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Dot-Com Craze Peaked 10 Years Ago This Week

Posted by kdawson on from the irrational-exuberance dept.

netbuzz writes "When the NASDAQ stock index hit its all-time high of 5,133 on March 10, 2000, it had more than doubled in a year and the dot-com bubble was already leaking in a big way. A week later the NASDAQ had fallen 9 percent. A year later it was below 2000. Gone were such poster children of the era as Pets.com, Kozmo, and — who could forget? — Whoopi Goldberg's Flooz. Here's a look back."

26 of 192 comments (clear)

  1. What is Up with Go.com? by eldavojohn · · Score: 3, Interesting

    Okay on the list they have go.com as #8 biggest flop. I go to www.go.com and sure enough it looks like I just typed in the wrong URL and got some domain parking crap. And yet, on Alexa it's ranked 15th in the United States. Is Alexa horribly flawed or what is going on with www.go.com? How does a site that looks like that still rank number 15 in the United States? It's above Bing, CNN, Flickr and Wordpress. Huh?

    --
    My work here is dung.
    1. Re:What is Up with Go.com? by Jer · · Score: 2, Interesting

      Wow - that is an ugly site.

      But even though it looks like "domain parking crap" it does appear that that it is the main page for the Disney-owned "go.com". They just slapped an ugly page on the front and I guess they assume no one will ever visit it.

  2. Programmers where like Rock Stars... by acomj · · Score: 3, Interesting

    Jobs where plentiful, signing bonuses common, stock options flowed like champagne......

    I miss it.

    Then company I worked for had an all hands meeting and then proceed to hand out unemployment forms.. We weren't even a dot com, but lack of investment killed them.

    Like waking from a wonderful dream....

    1. Re:Programmers where like Rock Stars... by mikael_j · · Score: 2, Interesting

      At least you got to experience those "golden years", I was still in school when the dot bomb hit. Admittedly I decided not to go directly from high school to the job market because I was convinced the whole thing would blow up, but what I didn't know was that entering the job market in the post-bomb years with no experience and straight out of college meant most employers would assume I was just another one of those "hey, there's gold in them thar intarwebs" guys who was just trying to make lots of money.

      Sadly I knew as a kid (as in, by the early 90s) that I wanted to be a programmer/developer and first started coding a couple of years earlier at age 8, didn't help one bit since every employer assumed I hadn't even known what a computer was until 1999 or so, spent 2.5 years doing first and second line tech support for ISPs before getting a "real" job. :(

      --
      Greylisting is to SMTP as NAT is to IPv4
    2. Re:Programmers where like Rock Stars... by MBGMorden · · Score: 2, Interesting

      Pretty much the same thing happened with me. I entered college in Fall 2009. I had known since I was playing on my Commodore 10 years earlier that I wanted to be a programmer when I grew up. There were tech firm recruiters coming in talking to the CompSci majors promising all sorts of great things. To me I was like "Hey - I wasn't expecting this, but damn this programming thing might actually turn out to be even more awesome.". The speakers were even saying things like "I could probably place most of you in a positino with just the month or two worth of college you have taken so far".

      Fast forward to Fall 2003 when I graduated - nobody seemed to be hiring. On the off chance that you found somewhere hiring they wanted a resume that was 10 pages long detailing decades of experience. I ended up taking a job teaching at a certificate factory - almost felt guilty teaching these kids these classes for "certificates" that would be even less useful than the degree I had.

      After a year of teaching I ended up getting a job as a trainer with a local government office - which is how I basically weaseled into my "real" job. They had programmers, but had very high experience requirements for hiring new ones. Took about 2 years, but through that long worth of talking, conversing, etc, they finally got the hint that I actually could code and knew what I was doing (plus was that I knew mostly newer stuff - Java, C, C++, PHP, etc - compared to the COBOL that their existing programmers knew). So eventually my supervisors promoted me to a programmer just because they already knew me. 2 years in that and I was able to move up to project manager.

      Thankfully if I ever have to leave here my resume is now sufficiently padded with some good experience, but for a while I was afraid that I'd be working at McDonalds to pay off my student loans.

      --
      "People who think they know everything are very annoying to those of us who do."-Mark Twain
    3. Re:Programmers where like Rock Stars... by istartedi · · Score: 2, Interesting

      Dream time. Cue didgeridoo and rock paintings.

      Even in Northern Virginia there was mania. One afternoon on my way home from work, I saw a plane fly by trailing a banner "Cool Internet Jobs at UUNet". Searchlights played in the evening over Tyson's corner. There was also a helicopter trailing a big sign for some tech company... I want to say HP, but I don't exactly recall.

