Lessons of the Dot-Com Bubble

Theglobe.com was one of the first social media sites. Now it is a shell company that makes no profit and does nothing. Not being a business guru I don't know any in depth advice as to what they could have done differently than to make money. They should have been more realistic about their business. The company was paying more money to get people to the site than it was making off the site itself. This should have been a heads up. If they had wanted to keep the business going themselves they should have been more pragmatic about it. On the other hand, the owners of theglobe.com might have been able to sell their company for a large profit before it bellied-up.

            If the economic impact of the dot-com bubble bursting caused us to have an improved internet than it was worth it. It's hard for me to feel bad for the guys who created theglobe.com. They ran their business into the ground and now have nice homes but need jobs. This didn't ruin their lives. As for the gentleman who was so self deluded that he thought anyone would want to watch his life on the internet is a different story. Josh Harris would just not get it through his head that he didn't know how to make money on the internet. We have successful online businesses today so the point isn't that it can't be done. It was interesting to note that investors may have learned a bit about investing in social media from theglobe.com. When facebook.com went public it did not do as well as many had expected. In contrast with theglobe.com's phenomenal opening day.   

            In a sense this kind of bubble is to be expected whenever a new idea or technology comes out. You have a bunch of people jumping on the band wagon who want to ride the wave and make money. It is this same idea that causes trends in television and film. That being said, after a while people begin to understand the new market or tech better and the crappy companies/tech gets weeded out. Investing in companies is gambling and not everyone wins. I am sure there were investors who lost a lot of money in some of these companies. This will continue to happen. It's a gamble and there will always ne people out there to take the bet. The Google Glasses could be the beginning of a smart-phone-hybrid bubble. Smart-phones are awesome and I can see them becoming the standard. We will push this technology to its limits till we find a breaking point. Jamming a smart-phone into eye-glasses might just be that leap.

            If the smart-phone become the standard for everyone then I can see an application bubble happening. As it stands, there are some lucrative applications on the market. Most of my knowledge comes from game apps and social apps. There are many free-to-play games that do small charges. If the game can get enough people to play all those little charges add up to a lot. Films use game apps as a marketing tool. Men in Black 3 has a free-to-play game app out that tries to get you to bring facebook friends to the game. In essence it tries to increase word of mouth knowledge of the movie and make money from the app itself. Other apps, like Skyview, can be extremely useful. This app superimposes a star map with constellations and the path of the moon and sun in the sky. This is not only good for romantic stargazing but if you need to know when the sun will set or where the international space station is at in its orbit around earth. NASA has a fantastic app that gives you access to a wealth of pictures a knowledge about our universe for free.

            The future of the applications market is closely tied to that of the smart-phone market. A branch of the smart-phone tech are the tablets such as iPads. This does ease the application market because it has more than one device to depend on. In fact, simple iPods can download and run applications. Applications will be around for a while because they are multi-platform. I do think that we will find the limits of the market at some point. We will push until we find what applications can't be of use to, or what kinds of apps work the best. The best lesson to learn from the dot-com bubble burst is to keep the basics in mind. Don't pump too much money into apps that it becomes bad for your business. They can supplement your business by increasing your exposure, improve customer service, and increase profits but they are not an end to themselves. Don't just jump on the band wagon; think clearly about how apps can help your business in the long run.