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The Internet Businesses The Almighty Buck

A Look Back At Ten Dot-Com Flops 463

Posted by Zonk
from the they-went-under dept.
climbing_monkey writes "CNET.com has posted what, in their opinion, are the top 10 dot-com flops." From the article: "The most astounding thing about the dot-com boom was the obscene amount of money that was spent. Zealous venture capitalists fell over themselves to invest millions in Internet start-ups; dot-coms blew millions on spectacular marketing campaigns; new college graduates became instant millionaires (albeit on paper) and rushed out to spend it; and companies with unproven business models executed massive IPOs with sky-high stock prices. Of course, we all know what eventually happened to this world. Few of these companies actually made enough money to recoup that cash, and when their investors fled to the hills, these start-ups died dramatic deaths. These are the celebrity victims of the new-economy bust."
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A Look Back At Ten Dot-Com Flops

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  • by linuxbaby (124641) * on Saturday August 06, 2005 @09:54PM (#13261662)
    Linked from TFA is top 10 tech we miss [cnet.com]:
    1. Manned space exploration
    2. Kozmo.com
    3. the original Napster
    4. The Concorde
    5. GM's EV1 (interesting)
    6. The original Palm Pilot
    7. Good keyboards
    8. Wires
    9. LPs
    10. The Newton
    (I would have put kozmo at #1. Those who used it know what I'm talkin' about.) Read the part about the EV1 car, though. Pretty interesting.
    • Kozmo's back--or at least, the same guys who ran Kozmo are back [maxdelivery.com]. Shame about the boring name--I guess they're not hiring brand consultants this time.
    • by lheal (86013)
      I've been going to auctions and estate sales, picking them up for a few bucks a crate. Got about 1500 so far. There's a lot of Montavani and polka stuff, but every once in a while something really interesting, like some old jazz or blues will show up.

      The good ones I clean up using a damp microfiber cloth, then convert to digital.
    • I really like the Compaq keyboards of a few years ago. I have three that I know of and they are all in use.

      One thing they didn't list, but should have listed, is three button mice. I finally gave up trying to find a three button optical mouse last week and ordered a couple of the modern version of three button mice consisting of two buttons and a mouse wheel. I would have much preferred three real mouse buttons.
      • Check out Kensington's StudioMouse [kensington.com]. It has three buttons and a scroll pad. Works a lot smoother than a wheel. I've used them for about 2 years now and they've been great.
    • Eh. I don't understand the obsession that some have with the clicky keyboards. I found one in my closet and it really doesn't seem to be special, on top of having the old AT / DIN-5 connector.

      One argument I've seen is that the membrane switches don't have a correlation between the "feel" of a button press and an actual electrical contact. I get perfect tactile feedback with my Natural Elite keyboard. I've never had it give me false feedback, if the button feels like it "clicked", it actually made contac
      • Most people complaining about bad keyboard just have a bad keyboard. Some $10 piece of junk. They just don't know about the keytronic ergoforce [keytronic.com] yet.

        I had some old, heavy keyboard that was my absolute favorite. Bad enough that I would scour for used ones and clean them up, hoping to get a supply large enough to last through my 'typing career' years...

        Not anymore, thanks to keytronic.
    • My #1 missed tech is the same as the #1 dot-com flop: Webvan. The interface, service, quality of merchandise... everything was top notch. (And of course, for $50 or $75 minimum, delivery was free.) Today's grocery delivery services, at $10 to $15, just aren't worth it. At the same time, my local Safeway is remodeling, with those construction lights on a string dangling through every aisle. It makes my want to commit suicide every Sunday.

      PS Bonus points if you ever used CookExpress.com (hand-delivered u-coo
    • Crappy list (Score:2, Insightful)

      by Sycraft-fu (314770)
      Some items on there are ok, like manned space exploration or to-your-door delivery but most of the list is just dumb. Some of the worst ones:

      The EV1. WTF? Why the hell would you miss this. I got the chance to try one at high school, I forget which teacher arranged to have it shown off. The thing was underpowered to the extreme, didn't have long range and was apparantly plagued with failures. However that aside it was inefficent as hell. People like to pretend like it's non-poluting because there's no tail p
      • Re:Crappy list (Score:5, Interesting)

        by Jah-Wren Ryel (80510) on Sunday August 07, 2005 @02:19AM (#13262624)
        The EV1. WTF? Why the hell would you miss this.

        Torque. That guy had more low-end torque than a lamborghini. Of course it cost more than a lambo too, but since it was only available through a lease the real price didn't matter to the actual drivers.

        I personally find that there's basically no technology I miss. I find that I either like the new stuff better, or I can get the new equivilant of the old stuff for a better price.

        I see you never owned the model of replaytv that automagically detected and skipped commercials during playback, no manual intervention required except in the rare case where it guessed wrong. No other PVR before or since has been so nice to use.
      • Re:Crappy list (Score:4, Insightful)

        by horza (87255) on Sunday August 07, 2005 @04:02AM (#13262873) Homepage
        The EV1. WTF? Why the hell would you miss this. I got the chance to try one at high school, I forget which teacher arranged to have it shown off. The thing was underpowered to the extreme, didn't have long range and was apparantly plagued with failures.

