Dotcom

Dotcoms usually refer to internet enterprises that use network platforms to provide services based on computer network technology and thus obtain wealth.

Internet enterprises can be divided into broad and narrow senses and can also be divided into basic-layer internet enterprises, service-layer internet enterprises, and terminal-layer internet enterprises.

In a narrow sense, dotcoms register domain names, establish websites on the internet, and use the internet for various business activities, that is, terminal-level internet enterprises in the broad sense of internet enterprises. 

According to the different products and services these internet enterprises provide, dotcoms include network and internet service providers, content providers, application service providers, data centers, and application infrastructure providers.

Dickens had previously stated that this was the best era and this is the worst era. In just 50 years, from the birth of Apache in 1969 to the advent of the web page era in 1990, and now to 2020, the internet has made tremendous changes in our lives.

While we enjoy the convenience of the internet, we sometimes get lost in the internet. Today is an era of information explosion. The amount of data that the internet generates each day is amazing. 

From the beginning of the reading text to browsing pictures to the proliferation of short videos, time unconsciously passes through our fingertips. 

At the same time, the internet is accompanied by copyright awareness, network security, vulgar culture, and other aspects. These problems were evident in the early stages of the internet's development. 

However, with the development of contemporary society, these issues have been resolved with technology. In the foreseeable future, the internet is worth all our expectations, which will improve the quality of life.

This article will focus on the history of dotcom development, from the creation and widespread use of the internet to the flourishing and crash of internet companies in the dotcom bubble.

Types and Examples

According to their core business and function, there are four types of dot-com companies.

1. Search Engine

Google is the world's largest traffic website and internet enterprise by market value. It was established in a dormitory at Stanford University on September 7, 1998. 

In August 2004, Google was listed on NASDAQ. In 2014 services, including search, browser, email, video, map, translation, etc., were offered.

2. Integrated portal

Yahoo! is the most prominent internet portal in the world. It was established by Yang Zhiyuan and David Filo at Stanford University in April 1994 and listed on the NASDAQ in April 1995, with a market value of up to 500 million dollars. 

Its services include search, email, news, etc. Its operations span 24 nations and regions, providing diversified network services. The number of Yahoo! users, exceeds 500 million worldwide.

3. Instant messaging 

Tencent is the world's largest instant messaging service provider. Founded by Ma Huateng and Zhang Zhidong in Shenzhen in November 1998, Tencent was listed in Hong Kong in June 2004.

Tencent's product line covers instant messaging, portals, search, community services, value-added services, entertainment platforms, e-commerce, etc. 450 million active users out of more than 1 billion registered users, mostly teenagers.

4. Electronic Commerce

Over the past decade, electronic commerce has overtaken the world. The various types of e-commerce models are as follows.

1. B2B: Business to Business
   Alibaba is the world's largest B2B website, founded by Ma Yun in March 1999 and listed in Hong Kong in November 2007. In addition, Alibaba Group also has subsidiaries such as Taobao, Alipay, and Alibaba Software.
2. B2C: Business to Customer
   Amazon is the world's largest e-commerce company, founded in 1995 and located in Seattle, U.S.
   Initially, it only engaged in online book sales, but its products largely extend, including DVDs, music CDs, computers, software, TV games, electronic products, clothes, furniture, etc. 
3. C2C: Customer to Customer
   eBay is the largest C2C e-commerce company in the world. Founded on September 4, 1995, it connects users worldwide, enabling them to transact with one another.

The Rise of the Internet and Dotcom

Since Tim Berners Lee invented the World Wide Web, the development speed of the internet has surprised everyone.

People are always eager to get the information they need on the web page. For this reason, well-known companies gradually emerged and invented new wealth myths.

In 1990, although Tim Berners Lee developed a browser, the browser could only display simple text, and the browsing time was a little dull. In January 1993, Mark Anderson set up the Mosaic browser. 

This browser is trendy because it can display pictures. In 1994, Mark Anderson established Netscape Company and developed a new generation of browsers called Netscape Browser.

The Netscape browser is so excellent that on August 9, 1995, Netscape was listed in New York. After the opening, its share price soared. A myth of the internet emerged. 

This small company with a founding capital of only $4 million became a giant of $2 billion overnight; Mark Anderson also became a billionaire overnight.

The Wall Street Journal commented that it took 43 years for General Motors to achieve a market value of 2.7 billion dollars, while Netscape only took one minute. We have to admire the power of the internet to create wealth.

In March 1995, Yang Zhiyuan and David Filo, two postgraduates of Stanford University in the Department of Electrical Engineering, founded Yahoo.

At the beginning of Yahoo's creation, Yahoo mainly collected various websites on the internet to facilitate users' retrieval. Yahoo went public in 1996, and its founder Yang Zhiyuan became a billionaire.

In July 1995, Amazon was founded. At first, it operated online bookstores. Later, it developed into a diversified commodity. Now, Amazon is the world's largest e-commerce platform.

In 1997, an online email got viral. At the end of 1997, Microsoft acquired Hotmail, an e-mail provider established less than two years ago, for 400 million dollars. With only 26 employees, this company has once again become a wealth myth of the internet.

In February 1998, Google was founded, and its primary product was a search engine. In 2018, Google's market value exceeded $700 billion twenty years later.

