The True Story of the Internet- Dot Com Bubble

The Internet has turned our existence upside down. The new phase of capitalism is upon us, the age of e-commerce and age that change the way that business works, the way we buy and sell an age ushered in by a transformative technology the World Wide Web. The early customers were really taking on to the service very quickly then we thought, it would take a long time for people to kind of change their mindset. It went unnoticed on Wall Street were certain analysts struggle to discover just how fast the web is spreading.

The rise of e-commerce has radically transformed the way the world does business at every imaginable level-from the smallest of small businesses taking its first hesitant step into the online marketplace to the cut and thrust of global competition, where the biggest online players vie to dominate the market.

The Internet gathers momentum as it goes which is to say as the number of users increases the usefulness of network increases and it becomes even more compelling overtime for new users to join the network by the middle of 1990s. It’s all about the connection where if 3 users are there then there are 3 connections, if 10 then 45, and if 100 then 5000 and number goes on.

The two reasons that led to the Dot-Com Bubble burst in late 1990’s is the use of the metrics that ignored cash Flow and significantly overvalued stocks. Many analysts focused on aspects of individual businesses that had nothing to do with how they generated revenue or their cash flow. In addition to focusing on unnecessary metrics, analysts used very high multipliers in their models and formulas for valuing Internet companies, which resulted in unrealistic and overly optimistic values.

This huge crash in the market had affected all the companies and suffered trillions of losses for US but in spite of this big companies like Amazon.com and eBay were creating a whole new model, when based on taking the Internet and harnessing the power of the great mass of individuals. The idea of e-book of amazon which had suffered initially but Bezos actually stated the profits didn't matter for the Amazon for losing money indefinitely, he was saying that informative gold rush land grab moment in the development of web profits could and should be sacrificed temporarily in favor of rapid growth strategy and now it’s the largest book store in the world. We can never forget about eBay who started selling items from the garage and now it’s the biggest online bidding platform for used stuffs where buyers and sellers trading obscure collectables have been gathering dust in garages and attics around the country.

These companies started from the scratch and they fall too, but they have the experience of terrible crash. They have the experience so that they don’t do the same mistakes again. They recognized customer needs and satisfaction that’s why they are global multinational corporation. The Amazon and eBay IPOs made Jeff Bezos and Pierre are richer than crisis on paper at least but they also had an even larger offensive, the IPOs made them famous as their story spread inspired legions of interiors Business School students from across the country who suddenly started picking up their cars.

Thus, Dot coms didn't die in vain but threw themselves on the bonfire which created a bigger flame, as a result many jobs were lost, companies failed but it's also true that out of that many new companies were created, became durable and the economy was genuinely transformed the concept of creative destruction.

Once a wise man truly said, when a technology achieves amenity when it becomes ubiquitous and essential it disappears, it becomes invisible, think of electricity, think of airplanes and automobiles and air conditioning like the railroad tracks crisscrossing the country, the web is becoming the foundation of our economy carrying us long to our destination so smoothly and efficiently we don't even realize how fast we're moving.