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A dot-com company, or simply a dot-com (alternatively rendered dot.com or dot com), is a company that 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").
While the term can refer to present-day companies, it is also used specifically to refer to companies with this business model that came into being during the late 1990s. Many such startups were 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. to 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.
With the stock market crash around the year 2000 that ended the dot-com bubble, many failed and failing dot-com companies were referred to punningly as dot-bombs, dot-cons or dot-gones. Many of the surviving firms dropped the .com suffix from their names.
Various different ways to do business and make money with the Internet have been proposed. They are emphasized in the three Cs, which stand for Commerce, Content and Connection. Commerce is about selling products over the Internet, as Amazon.com does. Content refers to placing content on the Internet, varying from news headlines to web-logs. Some examples are BBC News and Facebook. Lastly one can do business by supplying an Internet connection, as with 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.
In the late 2000’s (as well as today) many businesses were interested in investing in the Internet to expand their market. The Internet has the ability to reach out to consumers globally as well as providing more convenient shopping to the consumer. If planned and executed correctly, the Internet can greatly improve sales. However, there were many businesses in the early 2000’s that did not plan correctly and that cost them their business
One of the biggest mistake early dot com businesses made was that they were more interested in attracting visitor to their website but not necessarily winning them over to customers. Early e-commerce thought the most important factor was to have as many visitors as possible gather to their website and this would eventually translate into profit for their business. This wasn’t necessarily the case and businesses failed. Early dot com businesses also failed to take the time to properly researching the situation before starting their business. There are many factors that come into play when starting a new business. Research needs to go into the product the business is actually trying to sell. The business also need to research price of their product. They need to be competitive with the cost of their product compared to their competitors. Early businesses failed to research how they promote their product. If they decide to advertise their product only through the cheapest avenues (i.e. banner ads, radio), most likely they will not get the amount of consumers they would if they advertised through more popular means.
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.
Top 10 dot-com flops CNET.com
|Internet Movie Database||Amazon.com||1998|
|Viaweb||Yahoo!||$49,000,000||June 8, 1998|
|Netscape Communications||AOL||$4,200,000,000||24 November 1998|
|GeoCities||Yahoo!||$3,570,000,000||January 28, 1999|
|Broadcast.com||Yahoo!||$5,700,000,000||April 1, 1999|
|eGroups||Yahoo!||$432,000,000||June 28, 2000|
|HotJobs||Yahoo!||December 27, 2001|
|PayPal||eBay||$1,500,000,000||October 3, 2002|
|Overture Services, Inc.||Yahoo!||$1,700,000,000||July 2003|
|Kelkoo||Yahoo!||March 25, 2004|
|Oddpost.com||Yahoo!||July 9, 2004|
|Lycos||Daum||$95,400,000||August 2, 2004|
|Upcoming.org||Yahoo!||October 5, 2005|
|Skype||eBay||$2,600,000,000||October 14, 2005|
|TheHomeBuyingCenter.com||Internet Leads Systems||$20,000,000||2007|
|DialPad Communications||Yahoo!||June 14, 2005|
|MySpace||News Corporation||$580,000,000||July 2005|
|Konfabulator||Yahoo!||July 25, 2005|
|Provide Commerce||Liberty Media||$477,000,000||December 5, 2005|
|Friends Reunited||ITV plc||$230,000,000||December 6, 2005|
|del.icio.us||Yahoo!||$15,000,000||December 9, 2005|
|Webjay||Yahoo!||January 9, 2006|
|Shopbop||Amazon.com||February 27, 2006|
|SketchUp||March 14, 2006|
|Writely||March 9, 2006|
|BuyCostumes.com||Liberty Media||$55,000,000||July 26, 2006|
|YouTube||$1,650,000,000||November 13, 2006|
|WebEx||Cisco||$3,200,000,000||March 15, 2007|
|Backcountry.com||Liberty Media||May 8, 2007|
|Last.fm||CBS||$280,000,000||May 30, 2007|
|RateYourMechanics.com||Kevin Harris Acquisitions LLC||$2,800,000||August 30, 2007|
|Bodybuilding.com||Liberty Media||$100,000,000||January 6, 2008|
|CNET Networks||CBS||$1,800,000,000||May 15, 2008|