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Profit is the price of staying in business. That's Management 101, а la Peter Drucker. A lot of people skipped that course in the last few years, and now the market is giving them more than detention.

Even Michael Cowpland, who has been allowed to drive Corel wherever seemed good at the time, finally got pushed out of his own personal research laboratory. Mr. Cowpland probably would have topped the polls as the worst CEO in high-tech for several years running, so it's a real sign of trouble that he's gone. Wall Street rewarded long-suffering shareholders by driving up the company's stock, although Corel without Cowpland may just be a bad company without a whipping boy.

Unfortunately for the Linux business, Cowpland wasn't around early enough to become its whipping boy. Despite a buoyant Linuxworld, most of the Linux stocks remained in the tank. But Transmeta's initial public offering might change that.

• Linux stocks land in the poorhouse

• IPO filing puts Transmeta in the public eye

It didn't hurt Linux to have Michael Dell as a keynoter at Linuxworld. Mr. Dell is a phenom, a rare geek who figured out how to run a company (hired other smart people, and then listened to them). But even Mr. Dell faces problems. A company can only double in size annually for so long, and then what do you do? Wall Street's waiting for the answer, and it seems to think Dell Computer's long-time rival, Gateway, might be a few steps ahead of it.

• Linux is looking good

• PC makers think beyond the box

Meanwhile, Wall Street continues to take Jeff Bezos to school. Amazon.com's CEO played Tony the Tiger in a Red Herring interview, saying everything is grrrreeeat! But this week saw Amazon investments like living.com, Kozmo.com, and Wineshopper.com go through troubles ranging from layoffs to death. It turns out that Amazon already has been accounting for the losses in some of its investments (an interesting twist on the "failure to plan equals planning to fail" maxim), so big write-offs don't appear likely to further crush its bottom line. But still, I think Mr. B ought to go to the whiteboard and write 1,000 times: "We will not continue to lose money, we will not continue to lose money...."

• The fantasy world of Jeff Bezos

• Are the little guys dragging Amazon down?

Nobody's saying Amazon is going to go the way of, say, Value America, which filed for bankruptcy this week. Unfortunately, bankruptcy isn't exactly summer school, and Value America likely won't be the last publicly traded dot com to go there (free Internet service providers, for instance, could be headed there next). Perhaps they can find some solace in the continued existence of Marvel Entertainment. Marvel, the superhero of bankruptcy, if there can be such a thing, now has plans to distribute Spider-Man and the rest of the superhero gang via cell phones. Call me when Nokia starts shipping mobile phones with color screens.

• Marvel stops selling itself short

• Who's next to file for bankruptcy?

• You get what you pay for

Private companies continue to get tutoring from the markets as well. MXG Media, the much-hyped teen retailer, went through layoffs this week. But if they can learn from their mistakes, the market might reward them. After all, PeoplePC managed to go public. But then investors immediately drove its stock down below the offering price. Wall Street's certainly learning.

• MXG enters triage mode

• Investors pooh-pooh PeoplePC IPO

• CarOrder.com runs out of gas

Companies are learning, too. There might not be 3 Rs for improving shareholder value, but if there were, they'd include layoffs and spin-offs. Econets like CMGI are looking at the former, whereas Novell appears serious about pursuing the latter course at some point in the next couple of months. Pasting your numbers is the good old-fashioned way of increasing shareholder value, although analysts were unclear on just how much pasting Hewlett-Packard did this week.

• Econets gussy up to win back investors

• Schmidt starts spin cycle for Novell

• Analysts divide over HP's hype

For venture capitalists, watching the markets is always an education. One of the big lessons seems to be: Invest in biotech. Accordingly, IBM decided to spend $100 million on various bioinformatics investments, and Intermune Pharmaceuticals pulled down some serious money. But biotech investing in general is drawing a lot of cash. Of course, lots of cash is sometimes a bad thing. Witness the German 3G license auction. Will any of those companies ever make money?

• Intermune intercepts $76 million

• Startups climb the human genome to funding

• Germany gets greedy with 3Gs

The markets themselves are in the process of learning new tricks, as well, especially because the Securities and Exchange Commission is insisting that companies start disclosing information to all investors, not just a few Wall Street analysts. Soon we can all be on the Wall Street scene, getting all the crass jokes first and listening to chief financial officers drone on about EBITDA and other topics. Why, it's just like being back in the lecture hall!

• Web opens up stocks and bonds

Of course, if you're a high-level Cisco Systems executive, you get lengthy vacations as it is. Given Cisco's market cap, maybe there's something to this strategy. Hey boss, can I have the rest of the summer off?

• Cisco Watch: Brain drain or permanent vacation?

THE WEEK AHEAD

The Redherring.com debate team's topic for next week: Does Santa Cruz Operation still matter enough for us to attend its Forum? We're all agreed, though, that the Progress and Freedom Foundation's cyber spin-off to the Aspen Institute is on the agenda.

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