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.

Thinning the herd

Over 1999 and early 2000, the Federal Reserve had increased interest rates six times, and the runaway economy was beginning to lose speed. The dot-com bubble burst, numerically, on March 10, 2000, when the technology heavy NASDAQ Composite index http://dynamic.nasdaq.com/dynamic/IndexChart.asp?symbol=IXIC&desc=NASDAQ+Composite&sec=nasdaq&site=nasdaq&months=84 peaked at 5048.62 (intra-day peak 5132.52), more than double its value just a year before. The NASDAQ fell slightly after that, but was attributed to correction; the actual reversal and subsequent bear market may have been triggered by the adverse findings of fact in the United States v. Microsoft case in the US. The findings, which declared Microsoft a monopoly, were widely expected in the weeks before their release on April 3.

Related Topics:
Federal Reserve - March 10 - 2000 - NASDAQ Composite - Bear market - Findings of fact - United States v. Microsoft - Microsoft - Monopoly - April 3

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Another reason may have been accelerated business spending in preparation for the Y2K switchover. Once New Year had passed without incident, businesses found themselves with all the equipment they needed for some time and business spending dried up. This correlates quite closely to the peak of U.S. stock markets. The Dow Jones peaked in January 2000 and the Nasdaq in March 2000. Hiring freezes, layoffs, and consolidations followed in several industries, especially in the dot-com.

Related Topics:
Y2K - January 2000 - March 2000

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By 2001, the bubble's deflation was running full speed. A majority of the dot-coms have now ceased trading, after having burnt through their venture capital, often without ever making a gross profit, thereby becoming dot-compost.

Related Topics:
2001 - Venture capital - Profit - Dot-compost

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