Dot-com

Dot-com (also dotcom or redundantly dot.com) companies were the collection of start-up companies selling products or services using or somehow related to the Internet. They proliferated in the late 1990s dot-com boom, a speculative frenzy of investment in Internet and Internet-related technical stocks and enterprises. The name derives from the fact that many of them have the ".com" TLD suffix built into their company name.

Aftermath

On January 11, 2000, America Online, a favorite of dot-com investors, acquired Time Warner, the world's largest media company. Within two years, boardroom disagreements drove out both of the CEOs who made the deal, and in October 2003 AOL Time Warner dropped "AOL" from its name. The acquisition thus became a symbol of the dot-coms' challenge to "old economy" companies and the old economy's ultimate survival. The revolutionary optimism of the boom faded, and analysts once again recognized the relevance of traditional business thinking.

Related Topics:
January 11 - 2000 - America Online - Time Warner - CEO - October - 2003

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Several communication companies, burdened with unredeemable debts from their expansion projects, sold their assets for cash or filed for bankruptcy. Worldcom, the largest of these, was found to have used accounting devices to overstate its profits by billions of dollars. The company's stock crashed when these irregularities were revealed, and within days it filed the largest corporate bankruptcy in US history. Other examples include NorthPoint Communications, Global Crossing, JDS Uniphase, XO Communications, and Covad Communications. Demand for the new high-speed infrastructure never materialized, and it became dark fiber. Some analysts believe that there is so much dark fiber worldwide that only a small percentage of it will be "lit" in the decades to come.

Related Topics:
Bankruptcy - Worldcom - NorthPoint Communications - Global Crossing - JDS Uniphase - XO Communications - Covad Communications - Dark fiber

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One by one, dot-coms ran out of capital and were acquired or liquidated; the domain names were picked up by old-economy competitors or domain name squatters. Several companies were accused or convicted of fraud for misusing shareholders' money, and the U.S. Securities and Exchange Commission fined top investment firms like Citigroup and Merrill Lynch millions of dollars for misleading investors. Various supporting industries, such as advertising and shipping, scaled back their operations as demand for their services fell. A few dot-com companies, such as Amazon.com and eBay, survived the turmoil and appear to have a good chance of long-term survival.

Related Topics:
Liquidated - Domain name squatter - Fraud - U.S. Securities and Exchange Commission - Citigroup - Merrill Lynch - Amazon.com - EBay

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