The Dot.Com Bubble Phenomenon: The rise and fall of the first e-stock empire

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When the internet first made an appearance in the business world, outside of government and military use, the term dot.com was introduced. The technical term “.com” is defined as a suffix used to describe a company that uses the internet as a primary or only marketplace for transfer of goods and services. It was being used as a suffix to the several existing web addresses. It only took a few months for .com websites to become the dominant form of business transaction (Simpson & Simons, 1998). The phenomenon behind this story lies in the rapid rise and fall of the dot.com companies and the players, events, and mindsets that accompanied the bubble boom and bust (Simpson & Simons, 1998). In 1995 Netscape was one of the first dot.com…show more content…
Therefore, with the mania which swept the dotcoms came a massive amount of short term expectations which fuelled the bubble, or the “gold rush.” Overall, according to the Wall Street Journal, expectations are considerably market-based (Wall Street Journal). With the introduction of dot.com businesses, many rules were changed in the way global financial professionals used indicators to foreshadow the future prosperity of companies and shares. The old-style economy players were already trying to play the “internet game” by shifting their standard of e-commerce. An important investigation of the Wall Street Journal found that a strong belief and faith in the dot.com companies would be the blue-chip of the future and eventually helped spread the bubble. The old economy rules were not applicable anymore to the Dot.com bubble situation of financial markets, where most of the principles got lost and forgotten (White C. & Schreb, 2000). Now that the beginning has been laid out, it is important to show how the atomic bomb of dot.com shares – commonly referred to as a bubble – was created and ignited. There are many reasons for the initial failure in the face of the World Wide Web. The principal reason investors were so hasty investing in dot.coms is they thought the odds/statistics and probability were in their favor for making capital gains on their investments. Obviously, this is why most investors choose to part with their money but there was strong reasoning

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