HOME

TheInfoList



OR:

A dot-com company, or simply a dot-com (alternatively rendered dot.com, dot com, dotcom or .com), is a company that does most of its business on the
Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
, usually through a
website A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google, Facebook, Amazon, and Wikipe ...
on the
World Wide Web The World Wide Web (WWW), commonly known as the Web, is an information system enabling documents and other web resources to be accessed over the Internet. Documents and downloadable media are made available to the network through web se ...
that uses the popular
top-level domain A top-level domain (TLD) is one of the domains at the highest level in the hierarchical Domain Name System of the Internet after the root domain. The top-level domain names are installed in the root zone of the name space. For all domains in ...
"
.com The domain name .com is a top-level domain (TLD) in the Domain Name System (DNS) of the Internet. Added at the beginning of 1985, its name is derived from the word ''commercial'', indicating its original intended purpose for domains registere ...
". As of 2021, .com is by far the most used TLD, with almost half of all registrations. The suffix .com in a URL usually (but not always) refers to a commercial or for-profit entity, as opposed to a non-commercial entity or
non-profit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
, which usually use .org. The name for the domain came from the word ''commercial'', as that is the main intended use. Since the .com companies are web-based, often their products or services are delivered via web-based mechanisms, even when physical products are involved. On the other hand, some .com companies do not offer any physical products.


History


Origin of the .com domain (1985-1991)

The .com
top-level domain A top-level domain (TLD) is one of the domains at the highest level in the hierarchical Domain Name System of the Internet after the root domain. The top-level domain names are installed in the root zone of the name space. For all domains in ...
(TLD) was one of the first seven created when the Internet was first implemented in 1985; the others were
.mil The domain name mil is the sponsored top-level domain (sTLD) in the Domain Name System of the Internet for the United States Department of Defense and its subsidiary or affiliated organizations. The name is derived from ''military''. It was on ...
,
.gov The domain name gov is a sponsored top-level domain (sTLD) in the Domain Name System of the Internet. The name is derived from the word ''government'', indicating its restricted use by government entities. The TLD is administered by the Cyber ...
,
.edu The domain name .edu is a sponsored top-level domain (sTLD) in the Domain Name System of the Internet. The domain was implemented in 1985 for the purpose of creating a domain name hierarchy for organizations with a focus on education, even abl ...
, .net,
.int The domain name int is a sponsored top-level domain (sTLD) in the Domain Name System of the Internet. Its name is derived from the word ''international'', characterizing its use for international organizations and treaty-related purposes. The ...
, and
.org The domain name .org is a generic top-level domain (gTLD) of the Domain Name System (DNS) used on the Internet. The name is truncated from ''organization''. It was one of the original domains established in 1985, and has been operated by th ...
. The
United States Department of Defense The United States Department of Defense (DoD, USDOD or DOD) is an executive branch department of the federal government charged with coordinating and supervising all agencies and functions of the government directly related to national secur ...
originally controlled the domain, but control was later transferred to the
National Science Foundation The National Science Foundation (NSF) is an independent agency of the United States government that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the National ...
as it was mainly used for non-defense-related purposes.


Beginning of online commerce and rise in valuation (1992-1999)

With the creation of the
World Wide Web The World Wide Web (WWW), commonly known as the Web, is an information system enabling documents and other web resources to be accessed over the Internet. Documents and downloadable media are made available to the network through web se ...
in 1991, many companies began creating websites to sell their products. In 1994, the first secure online
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
transaction was made using the
NetMarket NetMarket is an online marketplace owned by Trilegiant that sells various goods ranging from electronics to jewelry. It was founded in 1994 by Dan Kohn and Roger Lee, both former London School of Economics students, and by Guy H. T. Haskin and ...
platform. By 1995, over 40 million people were using the Internet. That same year, companies including
Amazon.com Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential economi ...
and
eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
were launched, paving the way for future e-commerce companies. At the time of Amazon's IPO in 1997, they were recording a 900% increase in revenue over the previous year. By 1998, with a valuation of over $14 billion, they were still not making a profit. The same phenomenon occurred with many other internet companiesventure capitalists were eager to invest, even when the companies in question were not profitable. In late 1999, the
Nasdaq The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
index reached a price-to-earnings ratio of over 200, more than double that of the
Japanese asset price bubble The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration of ...
at the beginning of the 1990s.


Burst of the dot-com bubble (2000-2001)

A common indicator used to show the dramatic rise in the number of dot-com companies is the number of advertisements purchased at the
Super Bowl The Super Bowl is the annual final playoff game of the National Football League (NFL) to determine the league champion. It has served as the final game of every NFL season since 1966, replacing the NFL Championship Game. Since 2022, the game ...
. In 1999, only two internet companies bought advertisements, but that number reached 17 the following year.Shroeder, Charlie
"The Dot-Com Super Bowl"
''
Weekend America ''Weekend America'' was a weekly public radio program dealing with news, popular culture, the arts and more. The program was produced for American Public Media and hosted by John Moe in Saint Paul, Minnesota. ''Weekend America'' launched Saturd ...
'', 2 February 2008. Accessed February 26 2014. Archived fro
the original
on 3 February 2016.
However, this number sharply decreased in 2001, with only 3 dot-com companies purchasing an advertising slot. While the term can refer to present-day companies, it is also used about companies with this business model that came into being during the late 1990s with the rapid growth of the World Wide Web. Many such
startups A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend t ...
were formed to take advantage of the surplus of
venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which hav ...
funding and were launched with thin
business plan A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on t ...
s, sometimes with just an idea and a catchy name. The stated goal was often to "
get big fast In marketing strategy, first-mover advantage (FMA) is the competitive advantage gained by the initial ("first-moving") significant occupant of a market segment. First-mover advantage enables a company or firm to establish strong brand recognitio ...
", i.e. to capture a majority share of whatever market was being entered. The
exit strategy An exit strategy is a means of leaving one's current situation, either after a predetermined objective has been achieved, or as a strategy to mitigate failure. An organisation or individual without an exit strategy may be in a quagmire. At worst ...
usually included an
IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
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. The
stock market crash A stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic selling and underlying economic factors. They often f ...
around 2000 that ended the
dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compos ...
resulted in many failed and failing dot-com companies, which were referred to punningly as dot-bombs, dot-cons or dot-gones. Many of the surviving firms dropped the ''.com'' suffix from their names.


See also

*
Brick and mortar Brick and mortar (also bricks and mortar or B&M) refers to a physical presence of an organization or business in a building or other structure. The term ''brick-and-mortar business'' is often used to refer to a company that possesses or leases ...
* Dot-com commercials during Super Bowl XXXIV *
List of largest Internet companies This is a list of Internet companies by revenue and market capitalization. The list is limited to dot-com companies, defined as a company that does the majority of its business on the Internet, with annual revenues exceeding US$1 billion. It ex ...


Notes and references

{{DEFAULTSORT:Dot-Com Company Dot-com bubble E-commerce