      Alas, the ISP I worked for was acquired by a boring telecom, which raised our pay a bit but didn't fill our parking lot with Ferraris.

      The post 911 "security boom" in the DC area was much better for me; but it had its own problems. What's next?

      --
      For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
    4. Re:Programmers where like Rock Stars... by zero_out · · Score: 5, Interesting

      I had a similar, unfortunate, experience.

      I studied computer science because I loved using computers since I was in first grade, even though I never owned one until a few months before graduating HS. There was just something about their flexibility, and capacity for automating tasks that appealed to me.

      When I chose CS as my major in college, my friends were all telling me that I only needed to study for a couple of years, apply for a few jobs, get competing offers with huge salaries and signing bonuses, and I would be set. This was based on the experiences of their older brothers, cousins, etc. As a result, I thought nothing about all the loans I was taking out to attend university. It wasn't that I was greedy, I just couldn't get a full scholarship, and my parents couldn't afford to give me a dime, so if I was going to continue my education instead of working right out of HS, I would need a lot of loans.

      Then the bust happend, and I spent my summer of 2001 working helpdesk for a government agency. In 2002, I couldn't even get a summer job, and lived off $250 a month leftover from my loans that year, with $200 going toward rent, ~$35 toward utilities, and ~$15 toward food. Not even a fast food joint would hire me. In 2003 I didn't even bother looking for a job, because it was preferrable to be scraping by and deal with more debt when I graduated than to face the impossibility of finding a job. When I graduated in 2004, I jumped at the first job I could get, which was desktop/server administration, intranet maintenance, and helpdesk in a 3-man IT shop for a very non-technical company. It paid the bills for 3 years, and allowed me to support my wife while she attended university. Toward the end of the third year, I was offered my first development job, working for a small company that was bought (a week later) by a mega-multinational.

      Now things have turned around, I am earning twice what I was earning at my first job out of college, and my $105,000 in school debt is well under control. My wife graduated from school, and is earning a very nice sum too. Sure, she has $40,000 in school debt, but five years of scraping by together has taught us how to live well below our means; and with our combined salaries (and no kids) we have considerable means.

      If the "golden years" never occured, I would have ended up working at a video store straight out of HS, spending all my money on video games, and living with my parents. I never got to experience the era, but it gave me the courage to take a bold risk and become the first person within my family (immediate and extended) to attend college. Sure, it was a rocky road, hiking through the rubble that was the dot-com bust, but I made it through in the end.

  3. the dotcom boom by Em+Emalb · · Score: 3, Interesting

    How many people went from paper millionaires to "LOL..wut?" during this time?

    The only good thing about the .bomb was that it separated the wheat from the chaff, in that all the little monkeyboys who thought getting their MCSE meant $85k+/yr are no longer in the industry, for the most part.

    Basically, after the .bomb, the only people left were the good ones.

    --
    Sent from your iPad.
    1. Re:the dotcom boom by mikael_j · · Score: 5, Interesting

      Actually, my experience from working tech support here in Sweden in the years after the dot bomb was that a lot of the incompetent ones entrenched themselves in "safe" positions and focused on job security and climbing the corporate ladder, it's amazing how many completely inept "senior" sysadmins there are that need to call in an expensive consultant just to make basic configuration changes to systems that they're supposed to be experts on.

      --
      Greylisting is to SMTP as NAT is to IPv4
  4. Being naive, I lost a lot of money that year by cytoman · · Score: 4, Interesting

    I hate being reminded of the dot com bubble. I had some good money in blue chip stocks and good mutual funds. I saw people making money like crazy all around me by investing in mutual funds that were heavily into tech stocks. So I took out a huge portion of my money and transferred it to the tech mutual funds and very soon after, the bubble burst. I had the misfortune of buying at the peak of the bubble and lost a very large amount of hard earned money. I don't know when I'll get over that.

    1. Re:Being naive, I lost a lot of money that year by AuMatar · · Score: 2, Interesting

      THe US hasn't defaulted on a bond since its inception. If we did default on our bonds, it would mean almost immediate crashing of the world economy and most likely war with China. So yes, I'd be pretty sure- in the small percentage chance you're wrong, you probably won't live long enough for it to matter.

      --
      I still have more fans than freaks. WTF is wrong with you people?
    2. Re:Being naive, I lost a lot of money that year by TheNarrator · · Score: 2, Interesting

      If you are into investing in bubbles remember this famous quote:

      "Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited." - George Soros

  5. Kozmo.com by 93+Escort+Wagon · · Score: 4, Interesting

    Seems like we have these retrospectives on the dot-com bubble every 1-2 years - guess it's being driven by all the still-unemployed programmers.

