money Markets; you know the drill. RBMG, though, had aspirations both grander and farther afield, starting with mortgages (in fact, the "MG" in "RBMG" stood for "Mortgage Group").

    That didn't work out too terribly well.

    By last year, there were some signs of strain. While the overwhelming majority of folks working in Atlanta and Columbia (and Jacksonville) were really great, and on the ball, there was a bit of a corporate malaise; RBMG ran what seemed to me to be a less employee-friendly operation (one of the first things they did, for instance, was move Netbank's Atlanta HQ from its basic "A" or "B" office space into a semi-crappy converted former retail space which was, at best, a high "C" quality office space). The bad vibe was subtle at first, but it was certainly there; and as the mortgage business began sucking more and more, money got tighter and tighter, and things got less and less functional.

    Finally, as last year began to wind down, more and more employees started to jump ship from my wife's group. Eventually, it got to the point where she was more or less forced to jump ship, simply because everyone else already had, and she would be left in department that couldn't possibly do all of the things it was expected to.

    By the time she left, right at the end of the year, there was a really grim air about the place; and we got to look on in horror this year as her company stock shares rapidly declined in value to the point where it wasn't even worth bothering to sell them.

    We still have a Netbank account with a small amount of money in it, and a lingering bittersweet fondness for the brand and the people who worked for it; but we're certainly not regretting her decision to leave, that's for sure.

  • I've been a NetBank customer for the past few years, and have had decent service from them (though the interest rates on their checking and money market accounts really tanked in the last couple of years). My dad's company had a business account there, however, that turned out to be a nightmare.

    When my dad passed away unexpectedly in February, I had to get access to the company's bank accounts. Unfortunately, he was the only signer on the account. It took six months for them to give me access to the money (
  • NetBank's closure marks the first bank to close since the recent U.S. housing boom deflated.

    Other banks have already closed because the owned too many rotten mortgages, including (for example) Greenpoint Mortgage []. Greenpoint was owned by a larger, full-service bank, but that distinction wasn't made in this article. As usual, journalists like to portray Internet business as unusual, fly-by-night, and inherently risky in a way that non-Internet businesses of the same kind somehow are not.

Thus spake the master programmer: "When a program is being tested, it is too late to make design changes." -- Geoffrey James, "The Tao of Programming"