What is the Dot-com bubble● The Dot-com bubble is also know as the Internet bubble and the Information Technology Bubble.● It is the unusual high tide of actual-demand investment of dot-com company or equity investment which happened centering on the market in the United States of America in the 1990s.
Why dot-com bubble happened● In the 1990s, electronic commerce greatly developed and it shock traditional business model.● Additionally, the U.S. low interest rate made easy supply of venture initial funding or investment capital.
The Bubble burst● Interest rate raise of the Board of Governors of the Federal Reserve System triggered the stock price collapsed quickly.● The terror attack on September 11, 2001 accelerated it further.
Result of Bubble Burst● Although the Nasdaq composite index was temporarily over 5000, it fell to 1000 by the collapse of the bubble economy.● The number of the U.S. IT related jobless people in 2002 amounted to 560,000 people.
Companies influence by bubble● Boo.com lost $188 million in just six months● GeoCities purchased by Yahoo for $3.57 billion in January 1999. However Yahoo closed GeoCities on October 26, 2009.
Dot-com bubble of Japan● The dot-com bubble of Japan burst in 2000.● The influence of Japan on the collapse of the information technology bubble centering on the U.S. was very restrictive.
Conclusion● Excessive bubble will certainly burst.