Business-software firms have also been getting a lot of investor attention. Most target industries are already rooted in the city -- think publishing, marketing, and finance. Compared with the media-content plays people had come to associate with the Alley, says Stuart Ellman, a general partner of RRE Ventures, "these sound much more boring." But if there's a lesson to be drawn from the Alley's adolescence, it's that excitement does not necessarily make for a great investment.

Ellman's enthusiasms lie in mundane application providers: "If you look carefully at the past year or so, there's been an explosion in business-infrastructure companies" right here in New York, where Fortune 500 headquarters are thick on the ground. "Sell the solutions for half a million to a million dollars, the client reaps $5 to $10 million in savings -- these are classic software businesses," he boasts. So RRE's been throwing chunks of its $350 million fund into start-ups as fast as ever in recent months. "It's a huge buying opportunity," says partner Jim Robinson IV. "We're aggressively doing deals."

Local RRE favorites include Capital Thinking, whose software automates the commercial-mortgage process (launched in April; four major clients, including J.P. Morgan, are already signed), and Notara, which makes applications that simplify brand management and licensing for customers like Tommy Hilfiger and the NFL.

Another business-infrastructure play, aimed straight at the publishing industry, should be dear to the hearts of managing editors everywhere: Outerforce's software manages assignments, contracts, and payments for freelance writers, photographers, designers, and researchers. Company founder (and former New York Times Digital exec) Jonathan Glick calls it "supply-chain management for content." Having raised enough money ($8.3 million in October) to get through 2001 comfortably, Outerforce has potential investors ready to pony up more.

Nor has the Alley's downturn wiped out commerce sites, content plays, or the true-believer entrepreneurs who dream them up -- the kind of people who would be starting companies on day two of a nuclear war. "Everyone told me it's the worst market in a long time even though VCs are sitting on a lot of money," shrugs David Sidman, who quit his job at John Wylie, the scientific-publishing house, to found Content Directions, which will develop digital-rights management systems. With the sort of enthusiasm that was supposed to have gone out of style in April, he gushes that "this was kind of a once-a-century situation -- it didn't feel risky to me." So far he's self-funding, but he's circulating his business plan far and wide. It's enough to give a Class of '95er a fit of nostalgia.

Those old-timers still have plenty of occasion to reflect wistfully on their bygone corporate youth: Plenty more layoffs await companies that grew too fast or never had a real path to profitability.

Yet the long-term picture looks bright. For the Alley's core constituency of design-and-build Web shops (Razorfish, Agency.com, and Organic on the high end, and countless boutique firms beneath them), the yeoman's labor of Web-ifying every business under the sun remains. Many shops are humming along with higher head counts than they had twelve months ago. "Any real business that has anything to sell or do still needs Internet-integration services," says Danny Scheman, a co-founder of Media Farm, a 25-person firm situated, in its West 20th Street loft, in the heart of the traditional Alley. "There's so much work."

Rae Rosen, a senior economist at the Federal Reserve Bank of New York, concurs, projecting that local demand for high-tech workers will continue to grow quickly "for at least the coming year." "The question is whether we can meet the demand," she cautions. "We're seeing a lot of people moving back to New York from within the U.S., particularly young people. Plus, international immigrants tend to be attracted here." Many Indian-born programmers, for example, elect to bring their skills to New York in part because of the enormous South Asian communities in Queens and New Jersey. More H1-B visas (which Congress recently approved) means more immigrants, which could well mean more coding muscle for the tristate area. The city is growing its own, too: According to Kathryn Wylde, cuny is offering more classes and granting more degrees in technical fields than ever before.

As New York's tech industry becomes less of a land grab and more of an actual profession, one type of employee who may have trouble finding work is the one who occupied the Alley's cubicles to begin with: the basically smart but unspecialized liberal-arts grad. "Being an Internet generalist can't fly anymore," says veteran Net strategist Carolina Reid. "It's more like 'This guy knows the plastics-manufacturing industry inside out' -- you need to become more expert in one area now. It's going to be a grayer, older crowd."

That sober observation may be the ultimate catch for the majority of Alleyites who never made (or lost) millions. There are still plenty of jobs, ideas, and dollars around. What's gone for good is the unchecked youthful utopianism -- the visions of dyeing your hair, playing with expensive gigatoys all day, and getting paid more than your lawyer cousin to do it.

The mystique is gone, too. In addition to introducing a new generation to the wonders of capital formation, the Net-stock runup focused ostrich-headed corporate America on all things digital. In a business fueled partly on Us-versus-Them, there is no Them anymore. These days, pretty much everyone Gets It.

In other words: The nineties Alley was right about the digital revolution, so the rest of the city assimilated. "Culturally, we're meeting our Old Economy clients in the middle," posits a production executive at a top publicly traded Web shop. "I used go into meetings and I'd be the wacky Web guy, with everyone else in suits. And now they've dressed down to our level. It's a little less fun for us, but everyone else has loosened up."

"There's still a lot of business," laments Reid. "There's just not a party anymore."

Related:

• Archive: “Features”
• Articles by Steve Bodow
• Table of Contents: Jan 1, 2001 issue of New York | Subscribe!