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It's a foggy, rainy December afternoon at the port of Redwood City, California--the kind of day that makes reality hard to discern, even at a distance of five feet or so. But suddenly, there it is: Right on the shore, water lapping the marshy ground, are two competing business models. One is a creaky, ugly group of towers crushing sand and gravel next to another industrial site where cars are pulverized into smithereens. It's a noisy eyesore--and a fully functional one.

Just on the other side of the shoreline, a glistening mass of blue and green glass rises from the water's edge. The office park, Pacific Shores Center, is one of the most ambitious real-estate development projects ever undertaken in the area. With 1.7 million square feet in 10 different buildings, the $500 million center, opened in 2001, was set to transform this lonely lick of land into a glamorous technology hub. Featuring baseball diamonds and a 38,000-square-foot fitness center, it is, as the Web site proclaims, "a next-generation work environment designed to facilitate productivity, satisfaction, and balance for forward-thinking companies and their employees."

Yet Pacific Shores' gleaming glass windows hide something: "They built a city and no one came," says Jamis MacNiven, proprietor of nearby Buck's of Woodside, the funky diner best known as the favorite haunt of Silicon Valley venture capitalists. MacNiven is overstating the case a bit. The park has finally reached 70% occupancy. But at least two of its buildings stand empty. The original tenant for two structures, Excite@Home, never made it here, going bust in 2001 and leaving its own abandoned site off Highway 101. And lease prices are a fraction of what they once were-- $1.85 per square foot, down from more than $6 during the boom. So much for the promise of the New Economy. Like Pacific Shores, it hasn't been a total bust. But side by side, it looks as if pounding sand may have been the better bet.

It's quite a comedown from the shiny new world we saw at the end of the 20th century, when the business cycle as we knew it was declared DOA. The Internet was the chief herald of this new and unprecedented age, of course, but many other forces combined to propel us into what seemed a radically different state: the technology-fueled productivity boom, the soaring stock market, globalization, the replacement of budget deficits with surpluses, the apparent outbreak of world peace. We all bought in in some way, awed and inspired by a world where workers were treated justly and rewarded bountifully, where you could make critical consumer and business decisions from your desktop, and where the business status quo was to be discarded like a stale slice of bread. With such logic, it made perfect sense that Yahoo had twice the market cap of General Motors even though the car company had nearly 300 times its revenue; that UPS delivery guys steered their brown trucks with one hand and day-traded Nasdaq stocks on their Palms with the other; or that AOL had more than 2,000 millionaires in its employee ranks. As the glow of the New Economy shone well beyond economics, that boring cynicism we all know so well vanished. For a brief, halcyon moment, all the rules were toast, and anything--anything--seemed possible.

Then, four years ago, it all came tumbling down. The stock market crashed; surpluses became deficits; world peace became endless, ephemeral war; and vaunted CEOs became convicted felons. Instead of utopia, we got bankruptcies, backbiting, bitterness, and a wholesale rejection of everything the New Economy stood for. Zany optimism and creative juices were replaced by the sour feeling that we'd been had. This magazine itself paid the price for being identified by some as the pied piper of this new world.

And yet the business cycle--and yes, it is a cycle--gives us hope once again. Today, with the Nasdaq up a remarkable 91% since its October 2002 low, and with GDP growing at a steroidal 8.2% rate in the third quarter of 2003, a new enthusiasm is sprouting once again. Venture guru Steve Jurvetson was recently spotted in Buck's, his pen outlining a business plan on--yes! --a napkin. Add to that the much-anticipated IPO of Google (expected sometime this spring), our ever-growing dependence on the Internet, and the healthy sums of capital piling into such sectors as social networking and nanotechnologies, and you've got some serious mojo rising.

But have we learned anything at all? Are we doomed to live through another season of high hopes and dashed expectations? We are all older--like the grizzled sock puppet on our cover, who once starred in e-tailer Pets.com's $20 million ad campaign and who now toils as a pitchman for auto loans for people with bad credit (hey, at least he has a job). But are we any wiser?

Like Pacific Shores, the New Economy isn't dead. It just didn't happen in the way we all imagined. And now it's been long enough that we can think more analytically about which of the shiny and alluring ideas of the New Economy were lasting and real, and which were just the iridescent glint of a bubble.