The Dotcom Bubble Burst


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The Internet is a great place for all of us humans, because it has bring convenience to our lives.

We are able to accomplish many thing with the Internet.

We can find so much online, we wouldn’t be able to locate all our information, if we didn’t have the Internet available to us.

The cyber world has made our live so much better, that many of us, wouldn’t know what to do, if the Internet was not available and accessible.

Of course, there are other ways to obtain information today; we should know that we didn’t always have the Internet available to us.

Before The Internet We were Creative

Therefore, during the time that we didn’t have the Internet, we had to find ways to find good valuable, information from other places, other than the Internet.

The old ways of finding information has changed, since the start of the Internet, though, however, many people still use these avenues.

The Internet is the main place to find good valuable information, for many people, because the Internet is helping us achieve and arrive at new frontiers.

We are able to be well informed when we decide that the Internet, would be the main place to find good and valuable information.

In today’s article we are going to talk about the Internet and how it has evolved throughout the years.

The Era

<p>I never realized the era or its boom or even the bubble that burst after it boomed, changed the path that the INTERNET has taken, forever.

The bubble that burst though, was known, as a bubble that lasted for a very long time, because it lasted from1995–2000.

Most financial expert would agree, that the Internet bubble was the longer that ever existed, before it burst.

It also had a NASDAQ peak of 5132.52 in intraday trading and closed at 5048.62 on March 10, 2000.

So we can see that the Internet, really started out strong, when it was first introduced to the world.

In Internet sectors and other related fields equity value in stock markets increased very fast in industrialized countries.

The era were the glorious days of the INTERNET, but the INTERNET continues to see many other glorious days, due to its evolution and the many changes, it has brought to each and every one of us.

The Internet is known as the Information Superhighway, because when you use it, you have access to all the information in the world, which has been uploaded to the Internet.

The Internet is useful and also has all the information you can consume.

The Internet does not have all the information in the world, of course not, but it is very close to having all the information in the world, if websites like King Info Life continue to produce good quality information, that is both informative and valuable to its users.

Major magazines in the United States gave a lot of information about the features, of a new communication highway in their issues between April 1992 and July 1993.

Boy were they right, these magazines, predicted that the Internet will be around for people to have easy access, to valuable information.

The Internet Was Not What It is Today

At the beginning, the INTERNET was not viewed as the INTERNET, but instead it was viewed as a television that one could establish interaction and find good valuable information.

Today the INTERNET is the place where we live and make life happen, because many of us use the Internet for many of our personal businesses.

Many companies have also used the Internet as a way to increase their bottom line, and for many other company operations.

Other companies are a by-product of the Internet, if the Internet didn’t exist, these companies wouldn’t exist neither.

The INTERNET boom is sometimes referred to as a steady commercial growth of the INTERNET.

Companies During the Dot-Com Boom

Many dot-com companies were funded online, through the Internet boom period, because companies were seen profits on the stock market.

If a company simply added a .com at the end of their name, then they would be predicted, to make lots of money in the future.

This process was also called the prefix investing, which led the Internet to be very popular, very fast around the globe.

Technological advancements, stock prices that were growing fast and widely available venture capitalists, gave many investors the impression that investing in those .com companies would turn up profits in the future.

Many people thought that the world has finally changed and that the future of business was the INTERNET.

Lessons Learned From The Bubble Burst

However; when the stock market crashed, everyone came back to their senses because the hype of the INTERNET didn’t live up to its promises.

One of the lessons we can take from the Dot-com bubble is that, when the prices in the stock market are overvalued and fundamentals are poor, the risk of investing are high and one shouldn’t invest.

The Dot-Com bubble burst because, the fundamentals that were present during the Dot-com bubble, were new, and many of the new companies that came from the Internet didn’t have a business plan; which showed how they intended in making profits.

These companies didn’t have a well put together model that would help their business turn up some profits in reality.

Everyone in the business world was just amazed at, how beautiful a website could look on the Internet, and didn’t think about how they could profit from the masses coming to visit them online.

INTERNET based companies flourished during the dot com period, due to the fact that many people wanted a piece of the pie.

