The Internet Bubble Burst Essay

1463 words - 6 pages

The Internet Bubble Burst
Sandra D’Adamo
Intro to E-Commerce
March 27, 2014
Professor MacKenzie

Table of Contents
Introduction………………………………………………………………………………..3
How the World Wide Web Began………………………………………………………….4
Tim Berners Lee……………………………………………………………………………4
How the Bubble Inflated…………………………………………………………………..5
How the Bubble Popped…………………………………………………………………..6
What Lessons were Learned……………………………………………………………….7
Could it have been Stopped…………………………………………………………………

Introduction
The internet bubble history started in 1993 with the public being able to access the World Wide Web. The WWW was inflated with the overpriced investment returns from 1994 through 2000. The bubble of ...view middle of the document...

Lee worked. It was during that time that Lee experimented with hypertext. The hypertext was explained as hypertext that can be utilized with computers.
Mr. Lee inventor of the World Wide Web was a Physicist who needed to share his information with other Physicist globally. He realized there was no easy way to do this and decided he would invent they hyperlink known as the internet. Mr. Lee changed this by creating a centralized database that could link up to other documents. At the Tim Mr. Lee has no one interested in his ideas except for his boss who encouraged him to go forward with his idea. The system was given many names, but the one that stuck was the World Wide Web. “The third ingredient Bemers-Lee needed to dream up the web was hypertext, the point and check system of navigating through documents. By the end of the 1980s, hypertext systems were becoming very sophisticated, able to self-correct if documents were removed, for example, so that there was no such thing as a broken link. Tim's genius was to recognize that by doing away with that paradigm, you could put hypertext on the Internet: broken links would be an inconvenience you could live with.” (Cailliau & Gilles, 2012, p. 32-33)
How the Bubble Inflated
This dot-com inflated at a rapid pace. It used a graphical user interface from the WWW that had point and clink hyperlinks. Integrating this into the internet by the early 1990’s made it easier for the average person. With this information the public use of the internet increased rapidly. The businesses’ that were already in existence seen the need for this internet information for marketing purposes and possibly commerce. These businesses were promised that the cost would be low for conducting their business on line and were misinformed. Businesses began popping up all over the place to try and take advantage of what the net could bring with the e-commerce possibilities. These were called the startup companies. Often times these companies had no real world connection except to make money off of the consumers over the internet. Amazon, E-Bay and Monster are just a few names of these now huge start-up companies that have made millions from the consumers buying, selling and advertising through their companies.
These startups were known by certain characteristics: Because of the initial investor’s optimism, the access to venture capital funds was quick and easy. The managers for these companies were often very young and not afraid to take risks. When these companies were taken publically, the original investors could make a tremendous amount of money on the dot-com stock market inflating the prices. The measure of performance known as the PE (price to earnings ratio) was nonexistent when used for the dot-com companies.

“IPO underpricing reached astronomical levels during1999 and 2000.We show that the regime shift in initial returns and other elements of pricing behavior can be at least partially...

Other Papers Like The Internet Bubble Burst

Case 1.6 Nextcard, Inc Essay

1986 words - 8 pages /rationalizations. Nextcard‘s incentives/pressure was in rapid growth by extending credit of more than $1 billion to customers without profits but rather large losses. NextCard surpassed the entities growth targets and maintained strong parameters in their other core business elements (Knapp p. 70). The need to raise additional debt or equity capital when the Internet bubble burst and their stock prices spiraled downward continued to cost rather

Aaaaaaaaaaaaaaaaaaaaaaa Essay

449 words - 2 pages begin to engage consumers in dialogue. Online activity at home or in the office represents another vital opportunity to achieve purchase-cycle intimacy. The bursting of the e-commerce bubble should not obscure the fact that some 70 percent of consumers in the U.S. use the Internet at some point during the automotive purchase process. Cross-Platform Marketing Now consider what happens to a company’s ability to achieve and use purchase-cycle

Ipos Explained Simply

887 words - 4 pages wealthy. Although the dot.com bubble did indeed burst, many of the high tech companies, such as Amazon.com, continued to prosper, earning their shareholder’s a ridiculous $239,045 for only $1000 invested in 1997. The appeal of these high tech companies’ IPOs is simply too great to pass up on for investors much of the time. Even when a price for a company’s stock seems inflated it’s hard not to imagine that it can still rise when you look back at

Global Recession

1280 words - 6 pages valuable lessons to be learnt for future. Globalization and liberalization have contributed a lot in making the entire world a close knit economic unit. In an interconnected global economy recession and economic turbulence in one part of the world has the potential to disrupt the economies of other countries in a major way. The economic slowdown in US economy in 2008 caused by the burst of housing bubble engulfed the entire world in its grip