        I had a chance to try one of the first computers. Why the hell would any one want a computer? It was underpowered in the extreme, wobbling the rampack would lose all your data, and all the software you had to type in by hand out of 'listings' in magazines.

        However that aside it was inefficent as hell. People like to pretend like it's non-poluting because there's no tail pipe. News flash: That power was generated somewhere and coal probably did the generation. Because of the multitudes of conversions of form the power underwent, the efficency was for shit. The straight mechanical transformation of an ICE was much better.

        Newsflash: You've no idea what you are talking about. Already a fair percentage of energy is created by renewable energy and that percentage is growing all the time. You can even stick up some solar cells and charge the car yourself. The ICE is maximum 40% efficient, and performance degrades over time in cars, the pollution happens to occur mostly in densely populated human areas. In my town, Nice in France, the government is spending 320M euros on a tramway... which is effectively a bunch of electric busses. A lot of other european cities are going the same way. Whether electric or hydrogen powered, anything that makes the air we breath cleaner is good for everybody.

        Phillip.
        • Re:Crappy list (Score:3, Interesting)

          by aaronl (43811)
          As long as by "fair percentage" you mean under 10%. And the vast majority of *that* is hydroelectric, so not exactly feasible in all places.

          Solar is a joke right now, due to the horrid process to manufacture the cells. You'd likely be doing better by the environment to run a generator to charge your car in the field. If we're fortunate, this will change in the near future rather than the distant one.

          Also, remember that Europe is much more clustered than the US, so public transit is much easier to provide
      • Re:Crappy list (Score:3, Interesting)

        by bm_luethke (253362)
        I agree with every point but one:

        "IBM keyboards. Oh give it a rest. I have an old IBM keyboard and it's annoying. Takes a lot of pressure to hit a key and makes an excess amount of noise. Give me my nice modern keyboard any day."

        And that one I partially agree.

        There are people - like myself - who tend to hit the keys pretty hard. Right or wrong, it's the way I type and while I've tried to change I can't seem to (and yes, I've been doing this for many years, and no an repetitive stress injury has not happened
    • Check out this EV1 owner's website, unchanged from the 1990s.
      It's like taking a trip in a time machine.

      http://home.earthlink.net/~bdewey/bdsev.html [earthlink.net]
    • Number 7 (Score:3, Informative)

      by The_Wilschon (782534)
      I've still got my IBM keyboard. It came with the first computer I ever owned (and still own, it is in the closet of my room at my parents' house): An authentic IBM Personal System/2 Model 8556. Made in 1993, it sported a 486SX (no heatsink or fan needed here!) at 50mHz, MDA graphics, a token ring adapter, external SCSI port, internal XT hard drive (200MB, I've got more than twice that much RAM now), 3.5" floppy drive, 16MB RAM, excessively crappy mouse, equally crappy 14" monitor, and a wonderful wonderf
  • BELO! (Score:2, Informative)

    by billsoxs (637329)
    They spent something like $100 Million on those stupid 'cat' things. That has to be the biggest flop. The amazing thing is that Belo is still in business. (Papers and TV station)
    • Hardly Accidental (Score:5, Interesting)

      by Markus Registrada (642224) on Sunday August 07, 2005 @12:07AM (#13262237)
      Scams like BELO, like Pets.com, weren't idiocy at all. They served their purpose to perfection. The only mistake the VCs made was overreaching. Had they kept things toned down, the gravy train could have run on and on.

      These companies weren't expected to succeed. The VCs even said so: profits didn't matter, sales prospects didn't matter, even embarrassingly stupid products didn't matter. What mattered was that large amounts of money could change hands with very little oversight. It was money launderers' heaven.

      If you want to pay somebody off, buy their company at a massively inflated price. (No company to sell? Start one!) Want to hide paper profits? Stage a stock collapse. Want to reward a toady? Make him CEO or CFO of a startup. (The CEOs were all directors of one anothers' companies.) Want to pocket the investors' money? Have your CEO spend it all at your marketing or advertising service.

      None of the money was wasted. It wasn't burnt. Every dollar went into somebody's pocket. Every dollar came from somebody else's. One group got most of it, another lost most of it. The ones who lost were pensioners, whose pension funds were "mismanaged" into oblivion. Did the pension fund managers suffer? Or did they make out like, er, bandits? Which do you think is more likely?

      This is not to say that everybody involved was a crook. Lots of people worked really hard to try to make something new, and most of them suffered as much as the pensioners.

      How do you imagine W funded his campaign? His father used banking fraud, and had to bait Saddam into invading Kuwait to keep son Neil (Silverado) out of prison. The W crew relied on more modern, less legally-risky securities fraud (Enron). They're not very imaginitive, though: count on the VCs to ramp things back up before the next election season.

  • Kibu (Score:4, Interesting)

    by metlin (258108) * on Saturday August 06, 2005 @10:01PM (#13261699) Journal
    Interesting article - it actually lists Kibu as a Top 10 DotCom bust site.

