Companies we missed from the Dot-Com Burst
Posted by gbravo on September 29, 2008 in Business News [ 4 Comments ]
The introduction of the internet brought an entirely new culture to our world in the mid 1990s. The time from 1995-2001 has been called the dot-com boom or the dot-com bubble, a time when countless companies got their big break on the internet, although their success may have been short-lived. The combination of rapid increasing stock prices and availability of venture capital funding allowed for new dot-coms to enter the market. The sudden bubble burst in the early 2000’s caused the sudden downfall of many of these new companies.
Many dot-com companies grew at rapid rates due to the fresh nature of the internet, and stocks for these companies sky-rocketed in a short period of time. As the year 2000 approached, a million new web pages were created every day. Shared investing gave dot-com companies the resources they needed to grow quickly, but those with poor long-term plans ended up folding in a short amount of time. Once the freshness wore off, companies’ profits never progressed, and some customers began turning back to companies that gave them exactly what they needed, rather than ones that seemed new and exciting.
So which companies are we missing in the world today that never made it in the dot-com struggle? Below is a list of companies, who couldn’t survive the dot-com burst. They either sold-out, went bankrupt or simply fell apart altogether:
- Boo.com – Boo.com’s intention was to sell branded fashion apparel over the Internet, but after spending $188 million dollars in just 6 months it eventually had to liquidate and went bankrupt in May 2008. Boo.com is now a travel review, hotel review, and travel guide site with various trip planning utilities.
- Beyond.com – A combination of PhillyJobs.com launched in 1998, and 4Jobs.com acquired n 2000, this job generation site provided professionals with a resource for finding new jobs. In 2002 they transitioned and re-branded themselves into Beyond.com, who expanded to include more than 1,000 job search sites with the acquisition of MegaJobSites.com.
- Boxman AB – Boxman AB was a European based online retailer of home entertainment with the goal of the being the European Amazon.com. After limited success in the fresh market, Boxman AB went bankrupt in 2000.
- CDNow – CDNow became a retail website in September 1994, much earlier than most dot-com startups. CDNow began struggling in 2000 and was acquired by Bertelsmann for its new BeMusic internet music group. In 2001 Amazon.com bought CDNow and is successfully running it to this date.
- Pets.com – Pets.com was known best for its mascot the Pets.com sock puppet, rolling out city by city marketing campaigns. The company grew rapidly during the dot-com boom, and aired its first national commercial during the 2000 Super Bowl which cost the company $1.2 million. The company was not profitable and continuously searched for additional funding for venture capitalists. After no success in acquiring additional funding Pets.com closed its doors on November 6, 2000, leaving 320 people unemployed.
Who did survive?
Even though the early 2000s was a tough time for most dot-com companies, it is estimated that 50 % of dot-coms at least made it through until 2004, but then weren’t able to pull it back together in the end. However, there are some that survived the dot-com burst and are still doing well today, though they most likely took some sort of a fall during the burst. Amazon.com, Priceline, and eBay have proven they can weather the storm, as well as Travelocity, Paypal, and Yahoo!.
Even though there were many casualties in the dot-com boom, our world wide web is a better place because of all the lessons learned. Many great, new ideas were formulated in the late 1990s as entrepreneurs began seeing the potential that the internet provided. In many cases, as companies learn from past mistakes, investors are becoming more able to carry out the great plans of the dot-com period.
Additional Companies who didn’t make it alive: