What was the dot-com bubble and what happened when it burst?
In: Economics
The Dot-com bubble was a massive speculative bubble centred around the then new technology of the internet, tons of companies popped up to develop new technologies/products for it or old ones were claiming they would be revolutionized by it. The hype was so high that anyone with a half-baked idea and little idea of how it would actually turn a profit was showered in investment capital.
Its exactly like Uber today, it only exists as a company not because its making a profit but because the investors throwing money at it believe that someday it will.
Eventually though investors came down from the ‘internet is magic’ hype as they came to realize it was rather mundane, it could not revolutionize the pet food delivery industry and online ads were actually worth near nothing [(not near enough to pay people to look at them, which was an actual dot-com business model)](https://www.youtube.com/watch?v=RuzoIG9py_c). All these unprofitable companies were not only going to remain unprofitable but actively hemorrhaging money, so the bubble burst.
Investors lost money, lots of silicon valley people and surrounding business’ lost their jobs, it kicked off a minor economic recession and some tech CEO’s made out like bandits. And everyone learned to never invest on speculative assets you haven’t done research on ever again… until 8yrs later with the 2008 financial crisis.
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