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'90s Dot-Coms — Where Are They Now?
An anonymous reader writes "The Industry Standard has put together a list of 10 dot-com stars from the Internet bubble of the late 1990s, and tracked down what happened to the services and their founders. A lot of the services are still around, albeit under new ownership, including eToys, Garden.com, and DrKoop.com. Others have been completely reinvented — Boo.com, an online clothing retailer that burned through $125 million in funding in the late 1990s, is now an online travel community. Of the founders, many were able to cash out early and/or achieve later online success. Excite's Joe Kraus and Graham Spencer later started JotSpot, which was bought by Google, and Kraus now directs work on Google's OpenSocial initiative. Others did not fare as well, such as two of the co-founders of Garden.com, who declined to cash out at the height of the bubble, and are currently 'between business ventures.' The insiders' post-mortems of the failed dot-coms are interesting — several suggest the concepts were good but too early for their time, while others identify specific factors that led to the failures — ranging from a lack of advertising to 'intense' greed."
Ironic, isn't it, that the people who "declined to cash out"(read: take investors money and run) are unemployed, while many of those who pocketed the money are employed elsewhere? I would prefer it the other way around.
In case it's not been said before, thank you for having honor and respecting your investors.
I think the fundamental flaw in most of these is that the cash flow was completely disproportionate to the amount the company is valued at (stock price). This is not a trend that is going away either. Is facebook really worth billions of dollars? Really? Suppose someone buys it for a couple billion. Is it possible to recoup that investment without driving all the users away? I would argue no.
I pick on facebook, but there are plenty of other examples to be found.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
Ahhh the bubble. I'm quite nostalgic about it now.
What I don't miss about the bubble is TV programs documenting some teenage CEO playing at running a business with apparent massive backing from stupid investors. Hey this kid is "worth millions"! (failed six months later of course).
That an generic domain names. I still don't know who is typing those in.
Remember VIOS? It was a first stab at being the metaverse inspired by 'Snowcrash'. It had billboards, property ownership (with auctions and prime locations), chat, the usual easy-to-implement stuff. Unfortunately it lacked the hard-to-implement stuff like avatars, voice chat, facial expressions, i.e. the things that online social communities actually want most.
I remember I visited its 'downtown' ("port zero" in Snowcrash terms) area. It was a clot of billboards for what were at the time the first net-aware businesses. There were lots of avatarless users roaming around but no social interaction. I considered buying a lot, speculately, and I'm glad I didn't. VIOS vanished without a trace shortly afterward.
Now that I think about it, the whole thing may have been a scam... but they must've put some serious effort into their rich client, because at the time it had a VR MMPOG interface of notable quality.
FATMOUSE + YOU = FATMOUSE
You don't seem to understand. "Lack of advertising" in the context of dot-coms doesn't mean "we dot-coms should have advertised" but rather "damn, we thought people would pay millions to advertise on our site, and the bastards didn't." It's a different end of that shafting.
To recap, the dot-com bubble was started by greed over advertising money.
In the stone age of the Internet, sites had one ad banner on the front page. That was it. Not animated, not pop-up, no pop-under, and certainly not wall to wall. It also usually had something to do with the site's topic, e.g., a site about games, would likely had a banner to some games shop or publisher. It was easy to target those by hand since, well, you only had one and it stayed with you a long time.
And people actually tended to look at it, and occasionally even click on it. I mean, why not. We hadn't been flooded with ads yet and desensitized to the point where they're mentally filtered out.
And the ad rates were calculated for _that_ situation. A page view for your ad in those conditions was considered worth a lot. More importantly, the ratio between total ads shown and advertising budgets allowed quite a nice price per view. The pie was divided into a smaller number of slices, so to speak.
Unfortunately, that also gave some people the idea that, basically, they could make a site with 10 banners per page, and rake in tens to thousands of dollars (at those rates) per month for just being there. Heck, that there's even room for growth there. If you want twice as much money, just double the number of banners, and there you go, the ad provider surely will keep paying the same rate for them.
Whole sites were _designed_ to be little more than wall to wall ads, with a tiny frame in the middle for the actual content. Heck, I worked for one.
