In this study, we examine the phenomenon of the decline in valuation of dot-com organizations and propose that dot-com organizations that have continuously altered their business model in response to the environment have been rewarded by superior valuations in the market place. We first present the dominant perspectives in organizational adaptation research, and discuss their relevance to the current study. Using the concept of business models, we investigate the strategic adaptation paths of 22 dot-com organizations in the period from 1998 through 2001 and correlate them against the performance of their share prices over the same period.