Like any other speculative frenzy the hype over the anticipated value of hundreds of new internet startups among traders exceeded its actual value among the target customer base of the companies that quickly folded, mainly due to spending more on advertising and marketing than what they generated in sales, and cost the former $1.7 trillion. Pets.com, whose registered domain name was acquired by Pet Smart, is a famous example of an online business that looked great on paper to investors but did poorly with actual pet owners considering their advertising and marketing costs far exceeded what they made in sales. Others like Webvan.com, a grocery delivery services, were too far ahead of their time and didn’t have the infrastructure needed to sustain their business model considering that less than 50% of U.S. households had internet by 2001 and the majority of households that did have internet had very slow dial up connections not suitable for ordering delivery services. Others like Flooz.com, an attempt at E-currency, were simply garbage nobody wants as they offered nothing of value not already served by credit cards.The dotcom bust was not fatal to the stock market or eCommerce. It simply weeded out the fads and fakes from the standard bearers we recognize today like Amazon and Craigslist.
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