Dot COM Bust? What is that?

[EbookLover]

In another thread, someone was saying how they have domains and they can never sell them because they get attaached ot their domains too easily.

One response to that person was...

You don't have to sell them any time soon if you don't want to. Unless there is another dot com bust the values will only increase.

So my question is what constitutes a dot COM bust and what makes it happen?

 

[ponyone]

I'm no expert, but back in the late 90's there was a dot com bust. This had to do with online businesses... not domain names. A lot of online businesses made a killing.. and then they got killed. Not sure why it happened. I guess just like everything, it wipes itself clean when it gets too bloated and starts again. Stock market crashes, video game market crashes.. dot com crashes.

I don't think it will ever happen again.

 

[MistaPrimeMinista]

Dot Com bust ?
Id say its something we all waiting for :P

 

[ponyone]

Dot com or bust I say. To hell with .nets and .us

 

[Zeeble]

Before the bust there had been huge excitement in the internet. Many companie's saw it as a great investment for the future. As a result many companie's were overvalued by huge amounts, but because more and more money came flooding in from optimistic shareholders these companie's continued to spend and take on more debt.

Of course, once people realised that most internet companie's were grossly over valued they tried to sell out. The rush to sell over valued stocks was so great that many internet firms lost up to 90% of their market cap over a matter of weeks. This really led to the ruin of many firms.

It's pretty similar to the Wall Street crash of 1929.

 

[EbookLover]

So how could there ever be another dot COM bust? What could cause it?

 

[deet]

So how could there ever be another dot COM bust? What could cause it?

well, if it ever grows to be as big as it once was perhaps ther could be another down fall. But, imo that could take a few more years of rebuilding.

 

[mole]

History tends to repeat itself, people collect .COMs by grossly overpaying for them, get carried away with hope, get their vision all blurry as to what is good and bad, think click fraud is a cool thing to do to milk the suckers with low quality clicks ... especially from children and teenagers who tend to have ultra clicky fingers.

Google shares plummeted recently, one primary reason was because of growing market realisation that click fraud is a cancer that will eventually whittle PPC, and its accompanying revenue, down to the ground.

Interesting times indeed, the dotcom rebust (built on PPC) is not just a notion, its a writing on the wall a mile long.

 

[holeinone]

So how could there ever be another dot COM bust? What could cause it?

The dot com bust was really about Internet stocks. They went up; they went down ... and the media ate it up.

Venture capitalists pumped a lot of money into companies and promoted them like crazy. Then out came the IPO, people rushed to buy the stocks, the venture capitalists made their money ... and then everyone discovered that the companies had no workable business plan and - presto! - dot com bust.

What does this have to do with getting a website? The dot com bust has absolutely nothing to do with the hundreds of thousands -- perhaps millions -- of people who quietly went about building websites and making money online. They built their businesses and sold their goods and services. Apparently this hard work and good fortune was not -- and still is not -- newsworthy. Go figure.

This is not to belittle the people caught up in the dot com bubble -- would that it had worked out for them -- but just to clarify the misperception that the dot com bubble and bust had anything to do with regular old business on the Internet, or that "no one can make money on the Internet anymore".

http://dianev.com/web-design-help/web_design_basics/dot_com_bust_online_business.html

http://www.siliconbeat.com/entries/2005/03/09/five_years_after_the_dotcom_bust.html

 

[EbookLover]

SO from what I gather, it seems to me that some important elements would have to be present if there were to be another dot com bust - human stupitity and poor speculation & ill advice based on greed, ignorance, and perhaps a few other uncontrollable human flaws. I guess the whole system is based on just that, maybe, and therefore, doomed. But then that pretty much can sum up anything that involved humans, right?

 

[cache]

if US's ecomony is going down hill, then .cn and .in will be the new hot domains or the unified root thing will prosper etc.

Anything new such as this domain thing, will have high risk of failing/changing. It is differnt than the real estate market that people need a physical space to live and the physical space is truely limited. This virtual space is quite subjective IMHO.

 

[primacomputer]

The dotcom bust came in 99/2000 when the bottom fell out of share prices in internet companies. The bust had nothing to do with domain names whatsoever. It was simply named after the companies where investors lost their money, most of which had a dotcom(.com) in their name.

Google shares plummeted recently, one primary reason was because of growing market realisation that click fraud is a cancer that will eventually whittle PPC, and its accompanying revenue, down to the ground.

Interesting times indeed, the dotcom rebust (built on PPC) is not just a notion, its a writing on the wall a mile long.

Normally the name market is almost exclusively influenced by other markets, in particular the number and success of tech startups. Recently, however, PPC has provided an easy way to monetize names. Despite the constant whining from newbies now has got the be the easiest time in history to get into the name market and make money.