    I will mention (as I do in every dot-com retrospective thread) a bunch of my coworkers did their best to bankrupt Kozmo.com - unintentionally, of course. But with no minimum charge, it was the "go to" place whenever anyone was jonesing for a pint of Ben and Jerry's or even a Snickers bar.

    Oh, and we can't have one of these threads without mentioning Eazel!

    It's amazing how so many of these companies had no business plan whatsoever. It's REALLY amazing that, back then, some people were actually defending this practice! People who asked "what's the long term business plan" were ridiculed as being small minded or being guilty of outmoded thinking.

    --
    #DeleteChrome
    1. Re:Kozmo.com by Darkness404 · · Score: 4, Interesting

      Really, the business plan that worked for most .com businesses and still do, is get bought out. Really, get a million or two for the founders and give the employees early retirement. Plus, if you said "Hey, I founded YouTube" you can bet that you'd get a job, even though YouTube is chronically unprofitable.

      --
      Taxation is legalized theft, no more, no less.
    2. Re:Kozmo.com by Darkness404 · · Score: 2, Interesting

      But that doesn't work when it comes to most internet systems. Its a lot easier and generally more successful if you want to make the most money to find a niche, fill it, offer your company up for sale, until it sells use ad revenue to keep up until they sell to MS, Amazon, Google, etc.

      Yeah, its not a long term plan but its been a pretty successful plan, just ask the founders of YouTube, Neopets, Picasa, and any number of sites or products acquired.

      --
      Taxation is legalized theft, no more, no less.
    3. Re:Kozmo.com by Ma8thew · · Score: 2, Interesting

      Please explain where Twitter's revenue comes from.

    4. Re:Kozmo.com by Darinbob · · Score: 2, Interesting

      The problem with the "new economy" of the dot com boom is that people didn't believe this. Smart people didn't believe it either, not just the dumb ones. This isn't just a dot com thing, the trend has been around awhile. For instance, if you go back to the 50's and 60's, the big stocks people wanted to buy were from blue chip companies that gave dividends. That model meant that stock holders got a share of the profits, a classic capitalist model. The stock price may not change very much, but you still get a return on investment and don't have to sell the stocks to make money from them.

      Over time the model has changed so that the big trend is to buy stocks that grow, and you make your money when you sell the stocks. These may not pay dividends because there's no actual profits being made (either bad business model, or because all profits are funneled right back into accelerating growth). Fundamentally from my background in science and engineering, this seems unsustainable. Companies can not grow forever. This attitude towards high growth stocks encouraged changing business trends too: focusing all attention on the actual stock price, increased mergers and acquisitions, hyping companies, etc.

      At the same time, and possibly for similar reasons, there's been a trend away from long term gains towards short term profits. Quarterly numbers are given magnified importance. Day traders scraping up the pennies from extremely short trends.

      The dot com rode both trends. What mattered was growth, and how good you looked today. What you looked like in 2 or 3 years or what your earnings might be was not considered that important to many investors. People who worried about this stuff were considered the chumps still stuck in the old economy. The stupid people just wanted to ride the rising wave forever. The smart people though wanted to ride the wave but jump off before it crashed back down, so they wanted exit plans. Party today, and worry about the hangover tomorrow.

      The recent crash is similar in many ways. Otherwise smart people just can't resist getting on the rollercoaster. Profits are going up and you don't want to look like a chump playing it safe with traditional banking. They probably told themselves they could jump off before things went back down again (just one drink, I can quit any time).

  6. It was a year... by recharged95 · · Score: 1, Interesting

    that everyone thought he/she was a software developer.

    Note, Y2K was also adding gasoline to a fire.

    Funny, the dot-com bubble still lives on: we are still marketing (i.e. exploiting) the same ideas generated from those days (1997-2000). It's 2010, same ideas, just different hardware (multicore cpus, gigabit networks, 3G/WiFi access). Times has changed, but have stayed the same.

  7. SFgirl, chronicling the dot-com boom 10 years ago by Animats · · Score: 2, Interesting

    For those of you who weren't there, see SFgirl, the web site for dot-com party girls.

    Here's the dot-com party list for one week, ten years ago.