    There is a nice book by Lori Gottlieb and Jesse Jacobs called, "Inside the Cult of Kibu: And Other Tales of the Millennial Gold Rush" [amazon.com] which talks about the madness during that era.

    Nothing new, but it is an interesting read, written by some of the very people behind Kibu.
  • Marketing (Score:5, Insightful)

    by aftk2 (556992) on Saturday August 06, 2005 @10:01PM (#13261702) Homepage Journal
    As those who saw the 2000 Super Bowl (I believe that was the one) can attest, much of this money was indeed spent on marketing. At the time, this made sense: let's establish ourselves with high profile commercials, designed to reach a huge audience.

    But that didn't work. If only these companies knew then what we know now: these internet services don't need to be marketed to the masses. They only need to be marketed to a select few. Take websites and software like MySpace (please!), CDBaby, Delicious Library, and even Google: these are just a handful of current web success stories that are profitable, and they've never used television advertising. The goal isn't to reach everyone; the goal is to reach early adopters who will use and actually benefit from your product. The masses will come along...eventually.
    • Good point, but P*orn needs ZERO Marketing. People seem to find that just fine on thier own :) If you look back on technolgies like VCRs, CDs,DVDs, and Web Sites you'll see P*rn leading the way as early adopters! Not sure about the benefit part from being early adopters...I won't get into MBA Level S-curve theory on early adopters of Technology, that'll bore the crap out of most of /.
      • Re:Marketing (Score:3, Insightful)

        by sammy baby (14909)
        On the contrary, porn needs quite a lot of marketing, precisely because the market is so flooded. It's like the video revolution in porn, only orders of magnitude bigger: suddenly, everyone can be "in the business."

        Incidentally, try doing a google search for "thumbnail gallery porn" sometime. There are scores of sites out there that exist only for the purpose of pointing to web pages with free porn on them. If that's not aggressive marketing, I'm not sure what is.
    • by Anonymous Coward
      One company did cash in it's superbowl ad: monster.com

    • Except these sites weren't like MySpace, CDBaby, or Google -- they were mostly just lame clones of Amazon.com.

      I think everyone involved knew these commercials were a long shot at best, and their real purpose was to advertise the IPOs and not the sites. The goal was to flush as much investor money down the toliet as fast as possible, and hope everyone could cash out before the house of cards collapsed. Nobody was trying to build a successful business.
    • by grcumb (781340) on Saturday August 06, 2005 @11:16PM (#13262031) Homepage Journal

      "If only these companies knew then what we know now: these internet services don't need to be marketed to the masses."

      You hit the nail on the head. The level of misunderstanding at the time was immense. I vividly remember one keynote address at the 1999 World Wide Web Conference in Toronto, given by Bob Metcalfe.

      Bob had this nice tight little riff he'd made up, wherein he announced that in order to thrive on the web, a company had to eyeballize, memberize and then monetize [infoworld.com] their website. His message, as much as any other, epitomised the Oklahoma-land-rush feeling at the time, where people grabbed turf first and asked questions later.

      Unfortunately, some of those questions were rather nuanced. Like, for example, 'do you not like ads at all, or do you just not want to be distracted while you're reading online?' Google found the answer to that. Go.com and others did not, to their chagrin.

      MSN has only recently begun learning the folly of 'memberizing'. And people are still struggling with the problem of 'monetizing' their websites.

      At the time I heard Metcalfe's talk I remember shaking my head in disbelief. Now, don't get me wrong, I respect him greatly for inventing ethernet. But further proof of the folly of the Dot Com boom was the blind faith that investors put in the business acumen of the alpha geek. Visionaries, generally speaking, are not too great at dealing with the messy details of day-to-day life, and as often as not need to be protected from it (that's one good use for tenure in Universities, by the way). Investors allowed these same dreamers into the driver's seat, and paid in spades for the decision.

      • Metcalfe is clearly long past the visonary stage and ought to be put out of his misery.

        Some clues as to how out of touch he has been in the last decade:

        1) In the late 90s, he kept on predicting that a wholesale "collapse" of the internet was right around the corner. Just like the jesus-freaks proclaiming doomsday was upon us - the date of the collapse would come and go and he would just pick a new date about a year or so ou - lather, rinse repeat.

        2) Lost a power struggle for control over 3com, the company
    • Re:Marketing (Score:3, Informative)

      by jelle (14827)
      cdbaby, iirc that was around before the web, with some sort of gopher or telnet interface, starting out a little later than the imho first on-line store cdconnection.com which was on-line (with international shipping) since 1990. Your used cdconnection.com to going to it with telnet.

      Most people didn't even know what the Internet was, nor that it existed, back in 1990. That was so early in Internet time, it was still before the period when most people were actually proud that they didn't know how to use a co
  • LNUX (Score:2, Interesting)

    by Anonymous Coward
    Hope nobody had any money invested in VA stock. This chart [yahoo.com] of slashdot's parent company shows what a dot-bomb this was.

    But at least it's CEO and his pals cashed out in time. Wonder if slashdot sucks so much now because CmdrTaco is living high on his LNUX riches.