Inside Job

2054 words - 9 pages Glass-Steagall and allowed further concentration in the financial sector. k. At the end of the 1990s investment banks fueled a bubble in internet stocks, leading to the dot.com bust and $5 trillion in investment losses xii. The SEC had done nothing to prevent the bubble and the crash xiii. Elliot Spitzer’s investigation revealed that banks promoted internet company investments they knew would fail. Stock analysts were

The Greed Cycle

1280 words - 6 pages a blind eye to the practices that went on in the mortgage industry, and it is severely hurting our economy. There were indicators that something was not right during most of June and July when stocks were soaring without financial indicators. The Dow continued to close at record numbers almost every day: then near the end of August it hit us. The mortgage bubble had burst. Banks, brokers, appraisers, and mortgage companies through pure greed had

The Tapering Off Of Qe Iii

751 words - 4 pages which would slow down the economy and also burst the asset bubble. If the Fed decided to taper QE and deflation loomed then there are four possible impacts on the economy. The first impact is that the real interest rate will increase. The nominal rate would be held constant while the inflation decreases and deflation increases. This increase in the real interest rate will severally discourage investment and spending in the economy. The second

Why Does Japan Faces Deflation?

1970 words - 8 pages in the late 80s and lasted to the early 90s. Due to the asset bubble, stock prices and real estate were significantly inflated. In 1990 the Japanese bubble burst, with ongoing stagnation and asset deflation (Okimoto, 2012). According to multiple sources, the term “deflation” means a decrease in the general price level of assets over a period of time. It is the opposite of inflation; however, it is not the same as “disinflation” - where

Managerial Economics

1283 words - 6 pages brokerages, banks financial institutes and the automotive industry as they continued be lavishly rewarded for the perceived outstanding performance of their business units. When the bubble finally burst many of the 2.6 million workers were unable to find new employment. Because the capitalistic society failed, there was very little left to help the individuals weather the storm. It is simply not in the best interests in a capitalistic society to help

Phillips Vs Masuhita

1231 words - 5 pages purchased MCA, the U.S. entertainment giant for $6.1 Billion, however within a year the Japan’s bubble economy had burst and Matsushita was forced to focus on cost containment. In 2001 the CEO announced emergency measure to reverse the situation and offered early retirement to 18,000 employees of which 13,000 took advantage of it, which allowed new managers to emerge. Despite these measure Matsushita announced in March 2002 an operating loss of

Servervault Company Case

2186 words - 9 pages . The major contributor to the loss is the internet bubble. The increasing stock prices over the last few years made some investors too confident in IT companies. However, the collapse of the bubble took place in 2000, when a lot of IT companies failed. As a result, the NASDAQ composite witnesses a huge loss in the stock market. Hence, it is a good opportunity for ServerVault to get more market share. On the other hand, Appendix A(2

Related Essays

Analysis Of National Income Trend Since 1950 And Inflexion Points

829 words - 4 pages system (1993). 2001-04: Dot-Com & Endemic Crisis – Stock market bubble fueled by the rise of the internet and the technology industry. The bubble was caused by the growth of internet users and investors poured in money to finance startup internet based companies without any caution as to whether these companies can turn profitable or not. When the dot-com’s failed to report a profit, the bubble burst which triggered a mild economic recession and as a

Aig Case Study

622 words - 3 pages and enable growth. Within AIG there was a division that was selling insurance on mortgage-backed securities that are known as credit default swaps. As the value of homes continued to rise in 2008, the contracts that AIG made with these credit default swaps expired and AIG pocketed the premiums. People were buying homes with zero money down. When the housing bubble burst and people started defaulting on their loans, AIG then had to buy a ton of

Subprime Mortgage Term Outline

970 words - 4 pages overview of paper 2) Introduction a. Introduction to the topic of subprime mortgages and the housing market bubble. b. Timeline of the crisis and housing market bubble burst 3) Discussion Content a. Definitions and background information on the following topics: i. Mortgages ii. Housing Market iii. Subprime Mortgages 1. Demyanyk, Y., & Van Hemert, O. (2011). Understanding the Subprime Mortgage Crisis. Review of Financial Studies, 24(6

Accounting Essay

1359 words - 6 pages late 1990s, as high tech tools, such as the internet, and increasingly powerful computers, began penetrating the consumer and business marketplace. The thought that a "new economy" had arrived was evident in the hysteria surrounding the tech-bubble of the late '90s and early 2000s. Without fully considering macroeconomic factors, investors and financial institutions bid up stock prices to unprecedented highs. Although the tech bubble has long