The Internet Bubble (1995 – 2001)
The 1990s dot-com bubble is the most recent in living memory. ARPANET was established to network government computer systems during the Cold War between the US and USSR. It allowed researchers at government labs and universities to share defense project information. Soon after, the internet’s scope and reach moved beyond the defense industry to commercial organizations. Tim Berners-Lee devised the hypertext protocol for distributing linked information in 1989. It became the interface for engaging with the internet and gave rise to the contemporary world wide web and browser interface. After that, private commercial web use exploded. Google, eBay, PayPal, and Amazon rose during the Cambrian explosion of technology and business models. Dot-com enterprises tried to capitalize on the internet excitement to sell everything from dog food to virtual currencies. For every Google, there were one hundred fails based on faulty economics and technobabble. Online pet supply retailers like pets.com typified the era’s excesses. They spent millions on user acquisition despite taking a loss on practically every sale, spending heavily on super bowl ads including a talking sock puppet promoting buying dog food online. In February 2000, while still unsuccessful, the company went public on NASDAQ, marking the zenith of dot-com craze. Nine months later, it collapsed. At the pinnacle of the bubble between 2000 and 2001, hundreds of internet-related companies went public globally, only to have most of the market value fast evaporate after the September 11 attacks and the economic reality of the unsustainable business models. By 2002, $5 trillion in market capitalization was erased, ending the dot-com boom.