Dot.com to Dot.bomb-Blog #7

In class last week, we discussed the Dot.com Boom and subsequent Bust from the 1990s, a pivotal period in the tech industry that was characterized by explosive growth, particularly between 1993 and 2000, as the internet became more accessible to the general public. Companies quickly recognized the enormous potential of the web for business, leading to the creation of countless startups. One key factor in this boom was the rise of early internet services like Prodigy, CompuServe, Genie, AOL, and Delphi which were initially popular for connecting users online. 

I remember going over to my friend Melissa's house in the late 1990's as a highschooler and hearing her Dad talking about Prodigy. I didn't understand what it was back then but through overhearing his conversations, I knew it was important. I have to assume that my parents were using the internet around that also but in my house it didn't seem to be talked about a lot. I wasn't really that clued in at that age as to what was going on in the world. 

The Dot.com Boom was basically a time of rapid expansion and speculation in the tech and internet industries where people believed the internet could change the way we do business, communicate, and live and between the mid-1990s and 2000, hundreds of new companies popped up, many of them trying to build websites and services that would take advantage of the growing internet. Investors were eager to get in on the action and put billions of dollars into these companies, hoping the internet would create a whole new economy. It was a time of big bets on a new, exciting future. However, many internet companies were valued much higher than they were actually worth, with little to no profits or solid business plans. Investors believed that if these companies could just grab enough market share, they’d eventually make money. This created a stock market frenzy, where companies were valued based on hype rather than real success, and growth was not sustainable. The Dot.com Bust that followed was a wake-up call for many and hundreds of overvalued companies went bankrupt because their business models didn’t work, they spent too much, and they didn’t know how to make money. The excitement of the boom quickly turned into widespread layoffs and a loss of investor confidence. One example from class was Infospace being valued at more than Boeing. In hindsight, the Dot.com Boom showed how unrealistic optimism can lead to rapid growth followed by a painful crash. It highlighted the importance of strong business plans, long-term thinking, and being careful about speculative investments. I find it interesting that some companies like Amazon survived the Dot.com bust and now they dominate e-commerce.