    Typical party review: Mediaplex.com

    Always one for a free night time invite into the SFMOMA, sfboy lined up with the rest of the VC bottom feeders and various webtrash last Wednesday evening to try his hand at the new phenomenon sweeping the city called "Let the Dot Coms Pay for Your Drinks". Inadequate staff with bad planning only worked to our advantage as CM slipped past the guestlist list like a bad desktop application business plan past an overzealous venture capitalist. Once inside sfboy experienced the largest spread of food yet to feed the frothing crowds shoved uncomfortably into a small room. Picture fields of ahi, buckets of fresh smoked salmon, oysters galore, cheese from every udder imaginable, sushi, dumplings, and chocolates, oh my! Add several ornate ice sculptures with internal martinis luges and you've got a real crowd pleaser! Hear, Hear, my stomach cries for Mediaplex! Take me in nightly, feed me completely, shower me with your VC cash!

    Inside the museum itself child labor laws were overlooked at several dozen grommets flipped, spun and generally amused the masses with what appeared to be an orphanage filled with circus rats in training. I promptly notified the proper authorities.

    Sfboy relunctantly admits that he has no idea what Mediaplex pretends to posses as a business model but he wishes them well in their attempts to create a virtual circus accompanied by a fine buffet.

    Party Bill: $100,000
    Clowns: 100
    Professional Clowns: 25
    Bars: 4
    Party size: 650

  8. Wow! by Anonymous Coward · · Score: 1, Interesting

    I appreciate the non-FUD related articles that kdawson has been posting. Keep up the good work!

  9. Ahhhh, dot.com by Opportunist · · Score: 4, Interesting

    I spent the dot.com time in a bank auditing company. So I had a perfect view when the whole crap started to crash and burn.

    Assessment of risk was completely off the bat. Everyone thought the internet is the next big thing. That really will take off. Everyone will buy everything online. Soon. Any time now. It's so much easier. And with a concentrated storage, logistics and delivery, you simply HAVE to be cheaper (overhead-wise) than everyone else, and computers are cheaper than brick-and-mortar stores, and no shop rents, and and and... it just MUST be a huge thing! And those loans, they will pay for themselves. Easily. They have no expense, you see? They can all invest it in their computers. And stuff. And what they need. And marketing is so big, it just HAS to take off like crazy!

    Believe it or not, THAT was actually the reasoning behind the unsecured multi million loans! Everyone was so hyped up about how easily they should be able to recover their investments. Hell, NOT throwing money at them would have been so stupid because everyone else did it and you just can't stay out of it because then your revenue would be lower and nobody would give you money (sounds familiar? It reminds me a lot of the current "we had to do those high risk businesses because else we could not offer those insane interest rates and if we didn't, nobody would have invested with us... It's the same bull all over again).

    What appearantly everyone failed (or refused) to see was that a lot of these people had little more than a pipe dream for a business plan and no experience with running a business whatsoever. We'll certainly hear a lot of stories of people who worked at dot.com businesses at the time. Tell me: These were startups, right? How many had expensive paid-by-company lunches or parties? What cars did your bosses drive, at company expense? Where was your office, and how was it furnished? What PR stunts did you stage?

    That's not how you "invest" money. That's how you squander it. And that's what made the bubble burst.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    1. Re:Ahhhh, dot.com by Vaphell · · Score: 2, Interesting

      Peter Schiff (investor who saw the recession coming from miles away - look him up on youtube) described his experiences from the nasdaq bubble era when he started his own company. He tried to find clients and convince them to sell dotcom stocks that were about to crash and invest in some reliable oldschool industries but people didn't listen to him. He said that some startup companies were valued higher than the whole New Zealand stock market.
      "What would you prefer to own? a part of the whole country or a part of some startup without any business plan?"
      but people were batshit insane and all they wanted was internet stocks...

  10. Re:Where were YOU when the bomb dropped? by oldhack · · Score: 3, Interesting

    Saw the ship sinking, jumped it and went on extended cheap backpacking. Rode out good part of the bust. Good times.

    --
    Fuck systemd. Fuck Redhat. Fuck Soylent, too. Wait, scratch the last one.
  11. Teasury bonds by Anonymous Coward · · Score: 1, Interesting

    You do realize the US is close to bankrupt right? I would diversify fast if I were you...a good mix of international and US mutual funds would be good.

  12. Re:Where were YOU when the bomb dropped? by spun · · Score: 3, Interesting

    Hehe, yeah, just a little joke. In reality, we had a state of the art integrated membership, document management, inventory, and point of sales system, hosted on a server with encrypted hard drives, in a locked and booby trapped closet, with hidden kill switches placed in strategic locations around the club, at foot level so we could kick them if the cops threw us up against the wall. Stoned or not, it was some of my best work. :)

    --
    - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
  13. Comment removed by account_deleted · · Score: 4, Interesting

    Comment removed based on user account deletion