Since Berners Lee created the World Wide Web in 1990, during the ten years from 1990 to 2000, he has also created several network companies that are well-known today and created wealth myths. The term "Internet" was unheard of during that decade.

More than 70% of venture capital in the United States is poured into the internet. In 1999, the United States invested more than 100 billion dollars in the internet, more than the sum of the past 15 years. 

Most of the 457 companies that completed public listing were internet-related, and 117 doubled their share prices on the first day of listing. 

The survey showed that in 1998 and 1999, when the company name was changed to 63 companies related to the internet, the share price increased by 125% on average in just ten days before and after the name change. This is undoubtedly a crazy time.

The Dotcom Bubble

The collapse of the Internet foam from 2000 to 2002 resulted in the closure of 99% of websites, which used to be known as the dotcom bubble.

At that time, many high-tech companies, such as Microsoft and IBM, had excellent profitability and could also grasp the future market, which could bring rich returns to investors. Therefore, people were enthusiastic about technology stocks. 

However, a group of internet enterprises, under the packaging of investors, brick scholars, and themselves, have staged public relations shows, boasting an incredibly bright future, and have been able to raise a lot of money.

The blind interest-seeking enthusiasm, coupled with the secret fraud of some institutions, led to a substantial false high, even a crazy understanding of the technology stocks at that time.

Most Internet companies were listed in the second half of 1999. During the six-month freeze period, the trading volume was relatively small, but a wave of selling emerged when the six-month thaw period came. 

It also coincided with the tax declaration quarter in April, which caused considerable shocks to the stock market.

Unfortunately, many sales orders of billions of dollars to the leaders of high-tech stocks, such as Cisco, Microsoft, and Dell, appeared on March 10, 2000, at the same time, bringing a chain reaction of selling, and investors were terrified.

The news that the technology giant may fall aggravates people's panic about technology stocks. Microsoft, the leader, was accused of monopoly in 1997 and brought a lawsuit in 1998. In January 2000, Gates resigned. 

In April of the same year, the court said that it had collected evidence to prove that Microsoft had monopoly behavior, and Microsoft was likely to be split.

Cohen, the chief investment analyst of Goldman Sachs, has proposed to investors to reduce their holdings of technology stocks for the first time in 10 years.

The real problems, together with the incentives that appeared at the wrong time, led to the crisis's outbreak and the foam's bursting. Many Internet enterprises have closed down, and many IT engineers have lost their jobs.

The unreasonable share price that was initially speculated to be high has plummeted, and those Internet enterprises that rely solely on financing for their livelihood can no longer finance.

After the Great Depression, the American economy ushered in 40 consecutive years of growth, and the financial industry was strictly regulated. 

However, in the 1970s, it encountered two oil crises, bringing high inflation to the United States. At the same time, the Internet foam was caused by the problems of the financial supervision system.

In 1982, to revitalize the economy, the Reagan government relaxed the restrictions on savings and loan banks, allowing them to use savings deposits for risk investment. 

In the 1990s, regulators continued to relax or revoke the regulatory mechanism. Then came the second big crisis in the late 1990s, which we call the internet foam. 

Since there is no supervision, investment banks will promote internet companies they are aware have no future. Analysts will be paid according to the number of businesses attracted and according to wanton advocacy. 

According to empirical knowledge and analysis from some experts, over-investment in Internet stocks from unregulated investment banks led to the bubble and triggered the financial crisis. 

The Internet foam persisted and subsided at a relatively fast speed, accompanied by the bankruptcy of some Internet companies, the unemployment of programmers, and the saturation of the internet job market.

New Era

These websites created were static in the first ten years of the internet. That is, users received exactly what the website generated. This was a unilateral information transmission without any interaction.

The website content was mainly used to display, known as Internet 1.0. Users were just readers. After the foam of the internet, people's demand for the internet began to increase. 

Users were no longer satisfied with being readers but also needed to be participants. Users create content and interact with each other, for which numerous exceptional businesses exist. 

In 2001, Wikipedia was born, becoming the world's largest online encyclopedia platform. In 2004, Mark Zuckerberg created Facebook, which allows users to share every aspect of their lives. 

In the past six years, in addition to the extensive network companies we are familiar with, many social networking sites and various forums have also emerged. The era of user-created content is called dotcom Internet 2.0.

On January 9, 2007, Steve Jobs officially released his iPhone, which shocked the world. On November 5 of the same year, the Android intelligent operating system developed by Google was also released for free.

The widespread popularity of smartphones started the arrival of mobile internet, which we call Internet 3.0. At this time, the internet has not only existed in computers but is also deeply integrated into every corner of our lives. 

When people were still lying in front of computers to participate in the interaction, they did not expect that the Internet 2.0 era was about to pass and a new era of Mobile Internet was coming.

In this era, people can use their mobile phones to chat, use an online map for navigation, check out the restaurants recommended, buy air tickets online, wait for their food delivery at home, etc.

Big data makes information more accurate and convenient. Cloud computing technology enables people to work anywhere and anytime. Also, the smart-home system makes life more enjoyable.

With the continuous development of artificial intelligence Internet of Things(IoT), the internet has given us great possibilities in this era.

Reviewed and Edited by Purva Arora | LinkedIn

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