1. The Dotcom
Boom,
10 Years After
On March 10, 2000, the Nasdaq peaked at 5,048.62.
Then it promptly nose-dived, never to see
that level again. Here’s a look back at the era that
launched—and crushed—a million dreams.
by Mathew Honan and Steven Leckart
“No ecommerce company has ever made
a profit. Certainly we will, and the analysts
have us making a profit in 2001.”
—Craig Winn, CEO of “convergence commerce” outfit Value America, May 1999
(The company filed for bankruptcy in August 2000.)

2. Still Busted
A decade after the crash, VC funding and IPOs haven’t bounced back.
$30 B 5000
Venture capital funding
Total offering amount of venture-backed IPOs
$25 B
4000
Nasdaq Composite Index
$20 B
3000
$15 B
2000
$10 B
1000
$5 B
0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
SOURCES: Bloomberg, National Venture Capital Association, Thomson Reuters

3. Where Are They Now?
Catching up with some key inflaters of the technology bubble.
Stephan Shawn Bernie Mary George Frank
Paternot Fanning Ebbers Meeker Shaheen Quattrone
then Founder, then Inventor, then Founder, then Analyst, then CEO, Webvan then Investment
TheGlobe.com Napster WorldCom Morgan Stanley known for Leav- banker, Credit
known for Net- known for Single- known for Being known for Urg- ing the top job at Suisse First Boston
ting tens of millions handedly spark- convicted of con- ing her bank to take Andersen Consult- known for Urging
of dollars when the ing the file-sharing spiracy and fraud Netscape pub- ing to lead an online employees to “clean
online community revolution from after bilking inves- lic, launching the grocery startup; up” files that proved
he started in college his dorm room and tors out of $11 billion. dotcom boom; raising $400 million CSFB got kickbacks
produced the larg- dragging the music before pleading being bullish on from VCs and then for slipping hot
est IPO in history; business into the the fifth “I believe location-based $375 million in an stock to clients.
quitting a year later digital era. that no one will con- mobile services. IPO; quitting before months he had to
after the stock fell cost of settling clude that I engaged now Still a Morgan Webvan filed for behave before his
precipitously. riaa lawsuits in any criminal or Stanley analyst. bankruptcy. obstruction of
age at ipo 24 $26 million fraudulent conduct.” Meeker’s annual talk value of golden justice charge
now Angel invest- now Starting a new, He later pleaded at the Web 2.0 Sum- parachute was dismissed by
ing; producing films mysterious com- guilty. mit is required view- $375,000 a year a judge 12
like Life 2.0, a doc pany with Facebook now Doing 25 years ing for today’s more now Sits on several now Runs a
about Second Life. alum Dave Morin. for nine felonies. sober investors. company boards. merchant bank.
2000 vs. 2010
Philip Josh Sabeer
Kaplan Harris Bhatia
Unemployment rate 24-pack of red bUll
then Founder, then Founder, Jupi- then Cofounder, 4% 10%
FuckedCompany.com ter Communications Hotmail $57
known for Run- and Pseudo.com known for Sell- $38
ning a dotcom known for Dump- ing his company
death pool that pro- ing millions into to Microsoft for
vided a daily shot a pioneering but $400 million on
of schadenfreude; doomed webcasting his 29th birthday, tHen noW tHen noW
turning the site’s site; lavish parties; making a 1,333
software into the Big Brother–ish percent profit off
successful online ad art projects; hold- free Web-based domain registration Hosting (montHly, per mb)
server AdBrite. ing client meetings email. (per year)
$2.58 $0.0005
now His new ven- dressed in drag. now Hoping to
ture Blippy shares now Appearing re-create his for-
information about in the doc We Live mula for success $129 $10
credit card pur- in Public. Trying to with SabseBolo, a
chases with your raise millions for free online telecon-
friends. another art project. ferencing service. tHen noW tHen noW

4. “The new boy is in town; the new boy is taking
over as king of media … I’m in a race to take CBS
out of business.”
—josh harris, ceo of pseudo.com, february 2000
(eight months later, pseudo.com filed for bankruptcy. as for cbs?
don’t miss CSI thursdays at 9 pm!)
“What the Walkman did for music, what the
cell phone did for telephony, Palm will do
for your wireless data world—simply being
connected. Anytime, anywhere.”
—carl yankowski, ceo of palm, august 2000
(yankowski was out by the end of 2001. the company later ceded
its leadership of the pda market to research in motion.)
What a difference a decade makes. note: numbers adjusted for inflation.
ecommerce sales Hard drive storage aeron cHair bandWidtH for Web storage
(annUal) (per gb) streaming video (per gb) (montHly, per gb)
$44.56 $1,309
$1,250
$193
$879
$19.5 b $156 b
$0.07
$0.028 $0.15
tHen noW tHen noW tHen noW tHen noW tHen noW
“Obviously there’s some speculative action
in the dotcom IPO market, but there isn’t
a sign of a fundamental problem.”
—john skeen, director of portfolio strategy at banc of america securities,
december 1999 (no fundamental problem, except for all those newly public
companies that had no clear path to profitability.)