Others had no qualms to just lie to ad provider. (At first most sites hosted the banner themselves, so the ad provider had to just trust them that they actually had a trillion pages served last month.) Others used scripts to refresh the page in a loop, and/or to simulate a click on the ad if they were paid more for a click. Others urged their users to do that for them. Etc.
Basically a whole "industry" and a lot of financial analysts, built a model and started a bubble, based on little more than defrauding the ad providers. And on the bet that the ad providers were drooling retards, and wouldn't recalculate the rates. Most weren't even too secretive about their plans to abuse the system, and built whole projections for the next 20 years based on the underlying assumption that the rates would indeed stay the same, and the rest of the economy wouldn't react when that scam bleeds it dry.
Unfortunately, while the ad providers did react somewhat slower than expected (and it helped further "confirm" the belief that, yep, they're helpless and waiting to be fleeced), react they did. Among other things, because the actual companies advertising their products had a finite marketing budget. You couldn't tell them to pony up 100 times more money than last year, just because the number of ad banners on the web rose 100 times. Most didn't even have that kind of money.
And what happened was, well, basic economics. If there's the same X million dollars on the "demand" side for ad space, but the "supply" side has grown 100 times, then the price per banner dropped 100 times too. In fact, what happened eventually went even further than that, like often is the case in an overproduction situation. The old style plain banner views didn't just become 100 or 1000 times cheaper, they became outright worthless. The ad providers started wanting to buy better stuff instead, like better ads, or clicks instead of views, or unique users.
And that's when the dotcom's dreams of an endless stream of billions in advertising money, started going downhill. Almost none of them got as much advertising as they had built their business plan on.
A polar bear is a cartesian bear after a coordinate transform.
Seasonticket.com was the dot com I worked with. Lots of money for an idea that wasn't going to fly at a time when broadband wasn't common. Management had some issues too. Firing your IT director and replacing him with a guy who guts the staff to give his buddies jobs probably isn't the best idea.
Amazon and Yahoo to name a couple.
Stamps.com actually makes a pretty good product for small businesses. I own my own business and use it, as do many similar businesses. It's not a website but is actually a product that you install on your computer. Simply put, it allows you to print postage from your PC onto envelopes, labels or "net stamps," and it integrates into your word processing software. It's easier to use than electronic postage scales and you don't have to buy individual stamps which are fine if you only have standard sized letters, but a pain in the rear if you send anything which weighs more. With regular stamps, a business needs many different values of stamps which are just lying around.
The fact that Stamps.com is still around is testament to one central truth: good, well implemented ideas escaped the dot com bubble. Junk didn't.
Make love, not reality television.
"These are all things that are sensible things to sell on the Internet"
Pets?!? Would you buy an animal without meeting it in person first? What's postage on a dog? Pet supplies? What's postage on a 20 lb. bag of dog food? And how do you mail a fish tank? or the fish?!
Clothing? Where's the fitting room?
Holidays? Good luck getting it shipped before the holiday is over. Did anyone order their Christmas lights online this year?
These are specific offerings where brick and mortar stores actually out perform the Internet.
You seem to think that "making as much money as possible for your shareholders" is destructive greed. It is not.
Let's put it another way, have your rates for your wireless phone gone down? Is there more competition in wireless or less in the last 10 years? Telco greed in action.If my cost to provide a service goes down, yet the market still bears the original price, why exactly would I lower what I charge for it? If anything, this is a problem with competition in the industry (or inflation), not "greed" on the part of the company.
Likewise, spending money on lobbying isn't greedy. It may be dubiously ethical, but spending money in order to get legislation passed that is favorable to your corporation can only be good for shareholders (who are the people the company is responsible for enriching).
In short, it seems that you are the one who doesn't quite get how the real world works.
If my cost to provide a service goes down, yet the market still bears the original price
Which it won't. Ever.
get legislation passed that is favorable to your corporation
And the legislation would be unfavorable to whom exactly? Fairies? Ignore for a moment the competitors that the telcos harm by burdening their competitors with legislated costs/litigation/etc. Consumers are still *directly* harmed. Consumers pay higher prices and get less utility because there is less competition!
If that's okay with you, then your morals allow for more inequity and general harm to consumers than mine. That's okay.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html