dot com company

A Dot-com company, or simply a dot-com, is a company which does most of its business on the Internet, usually through a website that uses the popular top-level domain, ".com" (in turn derived from the word "commercial"). During the stock market crash ending the Dot-com bubble, many failed and failing companies became known as dot-bombs, dot-cons, dot-composts or dot-gones.

While dot-com can refer to present day companies, it is also used specifically to refer to companies with this business model during the late 1990s. Many of these startups formed to take advantage of the surplus of venture capital funding. Many were launched with very thin business plans, sometimes with nothing more than an idea and a catchy name. The stated goal was often to "get big fast" i.e. capture a majority share of whatever market was being entered. The exit strategy usually included an IPO and a large payoff for the founders.

Others were existing companies that re-styled themselves as Internet companies, many of them legally changing their names to incorporate a .com suffix.

After the crash, many of the surviving firms dropped the .com from their names.^[1]

List of well-known dot-bombs

There are thousands of failed companies from the Dot-com bubble of the late 1990s. Here are a few of the largest and most famous.

• 360HipHop: Promoted as 'the ultimate hip-hop destination on the web' and funded by an array of big name investors like Russell Simmons, the lack of consistent content and an inability to earn more in advertising or eCommerce than they spent tanked the project. The site is now a link farm.
• AmCy.com: American Cybercast was the publisher of pioneering episodic sites TheSpot.com and EON4.com, with backing from Intel and Softbank. The company's collapsed is documented in the book "Digital Babylon: How the Geeks, the Suits, and the Ponytails Fought to Bring Hollywood to the Internet."
• Boo.com: Sold clothing and accessories. After blowing through hundreds of millions of dollars of venture capital on a poorly-planned business model, it became the poster-child for mismanaged dot-coms. As of 2006, the brand name is returning (under the ownership of a different company).
• CyberRebate: Promised customers a 100% rebate after purchasing products priced at nearly ten times the retail cost. Went bankrupt in 2002, leaving thousands of customers holding the bag. The bankruptcy was settled in 2005 and customers received about eight cents on the dollar from their original rebates.
• DigiScents: Tried to transmit smells over the internet.
• eToys: Failed Web toy superstore. Notorious for attempting to sell its customer list in an attempt to ward off bankruptcy, despite its TRUSTe-certified privacy statement promising that "We do not sell, rent, loan or transfer any personal information regarding our customers or their kids to any unrelated third parties. Any information you give us . . . will not be used in ways to which you have not consented." The firm was also notorious for a failed attempt to appropriate the etoy domain name from a European art/performance group by suing for trademark violation. The eToys name was acquired and the site relaunched October 23, 2001 by KB Toys.
• Excite@Home: Excite, a pioneering Internet portal, merged with high-speed Internet service @Home in 1999 to become Excite@Home, promising to be the "AOL of Broadband" and partnering with cable operators to become the largest broadband ISP in the United States. After spending billions on acquisitions and trying unsuccessfully to sell the Excite portal during a sharp downturn in online advertising, the company filed for bankruptcy in September 2001 and shut down operations.
• Flooz.com: a service touted as "e-currency" launched at the height of the dot com boom in the late 90s and subsequently folded in 2001 due to lack of consumer acceptance and a basic lack of necessity. Famous for having Whoopi Goldberg as their spokesperson.
• Freeinternet.com - The 5th largest ISP and famous for its mascot "Baby Bob", the company went bankrupt in 2000. Baby Bob was later sold to Quiznos Sub. ^[2][3]
• theGlobe.com: Broke the record as the company having the largest percentage change in its stock price on its first day of trading. CEO Stephan Paternot was famously filmed dancing in a Manhattan nightclub wearing plastic pants.^[4] Limped along in various forms until an anti-spam lawsuit forced its closure in 2007.^[5]
• govWorks.com: Subject of the documentary film Startup.com
• Kibu.com: Online community for teen girls, founded in 1999 and backed, among others, by Jim Clark. Although traffic to its website had begun to materialize, kibu.com abruptly closed its doors 46 days after a launch party in San Francisco, in October 2000. It had not run out of its $22 million in venture capital, but company officials concluded, "Kibu's timing in financial markets could not have been worse."^[6]
• Kozmo.com: Bike messenger delivery service for individuals. Subject of the documentary film e-Dreams
• Pets.com: An online pet food store that focused more on its brand name than profitability. Most notable for its sock puppet icon, seen in a 2000 Super Bowl commercial. After the company went bust in 2001, an E*TRADE Super Bowl ad mocked the dot-com bust by showing the sock puppet lying abandoned in an empty parking lot.^[7]
• Pseudo.com: One of the first live streaming video websites. Pseudo produced its own content in a SoHo, NYC studio and streamed up to 7 hours of live programing a day from its website in a format divided into channels by topic.
• Webvan: This grocery delivery service spent far too much on infrastructure (close to one billion USD) before it had even turned a profit.
• Yadayada.com: Founded in 1999; Internet browser and portal technologies for the first generation of wireless PalmPilot and HandSpring organizers, and Kyocera smartphone devices, competing with OmniSky (also defunct) and AvantGo. The name of the company came from a Hindu phrase (its CEO was Hindu), and not as was widely reported from the similar phrase "Yada yada yada" made famous by a Seinfeld episode (although the similarity certainly helped marketing). The business plan specified 12x as many sales as actually occurred in the first 12 months of operations. The cheap plastic, easily breakable HandSpring devices, sold directly by YadaYada via a reseller agreement, accounted for 96% of support calls vs. the magnesium cased Palm devices, despite the latter's market predominance at the time, and the resulting consumer discontent resulted in many returns and canceled contracts. The company's CEO was also CFO and embarked without oversight on disastrous, expensive marketing campaigns, such as planned Super Bowl ads without basics like a target market. 90%+ of all sales were within the Manhattan area, and the 3GL networks needed to expand the service failed to materialize after the telecom market meltdown in 2000-2001. The most-hyped feature of the service was a public bathroom rank-and-search service, available in Manhattan only, which allowed users to rank bathrooms by several factors such as cleanliness, appointment, etc., and provided directions to such bathrooms based on the user's location. The company laid off practically all workers in 2001, and shutdown formally shortly afterwards. Its CEO was rumored to have fled to Canada to avoid the IRS and lawsuits filed by a few disgruntled employees who were terminated with no severance despite existing written employment contracts. The URL is now in use by another, unrelated company.
• Zap.com: an internet media venture founded by Zapata Corporation, a fish protein company intent on monetizing its domain name.

Top 10 dot-com flops CNET.com

Acquisitions

Notes and references

Donate to Wikimedia