5. Links to Nowhere
Companies come and go, but domain names last forever—as long as someone pays the
registration fee. Here’s where a few dotcom classics send you now.
Alltheweb.com (search engine) -> Yahoo-powered search engine
Beenz.com (ecurrency) -> Domain squatter
Bid.com (auctions) -> Server not found
Boo.com (fashion) -> Travel review site
Contentville.com (online magazine) -> Domain squatter
Estyle.com (fashion) -> Server not found
Feedmag.com (online magazine) -> “Site Temporarily Unavailable”
Geocities.com (community site) -> “Sorry, GeoCities has closed.”
Keen.com (personal advice) -> Offers psychic readings
Kozmo.com (snack and movie delivery) -> Server not found
Napster.com (file-sharing) -> BestBuy’s music-streaming service
Pets.com (ecommerce) -> PetSmart online community
Pointcast.com (push information delivery) -> Flash application library
Scient.com (strategic consulting) -> Domain squatter
Snap.com (CNET Internet portal) -> Applet site for Web page previews�
Xoom.com (community site) -> Money transfer service
“We see Time Warner and AOL as the
sort of classic one-plus-one-equals-three
situation here.”
—AOL president and CEO Robert Pittman, January 2000
(Earlier this year, former Time Warner CEO Gerald Levin said the AOL
acquisition was “the worst deal of the century, apparently.”)
Survivors AltaVista
The first killer
iVillage
The stock of
Lycos
Once a large
search engine is this women’s portal player and
These dotcom pioneers may lack still processing community site owner of Wired
the swagger of yesteryear, but they’re queries—and dropped from $114 .com, Lycos is
still hanging in there. reminding to less than $1 but now a search site
us again why found a lifeline in owned by a South
Google won. buyer NBC. Korean company.
The Knot The Industry The Motley
More than a Standard Fool
decade after its The dotcom bible Long after the
IPO, the Knot starved to death bubble burst,
proves that even on $200 million this investment
if marriage isn’t a year. Now it research haven
always eternal, it’s publishes tech is having the last
still profitable. news online. laugh.
Tripod RedEnvelope Salon
GeoCities razed A bankruptcy filing The stock costs
its online commu- and a new owner less than a candy
nity, but the other mean this gift site bar, but this
go-to site for free can still help you pioneering Internet
Web hosting in find that perfect magazine remains
the ’90s remains something for one of the Web’s
an option. Mother’s Day. sweetest reads.

6. Great Ideas, Bad Timing
The dotcom collapse decimated lots of bad ideas. (Free one-hour ice cream delivery, anyone?)
But many great concepts got trapped in the rubble. Here are some that have struggled back to life.
Great Idea Why It Failed Why It’s Succeeding Now Who’s Behind the Rebirth
Free Ad-supported dialup had Wi-Fi lets providers grant Meraki, municipal Wi-Fi
Internet its day, until Internet free or tiered access
access advertising dried up and without investing a fortune
(NetZero, costs spiraled out of control on infrastructure.
BlueLight) just as consumers began
flocking to broadband.
Free Jimmy Wales’ first Hey, check out all these Wikipedia (and all the other
onlIne encyclopedia venture relied monkeys! We should totally Wiki’d-pedias out there)
encyclopedIa on professionally edited, give them typewriters. Or at
(Nupedia) peer-reviewed writeups least let them edit this stuff
from expert sources. Read: themselves.
time-consuming and costly.
the Yahoo paid $5.7 billion for YouTube built the bridge Amazon.com, Boxee, Hulu,
Internet Broadcast.com, but it died to the broadband era, iTunes, Netflix, Vimeo,
as tV in the pipe. Internet video while media execs eager to YouTube
(Broadcast.com, before broadband was avoid the music industry’s
RealAudio Player like pouring tar through a mistakes agreed to
GoldPass) garden hose. distribute content online.
VIrtual Consumers weren’t thrilled Let consumers spend AceBucks (Facebook),
currency with being paid by one virtual bread the same gold (World of Warcraft),
(Beenz, Flooz) site for actions they took place they bake it: inside Linden dollars (Second
on others, and regulatory game worlds and on social Life), Offerpal
hassles hurt virtual networks.
currency’s prospects.
push PCs with antediluvian x86 Mobile devices, faster CNN mobile app, Facebook,
InFormatIon processors, slow Internet processors, and cheap RAM FriendFeed, iPhone push
delIVery connections, and paltry now push updates to us notifications, Pubsubhubub,
(PointCast) memory struggled to serve everywhere, all the time. RSS, Twitter
push applications. Make it stop!
Illustrations by Quickhoney
“It’s a piece of shit.”
—Merrill Lynch analyst Henry Blodget in an email message to a colleague
about 24/7 Media, dated October 10, 2000, when Merrill had a Buy rating on
24/7’s stock. (The SEC later charged Blodget with securities fraud; he agreed
to a $4 million fine and a lifetime ban from the securities industry.)

