Introduction to e-Commerce
Dot Com Bubble
Dr. Michael D. Featherstone
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Dot Com Bubble 1995-2002
The dot-com bust of 2000-2002
And then everything changed. Fast-forward to the
dot-com crash of 2000-2002. Venture capital
investments started dropping immediately,
borrowers defaulted, bond-market froze, and stock
market started to tumble first slowly, and then, after
September 11, it dropped down very fast, just like
the falling comet. Companies started disappearing
left and right, and the party quickly came to an end.
Prospects disappeared, analysts changed their tune,
and internet became a commodity.
http://www.zacks.com/blog/comments.php?cid=8907
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Dot Com Bubble 1995-2002
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Dot Com Bubble 1995-2002
Roughly between 1995 and 2001, a speculative bubble known as
the "dot-com bubble" occurred, during which Western stock
markets saw an increase in value from the growth of the Internet
sector. Bubbles such as this have occurred through out history: in
the 1840s, for example, manic buying in the field of railway building
lead to a stock market bubble which burst devastatingly in the
1850s. When the dot-com bubble burst in 2001, the result was a
mild but long-lasting recession in the Western world.
NASDAQ STOCK LISTING
National Association of Securities Dealers Automated Quotations
Many technology firms are listed on NASDAQ
http://www.domainmonster.com/editorials/dot_com_bubble/
Because of the unknown and innovative nature of online business,
many standard business models were abandoned in the early 90s
in favour of radical new models which focused on brand-building
and networking before profits were even considered. The idea was
to increase market share whilst operating at a loss. The novelty
value of these companies, and the difficulty in valuing them
properly, led to an incredible exuberance with which stocks in the
new dot-com companies were purchased. This in turn led to them
being increasingly over-valued, perpetuating the enthusiasm for
buying stocks.
The bursting of the dot-com bubble occurred, numerically, on 10th
March 2000; the NASDAQ fell slightly after this peak, but this was
attributed to correction by most market analysts.
Reprinted with permission from the author
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Bubble impact on Stock Valuations
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Consistent Growth of the Web
Note that this chart shows growth in EXPONENTIAL TERMS.
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Growth of e-Business (Sales)
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Dot Com Bubble 1995-2002
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Evolution of the Web
Early Period – Academic/Government Research
Public Awareness – AOL Primacy
E-Commerce/ E-Business Phase
Ascendance of Search
Advertising/Google/Entrepreneurial Phase
Web 2.0
Ascendance of Social Media
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This Concludes Today’s Presentation
Thank you for your attention
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