Industry disruption

Bytes beat bricks

June 23, 2011: 5:00 AM ET

The tech boom of the 1990s was thought to spell the death of plenty of brick-and-mortar companies, but they coexisted with their e-rivals for years. It looks like those days are now coming to an end.

By Scott Cendrowski, writer

FORTUNE -- We all knew that the 1990s tech boom would change the world. But then a funny thing happened: For years brick-and-mortar companies happily coexisted with their e-rivals. Borders, for instance, actually increased sales from 2000 to 2005 as it dueled Amazon (AMZN). Now those days seem to be ending. Digital companies are so big, and growing so fast, that they're obliterating old businesses. Consider these four examples: The U.S. Postal Service says it will be insolvent by the end of 2011 without a bailout. Blockbuster and Borders have filed for bankruptcy. And music stores keep closing.

Texts vs. Mail

The U.S. Postal Service is on track to lose $6 billion this year, as e-mails and texting reduce mail volumes faster than postage fees can rise.

Netflix vs. Blockbuster

Blockbuster hit 4,000 stores in two decades. Then, in 1997, Reed Hastings got charged a $40 late fee on Apollo 13 and founded Netflix (NFLX). The rest is history.

Amazon vs. Borders

Amazon almost single-handedly bankrupted the No. 2 bookseller in a decade. Barnes & Noble (BKS) is fighting back with its Nook.

iTunes vs. CDs

ITunes made its debut in 2003, with devastating effects on music retailers. Tower Records went bust in 2004. Musicland folded in 2006. FYE has shriveled.

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