7. Postmortem A final assessment of the dotcom era.
search advertising
AWESOME iPod
Kozmo.com
TiVo genome mapping
P2P Jerry Yang, 1996
Johnny Mnemonic Deus Ex The Sims Amazon.com
free massages The Matrix
rooftop parties
eBay buys PayPal
daytrading in
your pajamas
free PCs
Netscape
Vindigo ringtone business
stock options in
lieu of pay, 1998
Moby
eToys
MONEY- Jerry Yang, 2000
BlEEDING luCRATIVE
candy-colored everything
pitchwoman: Whoopi
Goldberg (flooz) pitchman: William
Shatner (Priceline)
typing “http://” optical networking
DNA patenting
Dutch auction IPOs
Pirates of Silicon Valley
daytrading
in public
Web TV domain squatting
stock options in online greeting cards
lieu of pay, 2001 pop-up ads ads
pop-up ads
pop-up
You’ve Got Mail pop-up ads ads
pop-up
Segway
Enron Razor scooter
DigiScents
Mark Cuban
n o n -c om mis sion ed c red its tk h er e
irrational exuberance
Jerry Yang, 2007 Windows 2000
AWful
0 0 0 Mar 2010 illustr ation by Firstnametk Lastname

8. Dot-Communication
Never say something in plain English when you
can bust out an obscure acronym or puzzling jargon.
The technology bubble forged its own lexicon. PaGEs 88–89: aniston: GEtty iMaGEs;
tiCkEr, Pino, jobs, PaGE, Cy-Visor,
GatEs, DisCs, CasE, bEzos, WEbVan,
blaCkbErry: Corbis; nokia, alCatEl,
yanG: blooMbErG
E-Everything Not f2f
PaGEs 90–91: PatErnot, fanninG,
quattronE, bhatia: blooMbErG;
eauctions extranet EbbErs, shahEEn, CoMPutErs, rEno:
Corbis; MEEkEr: jEnny butlEr;
ebusiness intranet kaPlan: julian Cash; harris: josh
harris
ecommerce teleconferencing PaGEs 94–95: yanG 1996, Cuban,
shatnEr, MassaGE, kozMo.CoM,
emall webcast sEGWay, GolDbErG, bush: Corbis; yanG
2007: blooMbErG; Matrix, PiratEs:
EVErEtt DiGital; rooftoP: sEan
emarketing Web conferencing alExanDEr; PEts.CoM: GEtty iMaGEs
eprocurement webinar
etailers
Business Gobbledygook
g Commerce CrM (customer relationship management)
brick-and-mortar data-mining
click-and-mortar data-warehousing
eyeballs Dss (decision support system)
hits ECM (enterprise content management)
impressions EDi (electronic data interchange)
marketspace ErP (enterprise resource planning)
m-commerce Etl (extract, transform, and load)
sticky olaP (online analytical processing)
oltP (online transaction processing)
Media supply-chain management
information broker Van (value-added network)
portal
vortal
walled garden
E “We are the good guys.
X2Y We are on the side of angels.”
b2b (business to business)
—Jeffrey Skilling, CEO of Enron, June 2001
b2C (business to consumer) (The company’s massive accounting fraud was revealed shortly
thereafter. Skilling was convicted of 19 felonies and is now
b2E (business to employee) appealing his 24-year sentence to the US Supreme Court.)
b2G (business to government)
C2C (consumer to consumer)
G2b (government to business)
G2C (government to citizen)
G2G (government to government)
P2P (peer to peer)
n o n -c om mis sion ed c red its tk h er e
“Things will pick up again, because not even
Alan Greenspan can stop the Internet economy.”
—Larry Kudlow, CNBC host, February 2000
(Indeed, not even Greenspan could stop the Internet
economy—from tanking.)
il lustratio n by Firstnametk Lastname Mar 2010 0 0 0