The Bubble Era
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Goin' Dot Com! - The Musical

The Bubble Era:

In the early 1870's, two guys named Alexander Graham Bell (friends called him 'Al') and Elisha Gray (friends called him 'Mr. Gray') fought over the patent to the telephone.

Wait! That's too far back…

In December 1901, Guglielmo Marconi transmitted a wireless signal…

Wait! That's still too far back…

In 1969, the US Department of Defense established ARPANET, the precursor to the Internet…

Come on! Just get on with it already… 

On August 9th 1995, a small technology company called Netscape Communications sold shares in an Initial Public Offering (IPO). The fledgling software company had developed a technology that could enable billions of consumers, but it still lacked meaningful distribution channels, a track record of profits, consistent cash-flow figures and a credible customer base. Furthermore, no one, not even the omniscient securities analysts, knew what being online really meant in financial terms. The word "Spam," still only referred to a canned meat of dubious origin. And, at the time of Netscape's IPO, the financial implications of the Internet's business space were as mysterious as the meaning of "pork shoulder."

But Netscape did sell two things, potential and promise, and that manifested itself from Wall Street to Silicon Valley. Entrepreneurs, technologists, individual investors (day traders!), investment banks, marketers and the media all converged to fuel the era. The Dot Com boom was not a fad, but a certifiable phenomenon.

It seemed that millionaires were being created as fast as web pages could be posted. People traded in their chef's apron, packaged goods sales jobs and associate partner titles for positions named "New Media Business Development Director," "Content Services Group Manager" and "Marketing Evangelist." WebVan hired away so many UPS drivers by offering stock options that the established delivery company had concerns about a momentary employment crisis. Those who kept their traditional jobs were impacted as well. They were stuck in traffic jams, confronted by exploding real estate costs, crowded restaurants and a relentless assault of media images. Jeff Bezos, Amazon.com's CEO, was Time Magazine's 1999 "Man of the Year;" a distinction achieved without ever having led his company to one quarter of profits.

Some Stats of "The Boom:" 

  • On July 17, 1995 - the NASDAQ broke 1,000 for the first time. Twenty three days later (8/9/95), Netscape Communications IPO'd and closed at 59 on its first day of trading.
  • From August, 1995-2000, almost 400,000 people relocated to the SF Bay Area to work in the "New Economy."
  • Over that same 4.5 year time-span, over 1,100 venture backed companies went public.
  • In December, 1996 - Alan Greenspan described the stock market boom with the words "irrational exuberance."
  • In 1998, new Internet related securities increased by 242% in value. By comparison, non Internet IPO's grew by only 15% over the course of that same year.
  • In 1999, American households' net worth went up 14.1%.
  • Super Bowl XXXIV (1/30/00) featured 17 in-game advertisements (out of 36) by "New Economy" companies. Average cost of a 30 second ad was $2.1 million. Some of the companies that advertised: Pets.com, Monster.com, Hotjobs.com, Ourbeginning.com, Computer.com, KForce.com, Lifeminders.com, E-trade and Screamingmedia.com.
  • On March 10, 2000 the NASDAQ closed at its all-time high of 5,048.
  • In 2000 - The Industry Standard billed more ad pages than any other US publication.

 Some Stats of "The Bust:"

  • By the end of 2001, 762 online firms had folded.
  • The NASDAQ lost 63% of its value, or four trillion dollars, by March 20, 2001.
  • Yahoo's market capitalization went from $150 billion in March of 2000 to just under $10 billion one year later.
  • The Industry Standard went out of business in 2001.
  • By 2002, 22% of 1,842 venture backed firms from 1999 had already closed their doors and over 150,000 Dot Commers had lost their jobs.

  Beyond "The Bust:" 

  • Internet advertising, which had been $1 million in 1994, totaled $9.6 billion in 2004.
  • Nielsen Net ratings estimated that 204.3 million Americans had Internet access in 2004.
  • Forrester Research forecasted that e-Commerce transactions would reach $168 billion in 2005 and $316 billion by 2010. They first exceeded $1 billion in 1996.
  • Yahoo's market cap (June, '05) exceeded $51 billion. Google's surpassed $78 billion. eBay, Amazon and many other 'Bubble' era companies were also thriving.
  • It is indisputable that the Internet has changed the way we store, retrieve and share information. It also has changed the way we shop, even if we don't order 50 lb. bags of dog food online.