Onsite advertising is already covering GameColony’s $28,000 a month operating costs, and the company has recently launched tournaments with players from around the world paying to compete for prize money. (The fee-based tournaments were launched in July.) GameColony has 300,000 registered users in the United States, Europe and Asia. Players pony up an entry fee for each game, whether it’s checkers or gin, and the winner collects 80 percent of the kitty, leaving 20 percent for GameColony.

"I’m here to run a business," Shneyderman says. "We don’t view ourselves as an Internet company?we’re a gaming company. The Internet just happens to be a perfect venue. Other dotcoms raised millions in capital and the money was wasted. You can make money on the Internet if you don’t spend a lot in the first place."

Take that, Mr. First-Mover Advantage

While it’s now clear that most online business models were fated to fail (even Amazon.com, the avatar for all things B2C, had not as of June shown a profit), a group of consumer sites on the Internet, including GameColony.com, have been quietly counting their profits for months. That’s how recently it is that anybody?with the exception of eBay, Yahoo and a handful of catalog outfits?has turned a profit.

No one said making money by selling things over the Internet was going to be easy, of course. Those heady days when the CEO of Beyond.com could grab our attention by appearing in his skivvies on CNBC to demonstrate that customers could use his site in their home and in any state of dress or undress are ancient history now. And the carnage continues. At least 435 Internet companies?of which 47 percent were e-commerce ventures?have shut down since January, according to Webmergers.com, a San Francisco research hub for buyers and sellers of Internet properties. More telling, perhaps, is this statistic: Of the 494 Internet-related businesses that went public during the past five years, only 11 percent trade at more than their offering price, and nearly one-third trade at more than 80 percent below their offering price, according to Sandeep Varma, a vice president at the New York City-based consultancy Stern, Stewart & Co. And with the air whooshing out of the economic balloon, many brick-and-mortar companies are cutting back on their e-commerce spending, Varma says. Or, in the case of bookselling giant Borders, giving up entirely. In April 2000, the Ann Arbor, Mich.-based bookseller turned its Web operations over to Amazon.com.