    • I was surprised by the selling price of Slashdot. While I agreed that a lot of work went into making Slashdot what it was, it was a lot of money for what is basically just a web site. I really didn't understand why there was such a frenzy with the dot-com era. For some reason, few people of influence questioned the absurdity of the situation. Alan Greenspan did question it with his "irrational exhuberance" remark, people seemed to brush him off. Mr. Greenspan was the wise one here, and those that inve
  • by under_score (65824) <mishkin-slashdotNO@SPAMberteig.com> on Saturday August 06, 2005 @10:02PM (#13261710) Homepage

    First, I invested in some of those dot coms at ridiculous prices. I'm young, so it's not like I blew my life savings or anything, but still... lesson definitely learned.

    Second, I worked in one of those never-quite-successful dot coms. A small company that started just late enough to miss the VC gold rush (or at least that's what we told ourselves). I had to exercise my options before I could tell if it was going to be bust. Regrettably it did bust. Oh well.

    I'm feeling the heebie-jeebies about the housing market right now. Seems pretty similar: lots of institutional investment, lots of trendy discussion, lots of people moving around a lot... we'll see, but I'm not too hopeful about real estate right now.

    • Real estate is downward rigid. Real estate prices don't tend to drop as much in such a short period of time because people have to live somewhere. So even though the real estate market may be in a bubble, it wouldn't drop like the dot-coms...
      • Good point, and I appreciate you mentioning it because I hadn't thought of it (not a lot of economics in my background).
      • That's totally untrue. Just ask people in Texas who bought houses during the oil boom and then lost their shirt. The thing that you're forgetting is that while it is true that people need to live somewhere, it's also true that housing isn't liquid and can't be unloaded as easily as stocks when things go bad. When the market starts to drop then all bets are off. About the only way to get out of some housing deals is bankruptcy, which almost happened to a neighbor of mine who lost his job and couldn't pay
        • Just ask people in Texas who bought houses during the oil boom and then lost their shirt.

          I live in the Dallas area (since 1999) and you have reminded me of stories I heard when I moved here. It seems that houses would sit empty for months and then suddenly burn down one night. Apperently it happened to a lot of house here. Houston I guess was even worse. My wife has friends who moved there in the mid 90s and the houses were dirt cheap. 70-80 k for a house that had been listed for 300k a year or two

    • Real estate is one of the more solid investments you can make. Provided you don't buy in front of a new hyperspace bypass or something...
      • Real estate is one of the more solid investments you can make.

        One thing about land...they're not making any more of it.
      • Real estate is no different from any other market- it can bubble and fail. SOuthern California looks especially scarry right now- prices have raised 300% in the past few years while wages have gone up under 10%. People are taking out interest only loans to afford property (also called renting) and hoping to sell or refinance in a few years with a large increase in valuation to support these loans. Prices can't raise in relationship to wages forever- it just isn't sustainable. I would expect the upper e
        • I think that you are mostly right, the bubble can burst but because your investment is in something tangible, it will not be worthless like that of a failed company. Compare IT stocks to real estate. If there is a big correction in both markets, a lot of IT companies will probably go backrupt, and your property might become next to worthless. But when things pick up again, the IT companies will still be gone, but (as long as you were able to hang in there for a bit and didn't overextend yourself to buy it i
        • You see a problem, I see opportunity.

          Looks like its going to be cheap to buy up some housing soon.
      • Ask the people in Japan after the 1980's housing bubble - over the last 15 years it's been a straight down trajectory, prices dropping 50% and more. And they sure ain't making new land in Japan.

        It's a bubble, just like the stock market bubble that partially blew in 2000. And it's the only thing keeping the US economy up. When it ends, a massive depression will follow - there's no way out from it.

        And yeah, buy something at the high prices now. when it drops 50%, how can you sell and not be underwater? you
    • I'm feeling the heebie-jeebies about the housing market right now. Seems pretty similar: lots of institutional investment, lots of trendy discussion, lots of people moving around a lot... we'll see, but I'm not too hopeful about real estate right now.

      You are dead on here. There are many warning signs, like, for example 1 real estate agent per household available for sale in California.

      That, and in many areas you can now rent for less than the cost of a mortgage. (If you don't see that as a problem, and you
    • One site I've started reading in the past several months is The Housing Bubble 2 [blogspot.com] blog. (It has a "2" because the Illuminati convinced Blogspot to shut down the original site.) This guy collects real estate news from all over the world and he has a comments section that attracts an interesting crowd with some good information.

      This bubble is not just something that affects places like San Diego- it's worldwide and echo bubbles are infecting markets that hadn't yet been reached. Even sh8tholes like Bakersfield
    • The world "real". You are buying real property with real estate, it's not something that can just vanish in a puff of digital logic. It's also a scarce resoruce, there's only so much land in the world, and even less of that in areas people find desirable.

      So, barring really stupid investements, you never lose everything. The market may go down and you may not be able to get what you thought for it, but you never really lose everything because you have soemthign tangable, a peice of land (and the associated s
      • So, barring really stupid investements, you never lose everything.

        If you buy a property with cash, maybe, but if you fund a property with debt, which almost everyone does, you might just lose more than everything.