Venture capitalists and banks looking to cash in on the INTERNET trend, were the major source of funding for INTERNET companies.

All of this came to an end when the dot-com bubble burst though and many people lost their jobs.

Many companies sold out or closed their businesses, and the technology industry in general suffered major losses.

Reasons The Led to the Crash

The reason this bubble burst was because there was an economic recession during that era, the terrorist attacks of 9/11 didn’t help either, and the fact that there was corruption going on in big corporations as well, gave way to the bubble burst that took place.

Not all companies that were founded during the dot-com era, were a bad investment though, because some of them did do their homework.

It pays to do your homework; the companies that survive the dot-com bubble burst were able to not only score massive number in profits, but they also establish themselves as the go to place, for information online.

Investors who were educated and professionals in the stock, knew about companies that were poor; these companies raised red flags, which educated investors knew how to spot and avoid, to be successful during the Dot-com bubble.

The combination of red flag companies and prices that are overvalued is a sign that says that soon the market will crash if things continue to go the way it’s going.

After The Crash

After the dot com bubble burst in the late 1990’s and early 2000s the dot bomb era was the period that followed.

Today technology workers have different priorities, such as a strong business plans and base compensation.

But there was a very large amount of money lost, during the dot-com era and it may take years, before we have a precise number of the amount of money that was lost during that period.

The losses are in the billions for sure, the reality of the dot-com bubble burst, took a long time to settle in, with the companies that were affected.

The burst of the bubble taught many investors and the world a lesson about the INTERNET and where it was headed.

People who were major players in investment, became aware that a more realistic approach was necessary to invest in online companies.

Now investment will not come to an online company unless they meet certain criteria, such as the time that the website has been operating and whether the prospect for profits are good or bad.

Investor’s Actions during the Dot Com Era

Many companies found it practical to start a business online, without having any product or any signs of making real profits.

Despite the fact, many investors still invested large amounts of money into these companies, causing the market to rise dramatically; and hundreds of technology and IT based companies being founded weekly.

The dot com bubble was essentially created by the unrealistic demands that investors put on the stocks of online companies.

The demand drove the price of the stock beyond any accurate and rational reflection of its actual growth; many investors did not have accurate information about the performance of the stocks they invested in, therefore, many investors made bold and risky moves that led the market to crash.

Investors were not thinking too much in realistic terms, they were looking for new ideas instead of looking at the business plan of a company, and whether the company would turn up profits five years down the road.

Investors blindly invested in these companies, which led the markets to show IPOs of INTERNET companies to be emerging at a very fast rate.

A Good Example of Greed

However, there was problem with this picture, and the initial signs of the problem came from the companies themselves, when they reported major losses within months of them going public.

This is an example of greed, because companies who didn’t even know, what they were all about, were told to grow as big as Microsoft overnight because they had the funds to do so; however this idea was not ideal; because many companies failed and many people lost a whole lot of money.

The moral of the story here, is that if you are going to create a website, it has to bring value to your visitors and you have to learn to make money with your website in the process.

The crash that happened, significantly dropped the total value of the market, and many investors tried to run away from the crash but were already losing a lot of money.

Many of the investors try to sell their stocks quickly trying to avoid the worst of the crash but it was too late.

For many companies and investors the growth of the technology sector was nothing but an illusion, and high profile court cases emerged due to the dot com bust, unscrupulous business practices, and monopoly businesses practices.

Many dot-com companies and technology companies suffered serious financial blows, and new self-made millionaires, had to move back with their parents and live in their old room.

It was not looking good for the Internet and many of the people who decided to invest in it, without first calculating the risks.

During this period, investment banks, analysts and independent investors did not follow basic accounting principles, which lead them to make big mistakes.

The Early 2000s

In the early 2000s most technology companies did not have a strong profit record, most of them had negative profits, but this did not stop investors from investing in these companies.

It was a dumb idea, on the part of many investors, to invest in companies, which didn’t show any type of potential.

The only potential that these companies showed, was the fact that they were born out of the Internet and no one has ever seen one before, or what it could do for the world.

