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At the most basic level, "dot-com" is simply a colloquial term born of the suffix appended to Uniform Resource Locators (URLs), as in But the term has come to stand for a variety of phenomena. By the early 2000s it stood for Internet-based businesses, the business craze born of the outlandish stock boom these companies enjoyed and exacerbated, a certain type of unorthodox business model, and even an era of contemporary economics.

The opening of the Internet to commerce in the 1990s unleashed a flurry of new business possibilities, and no one seemed to know just where it would all land. Still, a palpable sense of optimism was in the air. In many ways, dot-com companies were widely seen as being removed from the "real world." On a literal level, this removal refers to their virtual presence in cyberspace, remote from the brick-and-mortar economy. Figuratively, dot-com firms were famously immuneuntil the tech-market stock bubble burst in spring 2000from traditional forms of valuation and the importance of tried and true business fundamentals. However, in a way their wild-eyed success in the late 1990s fertilized the soil for the vicious backlash against the dot-com economy in the early 2000s.

The speed and extent of the dot-com boom in the late 1990s helped propel this seeming immunity of dot-com companies from such old economy staples as sound business strategies, plans for long-term value and profitability, and attention to macroeconomic warning signs. Dot-coms defied all market logic through the end of the decade, and the flow of cash into the Internet industry seemed nearly endless. The soaring stock prices seemed to lend weight to dot-com entrepreneurs' claims that this was, indeed, a new economy in which the old rules no longer applied.

Valuations were a consistent mystery, with companies registering market values in the hundreds of millions of dollars without ever turning profits. As Business Week pointed out, when Yahoo! Inc.'s market value came in at an astronomical $1 billion in 1997, sober investors might have been wise to disbelieve it. However, had they done so they would have missed out on a massive three-year run that would have generated a fortune.

The tech-market stock bust in early 2000 set off a massive dot-com shakeout, and the Web was littered with sunken Internet companies. Meanwhile, the cultural tone shifted away from dot-com euphoria and toward a more tempered attitude about e-commerce. At least 210 dot-coms closed their doors in 2000. Meanwhile, the dot-com bust had many holdouts sneering at broken dot-com investors, saying "I told you so."


"Getting Over the Dot-Con." Business Week. December 11, 2000.

"Leaders: Is There Life in e-Commerce?" Economist. February 3, 2001.

Mullaney, Timothy J. "Gone but Not Forgotten." Business Week. January 22, 2001.

Wilder, Clinton. "Success: Opiate of Dot-Com Elite." Informationweek. February 12, 2001.

SEE ALSO: Cyberculture: Society, Culture, and the Internet; New Economy; Shake-out, Dot-com

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DOT-COM. SeeElectronic Commerce .