        Even if you don't decide to really invest and get pure investment properties, you should get a house if at all possible. When you rent, your money goes nowhere. It just dissappears to your landlord every month.

        As opposed to when you buy a house with a mortgage, and your money just disappears

  • Just kidding, Slashdot isn't a flop obviously, but I wonder if ONSALE.com ever traded stock, because they sure flopped, then turned into newegg.com and now I don't even know what business they are. Everything lost to eBay sadly.
    • I don't know who told you onsale and NewEgg were the same.. but they're not. Just a little FYI.

      HJ
    • I wonder if ONSALE.com ever traded stock, because they sure flopped, then turned into newegg.com...

      Yes, OnSale.com did trade publicly. I think the ticker was ONSL. It later merged with Egghead.com (which was the former brick & mortar Egghead Software chain) and changed the ticker symbol to EGGS and used the name Egghead.com. I know this because I lost a few thousand on this stock.

      To the best of my knowledge, there is not a relationship between Onsale/Egghead and Newegg.

  • Real Estate Bubble (Score:5, Interesting)

    by superpulpsicle (533373) on Saturday August 06, 2005 @10:03PM (#13261719)
    Wait till this one pop. It'll have the dot com era seem so yesterday. Go to this website http://www.stock-market-crash.net/housing-bubble.h tm [stock-market-crash.net]. In 1989 Japanese housing bubble, housing prices tanked for 13 straight years. US might do the same. The hi-tech industry is recovering alright considering the short period of time.

    • My god I hope it does. You can't buy a house anywhere in Phoenix right now without spending an ungodly sum. Housing selling for $180k in 2000 are fetching well into the 400s now. Hopefully it pops soon, I want a house.
  • by karvind (833059) <karvind@gmail. c o m> on Saturday August 06, 2005 @10:05PM (#13261723) Journal
    We seem to cover dotcom stories regularly:

    Dot ComBack, Or More Of The Same? [slashdot.org]

    Dotcom Era Fads [slashdot.org]

    Dot-Com Service Memories? [slashdot.org]

    The Dot Com Super Bowl [slashdot.org]

    Another Dot-com Boom? [slashdot.org]

    *sigh* the goo' ol' days

  • by tehanu (682528) on Saturday August 06, 2005 @10:09PM (#13261747)
    The best thing is, the next "big thing" that comes along and the same people (plus some new investors who were kids the last time) will repeat the exact same mistakes that they did during the dot-com era. Never underestimate the power of human greed (not to mention herd instinct as everyone around you is screaming "Buy, buy, buy") to fool the mind into thinking "This time it will be different."

    BTW while I have seen plenty of news articles about how stupid investors and companies were during the dot-com era, how about some insiteful self-criticism about the role the media (including the tech media) played in building up all the hype that helped produce the atmosphere that allowed these excesses to take place, esp. in light of how they profited from the era (eg. advertising)?
  • Ahh, eToys... (Score:4, Informative)

    by Reverberant (303566) on Saturday August 06, 2005 @10:14PM (#13261770) Homepage
    ...brings back some memories [slashdot.org]...
  • by Ledora (611009) on Saturday August 06, 2005 @10:15PM (#13261772)
    Coca cola backed rocketcash was a pretty dumb idea. It was another virtual currency, I won 1000 dollar of it (yes it was worth that in USD) and tryed to order large amount on sites with it only to be harassed by their "partners" because all rocket cash did was fill in websites order info with your name and THEIR visa card. so I would get a call from (ebgames I believe it was) asking me to confirm my visa number and give them my DL # and all that and I would tell them ITS ROCKETCASH! I ended up having to call cokes marketing department and yelling at them. Anyone eles use that crap?
  • by chia_monkey (593501) on Saturday August 06, 2005 @10:15PM (#13261774) Journal
    Wow. It's funny...albeit scary...that not only do I remember most of those but I actually used them. Webvan wasn't a bad idea, it just wasn't implemented correctly (or was ahead of its time like the Newton was). Kozmo just plain rocked. I was in Atlanta at the time and that was one of its markets. I didn't fully grasp it's model, but I had their magnet on my fridge and used them at the local burrito place. Oh yeah...back to the question. So for those of us that actually used these things, are we early adoptors or dumbasses? I will admit that Webvan had some damn good prices on some things if you did your shopping.
    • Oh yeah...back to the question. So for those of us that actually used these things, are we early adoptors or dumbasses? I will admit that Webvan had some damn good prices on some things if you did your shopping.

      It means you used them, nothing more. Why would you be a dumbass for using a service that worked for you? If you invested $5 million, then perhaps you could be considered a dumbass (even then, I assume a lot of investors knew and could afford the risk.)
  • by cosmo7 (325616) on Saturday August 06, 2005 @10:17PM (#13261779) Homepage
    Boo.com became a cautionary tale by deciding that supporting MacOS was unnecessary. Although their target market was probably 95% Windows95, the journalists who reviewed the site were 95% Mac. Once you hit a screen that tells you that your OS isn't supported, you're probably not going to write anything nice.
    • by Anonymous Coward
      Boo.com was a beauty/fashion portal, wasn't it? What on earth were they thinking? I'd say old-school Mac users are at least as fashionable [imageshack.us] as most PC users, not to mention a damn sight easier [imageshack.us] on the eyes [imageshack.us].
  • Flashback (Score:2, Interesting)

    by Anonymous Coward
    Eric S. Raymond -- Surprised By Wealth
    Dec 10, 1999, 07:10 UTC
    By Eric S. Raymond

    A few hours ago, I learned that I am now (at least in theory) absurdly rich.

