We've all heard the news as the meltdown of the real estate dot com industry continues. With the recent drops in the Nasdaq and the subsequent drying up of venture capital, the number of companies that are in trouble is widespread. The latest upswings resulting from Fed rate cuts are either too little or too late to rescue most of the victims.

There have been a number of reported site shutdowns including Mortgage.com, OnLoan.com, and ExploreRealty.com. Plus there have been widespread layoffs at companies like iPix.com, PropertyFirst.com and eHome.com. To top it all off, other companies have ceased offering loans altogether.

Yikes! With over 2000 layoffs and more to come, the real estate industry on the Internet is creating a sense of doom. But, should it? What are the impacts on individual site owners and what should a real estate professional do given that the overall financial climate and the fact that many dot coms are either reinventing themselves to survive or not surviving at all?

What ever happened to Unlimited Hype?
The general consensus is that the Internet Revolution is not only real but that it is approaching at a tremendous rate. This is not just the hype of the recently "Nasdaq listed" but is the truth of our times. The problem is that the hype that developed translated itself into the false belief amongst investors that the current state of Internet development was sufficient to underpin the tremendous growth of the dot coms.

The market euphoria that developed helped propel companies with no earnings and substantial losses into the stratosphere which then propelled even more growth and euphoria. At the heart of the growth are the venture capitalists who provided the easy money that was required to fuel the growth.

With initial financings of well over $25 million dollars or more, many of the dot coms operated under the illusion of being a substantive entity. With such large budgets, enormous staffs were hired, advertising budgets ballooned and traffic to those sites swelled.

Unfortunately, when investors finally looked at the numbers, the justifications for present pricing were just not evident. What has followed is the drying up of venture capital and/or the ability of companies to go back to the market to obtain money to fuel their continued growth (or even maintain it in most cases). Without growth or traffic, lower values, lower values equals less capital, less capital equals less traffic and so on.

This is, of course, a fairly simplistic notion of what has happened. The question is, then, where does this leave real estate professionals?

The Meaning to the Real Estate Industry
We can decide to focus on all the negative aspects of these latest developments or you can take what is likely the logical position. Clearly, there will be fallout from the latest carnage. To name a few problems:

• Decreased consumer confidence in Internet companies may result in a lowering of confidence in all aspects of Internet use including real estate;
• The shutdown of a number of online mortgage comber of online mortgage companies may result in some problems with loans that were in the pipelines of those companies and decrease consumer confidence even more;
• Real estate professionals with links to sites that are self-destructing might see the confidence in their own sites at risk;
• Certain features and products may no longer be available to web site owners signaling a reduction in the services provided
• Advertising revenue shock to sites generating revenue through this source
• A slowdown in innovation for new products

These are just a few of the potential issues that may result from this latest crash. The question is how can you avoid or minimize some of the damages.

Survival Kit for the Real Estate Industry
There are a number of things that you, as an individual web site owner, can do to help minimize the potential fall out for your own site. You must remember that a number of the sites that you depend on for traffic, information, software, etc. may no longer exist or may be curtailing the services you depend on. Here is a short checklist of things you can do now to help yourself:

• Check all of the links on your own site to ensure that they are not directed to web sites that no longer exist or that no longer provide the services you need (eg. Mortgage.com)
• Review any information you provide or recommendations you make on your web site to ensure that it is still correct
• Review all of the affiliate programs you belong to and make sure that the company is still operating and that your payments are still accumulating
• Collect your affiliate income early. If you have not reached the minimum payment point for this month you may want to consider asking for the check anyway.
• Review your latest traffic numbers on a daily basis to ensure that a source of traffic hasn't disappeared
• If you use pay per click services, review all of your bids as some companies bidding below you may have stopped their bids allowing you to reduce your bid and stay in the same position
• Do not put more that the minimum into your pay per click account for the next 6 months or so. The potential loss of $25 makes more sense than the loss of $500
• If you advertise, make sure that the contract has a termination clause and that unused ad dollars are considered as trust money
• Stop paying for services 2 years in advance. Paying for services 6 months in advance or less protects you against a site shutdown.
• Read the copy on your site to ensure that you don't boast about the success of the real estate web industry. Your users are likely skeptical now so you have to make your site even more convincing.

There is no hard and fast rule as to which sites will survive. However, it is clear that the recent shakeout provides an opportunity for other sites that have not exceeded their limits. The companies with little or no debt and a good business model will survive; companies that don't will likely die a fast death.

Ron Thibeault is a retired real estate lawyer and contributing Editor to ThinkRelo.com. His extensive experience in real estate law gives him valuable insight into the needs of clients, realtors and all other players in real estate transactions.