The problem is that PPC is a fundamentally flawed model that is doomed to fail just like it did in the dotcom days. Unfortunately if this happen in a big way before most companies can switch to a performance based model it's likely to have serious consequences for the entire tech market. Even if darlings of the neo dotcom bubble like Google manage to make the transition before the crunch comes the name market is sure to suffer. People will simply not be able to maintain such large portfolios of non performing names when there are no people willing to pay for these non performing clicks.

 

[JMJ]

The reason webmasters use PPC models is because none of the other models worked for years. I did a little test myself recently. I built a parking page of sorts for my casino names. These names were earning $xxx a month parked at fabulous. It's not been publicly stated as such but everyone is under the assumption that fabulous "pays for performance" which is why they can pay higher rates on those names.

I took all of those names and pointed them at my homemade parking page for a few weeks. For those weeks I racked up a total of $0 dollars. I then returned them to fabulous and finshed off the month at $xxx.

My point with this is none of the old ways worked before so why does everyone think they will work now? The PPC naysayers want to say "the advertisers are the ones with the cash" well you're right but we are the ones with the traffic. Back when I first got into the web and built my first site which was only 1 of 2 of it's type back then. I tried every type of program you can imagine and NONE of them made me more than a few cents every month. Here I was a broke wannabe webmaster advertising the likes of Hertz, Avis rental cars, etc. on my site for almost a year and didn't see one dime from any of them.

Did I actually make them anything? I don't know, I never will and never would. To top things off I went to check this site which I sold about two years ago. The owner still has some PPS/PPP text links I put on the site over 3 years ago. Since then I have long forgot about these programs I signed up with. Out of curiosity I went to check and see if they made in money over the years. I figured out my usernames and passwords and logged in to find I made all of around $40 total on 5 different free offer text links. 3 years $40. I won't even get into the 1 year I ran CJ on the site and $0.

If you ask me the end of PPC would be the beginning of the next .com bust. And the reason is because noone can live on $15 a year. Mabey if I took that site which I'm sure gets 3-5k a month with no advertising removed all content and put 1000 text links on every page it would make it worth it.

 

[Zeeble]

So how could there ever be another dot COM bust? What could cause it?

By internet stocks becoming overinflated in value again.

 

[Badger]

internet stock wont get to the stage of the so called .com bust of the late 90's.. (for a start this was no regular boom bust cycle) For the workings of what happened was down to two main reasons,

1. Understanding of the 'web'
2. Overvalued stock

The two were linked, people didnt understand the web, as the learning curve flattened out and people understood the workings of what it took to make a "web site" realisation soon set in that the stock was major league over value.

So a bear market ensued, and the rest of the web, continued its fantastic growth as it does today..

 

[Peter]

The dotcom bust came in 99/2000 when the bottom fell out of share prices in internet companies. The bust had nothing to do with domain names whatsoever. It was simply named after the companies where investors lost their money, most of which had a dotcom(.com) in their name.

Thats not exactly true, it had a huge effect on domain names as well, before the bust people were spending a huge amount on domain names with the hope they would be made instant millionairres. Prices expectations of what price they would achieve fell rapidly thus making alot more premium domain's reachable price wise. Of course since then prices have been steadily increasing again.

 

[primacomputer]

Thats not exactly true, it had a huge effect on domain names as well, before the bust people were spending a huge amount on domain names with the hope they would be made instant millionairres. Prices expectations of what price they would achieve fell rapidly thus making alot more premium domain's reachable price wise. Of course since then prices have been steadily increasing again.

The number of people spending huge amounts of money on all sorts of things dropped following the crash. You can be certain that the sale of jet fresh vine ripened Italian tomatoes declined at the same time. However, you won't find anyone claiming that tomatoes had anything to do with the crash.

 

[Peter]

And what does the sale of "jet fresh vine ripened Italian tomatoes" have to do with the internet?

Domain sales have a direct relationship with the internet. I think it is safe to assume that when the .com bust people lost faith in the power of the internet and that was a major factor in why prices of domain names fell so dramatically.

 

[primacomputer]

"jet fresh vine ripened Italian tomatoes" were sold by numerous companies online before the crash. After the crash sales of the tomatoes plummeted and these companies went out of business. It's safe to assume that after the bust people lost faith in the Internet and stopped ordering their tomatoes online and that was a major factor in why the volume of tomatoes sold online fell so dramatically.

You can say the same about any number of good and services, Internet related or otherwise. The crash affected nearly everything. Being affected is not the same as causing an effect.

Perhaps I was a bit to broad in my statement. Domain names, like tomatoes, do in fact “have something to do with” the dotcom bust. Both were found on planet earth at the time of the crash. Both were affected by it. In this context pretty much everything had “something to do with” the dotcom crash, including millions of people who have never used a computer, let alone the Internet.

 

[JAugusto]

What does bust means?