    I was at my machine, hacking, when I got email congratulating me on the success of the VA Linux Systems IPO. I was working on my latest small project -- a compiler for a special-purpose language I've designed called Scriptable Network Graphics, or SNG. SNG is an editable representation of the chunk data in a PNG. What I'm writing is a compiler/decompiler

    • Re:Flashback (Score:3, Interesting)

      by Animats (122034)
      Because I'm a VA board member, under SEC regulations there's a six-month lockout on the shares (a regulation designed to keep people from floating bogus offerings, cashing out, and skipping to Argentina before the share price crashes). So it's not strictly true that I'm wealthy right now. I will be wealthy in six months, unless VA or the U.S. economy craters before then. I'll bet on VA; I'm not so sure about the U.S. economy :-).

      Ah, yes. Right after the SEC cut the holding period. [findlaw.com] Until 1997, you usua

  • drkoop.com (Score:3, Informative)

    by Infonaut (96956) <infonaut@gmail.com> on Saturday August 06, 2005 @10:23PM (#13261806) Homepage Journal
    Yes, it's still around [drkoop.com], but as a shadow of its former self [scripophily.net].

    Ol' C. Everett just didn't know what he was getting into.

  • Interesting Read (Score:4, Interesting)

    by eklitzke (873155) on Saturday August 06, 2005 @10:24PM (#13261811) Homepage
    The article was very interesting, for those that actually RTFA. The article definitely brought back memories. On another note, did the GovWorks logo remind anyone else of the NetBSD logo?
    • Yes, I thought it was the NetBSD logo.

      I was actually confused for a second. In trademark law, that's pretty serious -- if some schmuck can get it mixed up, that means its time to bring out the lawyers.
  • They were the ones that hired Gurkha bodyguards. I don't need to say anything else, I think.
    • "They were the ones that hired Gurkha bodyguards. I don't need to say anything else, I think."

      You mean they didn't have any 'problems' with Darl McBride of the 'Santa Cruz Operation' and they didn't experience any unfortunate and unforseen 'suicides'?
  • The point of Flooz? (Score:3, Interesting)

    by Corvaith (538529) on Saturday August 06, 2005 @10:30PM (#13261838) Homepage
    The author here misses the intended audience for Flooz, as far as I could tell at the time--which is to say, those people who cannot have credit cards. Kids and teenagers. Especially teenagers. Give a kid cash and they can spend it at a local store but not online. Give them a check and they don't have an account to put it in, much less a way to spend it after. But Flooz meant that you had your choice of ways to spend the money.

    Nobody was going to actually put money into a Flooz account and then use it to buy stuff for themselves, I assume, but it was a halfway decent gift idea. Not worth the hype, though. Now that you can get prepaid 'credit' cards--which I'd never heard of or seen at that point in time, myself--there's no point. But some of us did have a use for it then!
  • Some of those ideas are good and can/will work. Targetting the female teenage market, or webvan, or govworks, or stuff like that are good ideas. Even the online currency thingie can work, although it will be in very tough competition against the credit card companies, debit cards, or even newer stuff like goldmoney.

    It's just that nearly all dot-com companies were way too ambitious and arrogant. This was mostly because they were run by business-oriented individuals (these people tend to be like that). If some of these companies didn't squander away their capital, they would still be in business. Let's also not forget that these companies didn't have good cost controls (spending millions on the the Super Bowl ads, which incidentally is the most expensive advertising around, for a target market that generally isn't even tech-oriented looks lame to me).

    For example, stuff like govWorks IS the future. There is a big opportunity to streamline and automate interaction between government and citizens. Not only is this cheaper, it is is more efficient too.
    • It's just that nearly all dot-com companies were way too ambitious and arrogant. This was mostly because they were run by business-oriented individuals (these people tend to be like that). If some of these companies didn't squander away their capital, they would still be in business

      I think that's exactly the opposite of what was wrong. The companies were formed and hyped not by business people, but by tech evangelist types. They were passionate enough to attract investors, but not smart enough to be cons
      • The dot com I worked certainly failed in part becuase the CEO had no ideas about technology. We were essentially a content site (investment analysis and related stuff including quotes, summary company financials etc.). A lot of money was spent with Icon Medialab who did a ludicrously fancy front (Java applets for menus so they looked right) and no working back end . Ars Digita nearly saved us. We got most of site working very quickly. I was one of the main contacts with them and they were a real pleasure
  • I think my coworkers and I were largely responsible for this one going under. Jonesin' for a candy bar? Quick, call* Kosmo! Some ice cream sound good? Kosmo will get it here fast! A couple of the guys used to do this on purpose - they'd all want something, but they'd place their orders just far enough apart that the guy (and it was almost always the same guy) had to make multiple trips.

