Dot-Com Boom and Bust
Dot-Com Boom and Bust was the surge in internet company investment from about 1995 that peaked when the Nasdaq Composite closed at 5,048.62 on March 10, 2000, followed by a crash that cut the index about 78 percent by October 2002.
What happened and why it matters
The boom funded the first wave of e-commerce, and the bust taught retailers that selling online only works if fulfillment costs make sense. Investors poured money into online stores that offered free shipping and low prices while losing money on each order, and some built expensive warehouses before demand existed. When capital dried up, companies such as Pets.com and Webvan failed, while Amazon and eBay lost much of their value but survived. The survivors focused on contribution margin per order, shipping cost and inventory risk, the same unit economics that investors and operators examine in e-commerce brands today.
Related events
Sources
- Dot-com bubble (Wikipedia) en.wikipedia.org