In order to prevent financial crashes information about a stock must be more objective, although technology company stocks seemed to have a very solid potential to grow, due to the fact that they were one of a kind; investors still needed to take into account many other factors before putting so much money into online companies.

The dot com burst has led investors to be more realistic about INTERNET companies; therefore today, they put very little value on these companies, investors and analysts have become a lot more financially objective, which means that, the target company is measured in terms of monetary terms (profits over time).

Outside Factors That Contributed to the Bubble Burst

It is obvious that there were outside factors that contributed to the burst of the dot com bubble.

One of these factors was the rise in outsourcing, this rise led to a high percentage of unemployed computer developers and programmers, because they lost their job after the burst.

Then the United States suffered one of the most horrific terrorist attack in September 2001, these attacks lead the market and the economy to lose any life it had in it.

Companies who were also doing bad business and submitting false financial reports to government financial institutions, were caught red handed.

This led to the loss of consumer confidence in technology companies, which added to the already growing issues of dot com companies.

Also, major financial American publications such as Forbes and the Wall Street Journal encouraged investors, to invest in companies that were risky and did not follow the basic legal principles that companies would usually have to follow.

Back in 2000 Warren Buffett said “Equity investors currently seem wildly optimistic in their expectations about future returns.” The media was another outside factor that contributed to the bubble burst, because it caused investors to make huge investments on companies that did not return any profits over a period of time.

The media was also used to promote the “Get Big Fast” mentality, which of course started during the dot com era.

This belief lead many investors to buy more stocks from companies, which were not worth the money, this behavior drove the price of the stock high, making the companies to become overpriced.

The Employment Outlook after the Dot Com Era

<p>The technology industry underwent a lot of changes after the dot com era, which in most people’s eyes was one of the best times for the many INTERNET companies, which would later suffer from the bubble burst.

Between the years of 2001 and 2008 the employment outlook for many technology companies did not have a bright future, and Silicon Valley high-tech industry jobs were down seventeen percent.

But many online companies did survive, and they kept the Internet machine going, which gave rise to what we have today.

Although employment was really bad for many companies, many other online companies were booming during the recession

List of Companies That Were Created during the Dot Com Era and Other Events


Amazon is Founded


Craigslist Is Founded


GeoCities is Founded as Beverly Hills Internet (BHI)

1995 Mar 1

Yahoo! Is Founded

1995 Aug 24

MSN Is Founded

1995 Sep 3

eBay Is Founded

1996 Nov

eToys is Founded

1998 is Founded

1998 is Founded

1998 is Founded


Interest Rates Begin To Fall

1998 is Founded

1998 is Founded

1998 Sep 4

Google Is Founded

1999 is Founded

1999 is Founded

1999 is Founded


Webvan is Founded

1999 May 19

eToys Goes Public and Completes Its Initial Public Offering

1999 Dec 30

FTSE 100 Index Peaks

2000 Jan 11

AOL Acquires Time Warner


Webvan is Founded

2000 Jan 14

The Dow Jones Peaks

2000 Jan 30

Super Bowl XXXIV Features Seventeen Dot-Com Companies

2000 Mar 10

Dot-com Bubble Reaches Peak

2000 Mar 13

The Market Opens 4% Lower On Monday Than It Closed On Frida

2000 Mar 24

S&amp;P 500 Peaks

2000 Apr 3

Microsoft Is Declared A Monopoly

2000 Apr 15 Gave Away Ten Million Dollars To A Lucky Contestant

2000 May 18 Goes Bust

2000 Nov 6 Announces Closure


Webvan Collapses

2001 Jan 28

Super Bowl XXXV Features Three Dot-Com Companies

2001 Mar Switches To

2001 Mar 7

eToys Files for Bankruptcy

2001 Apr Closes

22001 Aug 26 Announces Closure

2003 Oct

AOL Time Warner Drops “AOL” From Name in Wake of Dot-Com Bubble Burst

2009 Oct 2

GeoCities Goes Off The Internet

2009 Oct 26

Yahoo, Inc. Closes Once-Iconic GeoCities Website