    From a customer's point of view it was a wonderful concept; but there's no way Kosmo could ever have turned a profit.

    On a r
  • Dot-Bomb Experience (Score:5, Interesting)

    by BuildMonkey (585376) on Saturday August 06, 2005 @10:35PM (#13261863)
    I worked at a dot-bomb through the latter half of 1999 and into the beginning of 2000. We were building an online drug store to complement the company's mail-order prescription drug renewal business. The idea was that you would use the web site to input your prescription number, and while at the web site, would purchase deodorant, some bandaids, and mouthwash. In short, the hope was for the online experience to mimic your experience in a brick-and-mortar pharmacy.

    There was a real brick-and-mortar, mail-order prescription drug fullfillment business footing the bill for this. It had been started by a father. He was semi-retired and had turned the business over to his two sons. The Web site was their idea and they were in charge.

    We had a million dollars in middleware, a couple million in consulting to customize the middleware, an Orcale backend running on a high end Sun (E7500), and the Web site itself running on a top of the line, Sun E10k. At this point there was about $5 million sunk into the project, and we had not yet gone live.

    Before going live, management felt the need to run a load test. At that point, you saw the IBM commercials on TV were dot coms went live only to see the site crash due to too much traffic. They didn't want to see that happen. The load tests showed that we could only handle 1000 simultaneous transactions. Clearly, that wasn't enough. So we bought another E7500, another loaded E10k, and another Oracle license. I don't know the exact numbers but I think this was close to another $3 million. With this new equipment and an additional DS3 line, we could handle 2500 simultaneous transactions.

    Early in 2000 it comes time to turn the web site live and crank up the advertising. Tension was running high - and expectations were greatly disappointed. The largest number of visitors we ever had to the site was eight. We never had more than one active transaction.

    I only stayed around for another couple of months. Before I left, the father, who founded the business and ultimately footed the nearly $10 million dollar tab, said:
    It would have been cheaper to have phone operators and advertise that we would wrap every package in $100 bills.
    • by (negative video) (792072) <me@REDHATteco-xaco.com minus distro> on Saturday August 06, 2005 @11:36PM (#13262119)
      That's really sad, but ...
      With this new equipment and an additional DS3 line, we could handle 2500 simultaneous transactions.
      ... what the hell were they thinking? Suppose 5e+6 people had bought from the site every month when their prescriptions needed refilled, with 50 page loads per sale, and $0.50 net profit per sale. That would be an overall net profit of $30M/year, which is pretty darn respectable. However that workload is only 96 page loads per second on average. Even accounting for load nonuniformity, the original system would still have been total overkill. Furthermore, if popularity had ramped up quickly, they'd have just been able to upgrade directly from the profits. Oversizing the machines was just pointless.

      Why does money make people lose the ability to do arithmetic?

  • by chia_monkey (593501) on Saturday August 06, 2005 @10:46PM (#13261903) Journal
    Oh what a time it was. First...I like to play the market. I made a lot of money for myself and for friends and coworkers keeping tabs on these dotcom-era mysteries. I made one coworker a whoppin' $50k on some of my insight. Of course...the big pin came to pop the bubble and I lost $11k in one damn day (I wasn't even in town that day to watch the market so imagine my surprise when I got back).

    I got called it from @work/@home for an interview. They flew me across the country, gave me a car, interviewed me. They had the foosball tables around. Totally chill place. I remembered reading about all the other companies that had pool tables, video games, stocked fridges, company cars, etc for their employees. Sounded fun. I didn't make the cut. A year later, the company didn't make the cut either.

    I got a call to work for Alta Vista (remember them?) to do some HTML work. I had JUST received an offer to work at a more stable, multi-national company as a web developer but I was willing to entertain their offer. I asked what they wanted and they wanted nothing more than HTML coding. They were willing to pay $60k or so to do that. It was much more than my current offer but I took into consideration the fact I'd have to move the family across the country and still wasn't sure it was the safest thing to do. I'm glad I didn't because within five months the company had gone under. Go figure.

    As a CMU grad right about the time the net bubble was growing, I saw A LOT of "and we're the coolest company on the planet" propoganda. I watched Cramer on CNBC talk about how all these companies (of course, Amazon, Yahoo, eBay were some of them too) had nothing to stand on. "Get out! It's gonna crash!" It did. Still...it's interesting to see what survived and what didn't.
  • The only thing "astounding" about the dot-com boom/bust is that it puts into clear relief just how divorced from reality - or any other productive use of time and energy - the stock market has become. It serves only as a means for people to make money on paper, and contributes to the well-being of society and the economy only by accident.
  • online supermarkets (Score:2, Interesting)

    by jonwil (467024)
    What I think would work is for one of the large supermarket chains (e.g. Coles or Woolworths in australia or whatever it is in your part of the world) to get into online sales.

    You would order online via their website (with the right tech you could even make it possible to swipe a barcode and order that way) and then they would package the order for you.

    Given the need for it to be "local" and given the initally small demand, the best way to do this would be to implement it such that you place the order onlin
  • How can they forget zap.com? The whole story of zap.com is as ludicrous as it gets.

