Wired 1803 10yearsafter

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.)

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

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

“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.)

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.

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.)

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

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

Wired 1803 10yearsafter

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