The original dot com collapse?

[scribebaseball]

I was reading the New Yorker story on Lou Dobbs and about how he originally had left CNN to run Space.com, which is still operational and somehow survived the "dot com burst," which is constantly written about. Forgive me for my naivete - I think I was pretty much just getting out of college and getting my feet wet in the world when this happened, and proudly ignorant at the time of anything going on outside the realm of sports (I've changed a lot since then).

What exactly happened in '98-'99 in regards to the Internet? If there was this big collapse, how come the Internet is so omnipresent now? Just looking for a Cliff Notes version - I know I can look it up, but I prefer a conversational rather than academic explanation.

 

[leo1]

the internet didn't collapse. the valuation of internet companies collapsed. everyone and their sister were starting companies and throwing out massive salaries and stock options. people were investing paying zero attention to the actual numbers that one must consider when investing. for a short time, a ton of people got rich working in online ventures and investing in them. then it collapsed because no one was making any money from the internet.

 

[BYH]

It was '99-'00. Mostly '00. It sucked. I'm still digging out of debt from it.

The big collapse occured when venture capitalists figured it wasn't the smartest thing in the world to throw millions of dollars at people who had ideas and nothing else. So we went from a wild wild west where you could get paid for writing about anything to a Jelenican wet dream in which "writing for exposure" was the new buzzphrase.

That's not changing anytime soon, even if writing on the Internet is a sturdier proposition.

 

[old_tony]

Probably the greatest gauge of the popping of the doc.com bubble is the fact that the NASDAQ is doing well at around 2300-2400 yet it was over 5000 in the 1999-2000 era.

Companies that had no assets were trading at unbelievable heights. And, of course, the bubble eventually burst.

 

[Cousin Jeffrey]

I invested my life savings in pets.com. (pause, pause) Not!

 

[scribebaseball]

Probably the greatest gauge of the popping of the doc.com bubble is the fact that the NASDAQ is doing well at around 2300-2400 yet it was over 5000 in the 1999-2000 era.

Companies that had no assets were trading at unbelievable heights. And, of course, the bubble eventually burst.

By the way, I disagree with your quote tagline. The country needs farmers and steel workers and teachers, too. There just aren't enough CEO jobs to go around. Some people don't mind the middle-class life, and that's OK. And the CEOs of the world who are making out like bandits, if not legally at least morally, SHOULD reinvest some of that money the free-market system allowed them to make back into the free-enterprise system that made it possible.

If you're willing to work 40 hours a week, you should be able to support a family and your children should at least have the opportunity, should they choose that pursuit, to rise to that CEO level, not be beaten from Day 1.

End of political rant, back to dot com history lesson.

 

[Mighty_Wingman]

Probably the greatest gauge of the popping of the doc.com bubble is the fact that the NASDAQ is doing well at around 2300-2400 yet it was over 5000 in the 1999-2000 era.

Companies that had no assets were trading at unbelievable heights. And, of course, the bubble eventually burst.

By the way, I disagree with your quote tagline. The country needs farmers and steel workers and teachers, too. There just aren't enough CEO jobs to go around. Some people don't mind the middle-class life, and that's OK. And the CEOs of the world who are making out like bandits, if not legally at least morally, SHOULD reinvest some of that money the free-market system allowed them to make back into the free-enterprise system that made it possible.

If you're willing to work 40 hours a week, you should be able to support a family and your children should at least have the opportunity, should they choose that pursuit, to rise to that CEO level, not be beaten from Day 1.

End of political rant, back to dot com history lesson.

I've read this post several times, and I really can't figure out what it's about, or what inspired it.

I'm so confused. I feel bad about contributing to a threadjack, but seriously...this is a mystery.

 

[scribebaseball]

This tagline from Old_Tony:

"You know, education, if you make the most of it, you study hard, you do your homework and you make an effort to be smart, you can do well. If you don't, you vote for Democrats." -- old_tony

I didn't like what it implies about the middle class.

 

[Mighty_Wingman]

It's a spoof of a Kerry "joke." It was in all the papers. Happened like a week before the election.

Between the dotcom thing and this, I'm kind of wondering if you're just putting us all on. Which, for the record, would be hilarious. Seriously.

 

[old_tony]

This tagline from Old_Tony:

"You know, education, if you make the most of it, you study hard, you do your homework and you make an effort to be smart, you can do well. If you don't, you vote for Democrats." -- old_tony

I didn't like what it implies about the middle class.

Sorry scribe. It's simply a paraphrase of the famous John Kerry quote about our troops. I just changed "end up in Iraq" to "vote for Democrats." Most here would have picked up on that.

