'90s Dot-Coms — Where Are They Now? 206
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."
Business didn't work because... (Score:5, Insightful)
Re:Business didn't work because... (Score:4, Insightful)
Oh, the ironing. (Score:5, Insightful)
In case it's not been said before, thank you for having honor and respecting your investors.
Fundamental flaw (Score:5, Insightful)
I pick on facebook, but there are plenty of other examples to be found.
Where are the stupid investors now? (Score:5, Insightful)
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.
Re:Oh, the ironing. (Score:5, Insightful)
Those who saw what was coming and ran with the cash did well, and in so doing demonstrated that they had a superior grasp of the nature of the dot com boom/bust event.
The IT industry has been seriously cut throat from the start, only those prepared to bend rules and be occasionally brutal to the competition or their investors have emerged as winners.
Someones bound to bring up googles famous 'do no evil' statement. I ask you though, would that ever have been said if the person who wrote it on the whiteboard wasn't aware that either evil had been done, or was likely to happen?
Personally I can't believe that google got to where it is by being all sweetness and light.
Re:Fundamental flaw (Score:5, Insightful)
But since no one can see into the future its impossible to tell if the company is over or undervalued right now. Personally, I think facebook is monstrously overvalued and whatever earnings potential investors see is due to a lack of understanding of social networks or the frugality of users. They perceive it as some penultimate repository of personal information that can somehow be funneled into directed-marketing, the 21st century advertising buzz-concept that will revolutionize how all companies do business. Of course they fail to understand that kinds of people on facebook are the same sorts of people that have grown numb to almost all advertising, watch shows online, buy commercial-less dvds etc. A friend recently showed me a rather ridiculous advertisement that was directed at him because of some esoteric and fake interest he had listed on the site. The ad was ridiculous, but more telling was that I was actually surprised there were ads, I'd never noticed them before since I just completely tuned them out.
Whatever happened to VIOS? (Score:3, Insightful)
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.
Re:Fundamental flaw (Score:5, Insightful)
Did Microsoft ever recoup their investment in Internet Explorer?
Re:Fundamental flaw (Score:5, Insightful)
You'll look at some who were really nothing more than a website that did some neat trick. It'll mentioned that they blew through $50 to $70 million in VC in a couple years.
What they hell were they doing with all that!?!? Any business that was thinking of being thrifty at all (which in general: successful businesses will save money where they can) could have stretched that MUCH, MUCH farther.
You don't understand (Score:5, Insightful)
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.
Re:Oh, the ironing. (Score:5, Insightful)
Re:Fundamental flaw (Score:5, Insightful)
'90s - Dot Coms
'00s - Housing/Mortgages/More Junk Bonds
The same "entrepreneurs" get away with it every time. The late adopters get there bit, but aren't smart enough to get out.
And then John Q. Public is told (after all the initial investors are ready to entrap them all) that such investments are "sure-fire" and the value will "only go up".
It's not even a question of "How do were prevent this from happening again?" but "What will the next 'big thing' be?"
Seasonticket.com (Score:2, Insightful)
dont forget the success too (Score:2, Insightful)
Re:Fundamental flaw (Score:5, Insightful)
You forgot one:
'20s - Radio
The 1920s stock market bubble had a number of features in common with the 1990s bubble. There was a trendy new technology, lots of VC folks desperate to throw money at any company that had anything even remotely to do with it, and lots of people lost their shirts when the bubble burst.
...laura
Re:Oh, the ironing. (Score:3, Insightful)
Re:Oh, the ironing. (Score:4, Insightful)
Re:Business didn't work because... (Score:4, Insightful)
Re:Stamps.com (Score:5, Insightful)
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.
Re:"Too early for their time..." (Score:2, Insightful)
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.
Re:Where are the stupid investors now? (Score:3, Insightful)
Re:Business didn't work because... (Score:5, Insightful)
The companies thought they immune to the rules regular business had to follow. It all became a grand pyramid scheme: You set up on a shoe string, get people to advertise so you don't have to charge visitors and (add some pixie dust) = Profit!
Like them or hate them, Amazon did things right. I remember reading news where all the numbers wonks were shaking their head over Amazon's meager profits. Oh, they were making money all right, but they were smart enough to sink it back into their business. And, sure enough, five years later (the average time any other business takes to show a profit) they started making money hand over fist and haven't stopped.
The computer chain, Egghead, did something even more radical. They closed all their brick and stick stores down and went to a strictly on-line presence, New Egg. It ended up being a good risk, CompUSA and others had come along and Egghead's retail prices were too high to the superstores. Online, they didn't have to maintain the physical presence and they were able to reach a lot more customers with lower prices. Like Amazon, they also kept shipping costs down. Now it's CompUSA that is floundering and closing their stores.
Both of these companies have succeeded because they 1) Had something that appealed to broad number of people; 2) Were able to offer products at a discount--in some cases where there had been little or no discount; 3) Kept shipping costs to a minimum--why the catalog companies haven't been smart enough to follow suite, I don't know--they're going to go the way of the dodo bird; and most importantly 4) Have really good customer service. A person doesn't have the comfort of just walking in the door with a return or a complaint. There's a certain amount of trust you've got to have that you're not going to get shafted by whomever you buy something from on-line. And reports of bad service sprout like weeds.
Re:Ughhh (Score:3, Insightful)
You seem to think that "making as much money as possible for your shareholders" is destructive greed. It is not.
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.
Re:Ughhh (Score:3, Insightful)
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.
Re:You don't understand (Score:1, Insightful)
Re:Fundamental flaw (Score:3, Insightful)
You see, the "smart guys" hired people to be "mortgage agents" and suggest, imply, or downright lie to their potential home-buyers that they would be able to turn around and sell their homes on sub-prime loans before the prohibitive interest rates kicked in. They told them that they could "invest" in just about any home, live there for a year, sell the home (to someone else doing the same thing), make a profit, and be closer to actually affording a real home backed by real bank money. If you can remember, *everyone* was saying that the value of property *can only go up*.
(The easy access loans and the quick turn-over combined to make artificial demand thus increasing the price of homes.)
Now, those who were pushing the mortgages in person or on the phone were simple employees making massive commissions on each lock-in. Whether or not they knew that they were feeding an industry bubble doesn't matter -- but their mortgage company owners knew. THEY didn't lose their shirts.
That's just one facet, though. That's just the ground floor. For the most part, banks and hard money were not backing the loans. Instead the debt was balled up and sectioned off and sold as a couple forms of bonds to a good variety investors who were told that they were highly reliable and would pay off very well. The debt bunches were sold and resold and resold (each reseller making money off the transaction). Of course, as you can tell by the foreclosures, the debt was extremely high risk. Those who were suckered into buying homes whose prices had inflated miles past their actual value are now stuck paying off more debt than the home is worth with insane interest prices. Or foreclose.
Those who invested in the packaged debt then found out exactly what was backing their investments and found out that they, too, got suckered.
Now, how is this not what I said?