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Internet Business or better know as Dot-com
company
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A Internet Business or 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
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There are a couple of ways to do
business and make money with the
internet. They are emphasized in the three C’s,
which stand for
Commerce,
Content and
Connection. Commerce is about selling products over
the internet, like
Amazon.com does. Content refers to placing content
on the internet, varying from news headlines to blogs.
Some examples are
BBC News and
Facebook. Lastly you can do business by supplying an
internet connection, like
AOL, one of the largest internet service providers (ISP)
in the US.
Some companies, like
Google,
Microsoft and AOL, offer all three of them, which
gives them an advantage on their competitors. This
combination should be a success formula according to
some information specialists.
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.
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Main article:
Dot.com bubble
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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.
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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 collapse is
documented in the book "Digital Babylon: How the
Geeks, the Suits, and the Ponytails Fought to Bring
Hollywood to the Internet."
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Broadband Sports: A network of sports-content
Web sites that raised over $60 million before going
bust in February 2001.
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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.
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DigiScents: Tried to transmit smells over the
internet.
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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.
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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.
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Kozmo.com: delivered small goods (like a pint of
ice cream) via messenger courier in under an hour to
anyone in their service area. They charged normal
retail rates and did not charge a delivery fee. They
thought they could make up the difference by
avoiding the expense of a retail storefront and on
volume.
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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.
Limped along in various forms until an anti-spam
lawsuit forced its closure in 2007.
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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."
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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.
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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.
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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
[edit]
Acquisitions
| Acquisition |
Bought by |
Price |
Date |
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Hotmail |
Microsoft |
$400,000,000 |
December 1997 |
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Internet Movie Database |
Amazon.com |
|
1998 |
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Viaweb |
Yahoo! |
$49,000,000 |
June 8,
1998 |
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Netscape Communications |
AOL |
$4,200,000,000 |
24 November
1998 |
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GeoCities |
Yahoo! |
$3,570,000,000 |
January 28,
1999 |
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Broadcast.com |
Yahoo! |
$5,700,000,000 |
April 1,
1999 |
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Thawte |
VeriSign |
$575,000,000 |
December 1999 |
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Network Solutions |
VeriSign |
$21,000,000,000,[6] |
2000 |
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eGroups |
Yahoo! |
$432,000,000 |
June 28,
2000 |
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AllBusiness.com |
NBCi |
$225,000,000[7] |
March
2000 |
|
HotJobs |
Yahoo! |
|
December 27,
2001 |
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PayPal |
eBay |
$1,500,000,000 |
October 3,
2002 |
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Inktomi |
Yahoo! |
$235,000,000 |
March 2003 |
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Pyra Labs |
Google |
|
2003 |
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Overture Services, Inc. |
Yahoo! |
$1,700,000,000 |
July 2003 |
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Keyhole Inc. |
Google |
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2004 |
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Kelkoo |
Yahoo! |
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March 25,
2004 |
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Picasa |
Google |
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July 2004 |
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Oddpost.com |
Yahoo! |
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July 9,
2004 |
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Lycos |
Daum |
$95,400,000 |
August 2,
2004 |
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Upcoming.org |
Yahoo! |
|
October 5,
2005 |
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Skype |
eBay |
$2,600,000,000 |
October 14,
2005 |
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Ask.com |
IAC/InterActiveCorp |
$1,850,000,000 |
March 2005 |
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TheHomeBuyingCenter.com |
Internet Leads Systems |
$20,000,000 |
2007 |
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DialPad Communications |
Yahoo! |
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June 14,
2005 |
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MySpace |
News Corporation |
$580,000,000 |
July 2005 |
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Konfabulator |
Yahoo! |
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July 25,
2005 |
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dodgeball |
Google |
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May 2005 |
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Friends Reunited |
ITV plc |
$230,000,000 |
December 6,
2005 |
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del.icio.us |
Yahoo! |
$15,000,000 |
December 9,
2005 |
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Webjay |
Yahoo! |
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January 9,
2006 |
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SketchUp |
Google |
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March 14,
2006 |
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Writely |
Google |
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March 9,
2006 |
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YouTube |
Google |
$1,650,000,000 |
November 13,
2006 |
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WebEx |
Cisco |
$3,200,000,000 |
March 15,
2007 |
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Last.fm |
CBS |
$280,000,000 |
May 30,
2007 |
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RateYourMechanics.com |
Kevin Harris Acquisitions LLC |
$2,800,000 |
Aug 30,
2007 |
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