Edit: As, obviously, Wingman picked up on it.

 

[scribebaseball]

This tagline from Old_Tony:

"You know, education, if you make the most of it, you study hard, you do your homework and you make an effort to be smart, you can do well. If you don't, you vote for Democrats." -- old_tony

I didn't like what it implies about the middle class.

Sorry scribe. It's simply a paraphrase of the famous John Kerry quote about our troops. I just changed "end up in Iraq" to "vote for Democrats." Most here would have picked up on that.

Ah ... I get it now. OK, that's fair. It was a stupid thing for him to say.

 

[westcoastvol]

I'll tell you what happened-and I saw a lot of it go down in San Francisco.

People were retiring off their stock options at age 25.

They were throwing incredibly lavish parties in incredibly posh office spaces. I saw hundreds of $800 Herman Miller Aeron chairs in plastic, ready to be used at these parties. I saw drinks spilled on them and blow snorted by people sitting in them. I also saw those same unused chairs auctioned off.

Instead of paying vendors for their time, goods and services, oftentimes, they would pay via stock options, which weren't worth the money they were printed on. Hard goods paid for by fake money.

And sometimes, they went over the top in acquiring technology. Webvan, while a fantastic idea, ordered over a billion dollars worth of stuff to automate their warehouses. Amazon did the same, until they were smart enough to liquidate the technology and the merchandise, instead, partnering with retail stores to let the stores themselves handle it.

Crazy, heady ****.

 

[Perry White]

This is a good summary of what happened: http://en.wikipedia.org/wiki/.com_bubble

 

[dixiehack]

They were throwing incredibly lavish parties in incredibly posh office spaces. I saw hundreds of $800 Herman Miller Aeron chairs in plastic, ready to be used at these parties. I saw drinks spilled on them and blow snorted by people sitting in them. I also saw those same unused chairs auctioned off.

By the time a chair has been baptized in cocaine and bourbon, calling it "unused" seems a bit much.

And I realize I'm old, but we seriously have to recap 1999 for someone?

 

[SoSueMe]

In case anyone forgot Pets.com, here's a brief history (pun intended):

Pets.com aimed to sell pet accessories and supplies over the World Wide Web, analogous to Webvan's attempt to sell groceries, and garden.com's try at selling garden supplies online. Pets.com launched in August of 1998 and went from IPO on a major stock exchange (the Nasdaq) to liquidation in 9 months.

And, who could forget this guy: http://jrandolph.com/selenium/fosdem2006/pix/pets_com_puppet.jpg

 

[dooley_womack1]

That dotcom boom was built on the thought that retail shopping at a brick-and-mortar store would soon be a thing of the past. It was soon apparent that there would be some things that people would just not buy online, and that people still liked to cruise the stores.

Now, people are saying newspapers would be a thing of the past. The difference is, it's established ventures (ESPN, Yahoo) that are at the vanguard of that, along with newspapers themselves, not crap like flooze.com or pets.com.

 

[scribebaseball]

They were throwing incredibly lavish parties in incredibly posh office spaces. I saw hundreds of $800 Herman Miller Aeron chairs in plastic, ready to be used at these parties. I saw drinks spilled on them and blow snorted by people sitting in them. I also saw those same unused chairs auctioned off.

By the time a chair has been baptized in cocaine and bourbon, calling it "unused" seems a bit much.

And I realize I'm old, but we seriously have to recap 1999 for someone?

Sorry to waste your precious time - I understand that a lot of people lost a lot of money, but it's something that's talked about so much now, yet the Web seems to be doing just fine, with the YouTube guys cashing in big and others looking to do the same. I just wondered how close the Internet came to crash landing before it soared.

 

[novelist_wannabe]

The Internet itself never really crash-landed, as you put it. It was Internet-based business that crash landed.

 

[Football_Bat]

It was simply a market correction, albeit a ginormous one.

How the tech bubble got that big escapes me. But it did, the bubble burst, people made a pile of money and lost it all in a matter of months. The smart or lucky ones (read: Mark Cuban) got out while the getting was good.

 

[JR]

The .com silliness was the Dutch Tulip Bulb --350 years later. It was the same mentality.

Still one of the best books on the subject of lemming behavior is "Extraordinary Popular Delusions and the Madness of Crowds" published back in the mid 1800's. You could add a chapter on the .com nonsense of the late 1990's and it wouldn't be out of place.

It was an extraordinary time. Normally intelligent people lost their minds and prattled on about the "new economic model". It was hilarious.