    Zapata Corporation, a fish oil company with no internet experience, was determined to cash in on the internet gold rush in the late 90's. Zap.com, an internet portal site, was one of a whole slew of sites that were trying to compete with Yahoo!. Mismanaged, and arriving too late for the portal game, zap.com lasted less than a year.
  • by (H)elix1 (231155) <slashdot.helix@nOSPaM.gmail.com> on Saturday August 06, 2005 @11:18PM (#13262042) Homepage Journal
    Alternative Minimum Tax laws are not just for the super rich. For those of us who happened to get in early enough into a dot com, work our asses off, go public, vest, exercise when they were high, hang onto the shares for 12 months for the capital gains taxes, watch the share price collapse in those 12 months, and got lucky enough to sell off before getting caught by some of the dumbest tax laws out there. I escaped by the skin of my teeth, and other I know did not.

    SUNW at $85 was a deal. SUNW at $75 was even a better deal. SUNW at... Lots of new lessons on the stock market in general. Watched friends lose houses when trading margins.

    PETS.com stock certificates made great white elephant gifts. Worth every penny. Just waiting for SCOX to get under $2 a share to do it again. It will be framed next to some of the other stinkers decorating my office.

    Miss the beer in the soda machine. You can imagine our shock when a customer actually wanted a tab soda.

    A Sun 440 is not needed for an email server. Makes for a lousy counter strike server too.

    When the economy started exploding, the financials of the company were more important than the foosball table.

    Remove the Diablo mule characters from CVS before you sell the company.

    You can pour your heart and soul into work. Rarely matters. Never forget your family.
  • The offering raised $243 million for StorageNetworks, which sold 9 million shares at an initial price of $27 million. And it gave the company, which had 88.2 million shares outstanding, a market valuation of $7.96 billion.

    3yrs later STOR was dead... run into the ground by greedy management that wanted to take a services company, and turn it into a software company. A classic pump and dump by CEO Peter Bell, backed by Goldman Sachs (who btw 'donated' a number of low level managers who became STOR executive
  • Value America (Score:3, Informative)

    by Noodlenose (537591) on Sunday August 07, 2005 @02:45AM (#13262692) Homepage Journal
    Does nobody on /. ever read books?

    J. David Kuos "Dot.Bomb" was a brillantly written account of how to burn an extra-ordinary amount of money by doing some of the most astonishingly idiotic business decisions ever.

    Very, very good read. Highly recommended.

  • by kronocide (209440) on Sunday August 07, 2005 @05:27AM (#13263028) Homepage Journal
    Here's what I learned co-starting a few web companies in Sweden between '97 and '00, one of which was a bonafide dot-com (although we only burned ~$20M).

    The money came mainly from the risk branches of investment firms started off of regular industry money. Risk capital typically is 5% of the total capital. This money is more or less expected to go out the windows, hence the "risk."

    The model these guys worked from was to seed a company with some potential to attract more investors, then sell their shares at 10x the buying price as soon as that happened.

    They were not morons. They didn't care if your business model made it likely that you would ever actually make money. It was a pyramid game. I seed this company, in the hope that another investor will step in and buy a large chunk of the stock for signifficantly more than I paid, before it all goes to hell. The second investor makes the same gamble, praying to God that there will be someone coming in after them, buying stock for an even higher price. And so on. It had nothing to do with business plans, except that plan was part of the general image of the company.

    This is what the crazy expansions were about. The seeding investor needed the company to grow fast, so they get a fast return on their money. The entrepenours were usually a lot more sane in their plans. It was, in my experience (and I mingled with the founders of most European dot-coms) that it was the investors who insisted on opening offices on the most expensive streets, start branches in London, San Francisco, and Hong Kong, and hireing a thousand people, not the founders. Because that was the only way to quickly attract the next batch of investors.

    So here are some conclusions: What really happened during the dot-com boom was that regular industry money were pumped into a lot of advertising companies and computer consultancy firms, to force along development projects with broken project plans and unrealistic time tables. But it put food on the tables of a lot of consultants. It might perhaps have advanced some web technologies (such as application servers) as well.

    Eventually the investors realized the game wasn't working, and they pulled out. It was an investor-driven process, and most of the money was expendable. No big loss.
  • Drop in the Ocean (Score:4, Insightful)

    by OldCrasher (254629) on Sunday August 07, 2005 @07:07AM (#13263199) Homepage

    While we feel close to the 'huge' losses of the dotcom boom/bust, we must not loose sight of the fact that two US corporations (Enrom, $80+ billion [google.com], WorldCom $74+ billion [columbia.edu] in 2000/2001 alone, and Tyco) probably account for more direct losses than all the dotcom spending. It was these big corporate failures trashing the stock market, that led to widespread losses amounting to trillions of dollars (billions from State pensions alone [house.gov]), that then brought down our favourite dotcoms.

    The dotcoms may have been pretty fireworks, but they were not the monetary black hole that snak the economy.

"There is nothing new under the sun, but there are lots of old things we don't know yet." -Ambrose Bierce

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