...implications, was so common during the 1920s. Even in modern times, many people have been lured in by the idea of making easy money and speculation, despite the lessons learned about these risky investments during the 1920s. The now-infamous Dotcom Bubble burst of the late 1990s shared many characteristics with the causes of the stock market crash of 1929. Investopedia defines the Dotcom Bubble as “A rapid rise in equity markets fueled by investments in internet-based companies.” Investopedia then goes onto describe the Dotcom Bubble as a result of “a combination of the presence of speculative or fad-based investing, the abundance of venture capital funding for startups and the failure of dotcoms to turn a profit.” As seen in the 1920s, many Americans were tempted by the idea of a booming industry that seemed to be rising with no end. As a result, they invested in any startup Internet company that seemed eventually profitable, and did not worry over the risk of these companies folding over due to a desire to stake a claim in the expanding market of the Internet. Both the Dotcom Bubble and the crash of 1929 were caused by people not making safe investment choices, and the never-ending desire for wealth without work. And as expected, the Dotcom Bubble caused an economic slump that was recoverable, but still could have easily been prevented with a history lesson on the Great Depression. The Jazz Age was a time that was marked with bountiful wealth coming with illegitimate sources, and...
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...Mini Research Paper: Internet Bubble Fundamentals of E-Commerce Professor: Russell Calhoun Precious Harper Table of Contents Introduction…………………………………………………………. 3 Brief Description of WWW and Internet …………………………… 4 Successful Dot.com companies……………………………………… 5 Unsuccessful Dot.com companies…………………………………… 6 Conclusion……………………………………………………………. 6 Work Cited…………………………………………………………… 7 British engineer Tim Berners-Lee developed the world-wide-web in 1989; the World Wide Web became available publically on August 6, 1991. The world-wide-web is a system of resources that allows people to view and interact with a variety of information. A computer that is connected to the Internet can access the world-wide-web. Many people believe the Internet and the World-Wide-Web are one in the same when in-fact they are not. The Internet is a massive network of networks; it connects personal computers, mainframes, cell phones, GPS units, music players etc. The Internet started in the 1960’s and it’s a massive hardware combination of millions of personal, business and government computers all connected like roads and highways. The world-wide-web (WWW) is a system of Internet servers that support specially formatted documents. The documents are formatted in a markup language called Hypertext Markup Language (HTML) which supports and links documents, graphics, video and audio files. Web...
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...The Internet Bubble Fundamentals of E-Commerce Instructor: Scott Howell Student: Lisa Mercer May 27, 2012 Introduction Within the past decades of the internet first being established the lives of everyday Americans and the world have changed greatly. Businesses have changed and evolved greatly with the access to the internet, as many are able to purse dreams of starting a business and possibly making millions. The internet has opened the doors for many to communicate with each other, receive daily news, and to do shopping. The upcoming of possibilities through the internet also led to irrational decisions brought on by greed from investors that made way for the Dot Com Bubble. History of Internet A pioneer of the creation the internet was Tim Berners-Lee. Though the internet didn’t become wide spread until the early 1990s the making of the World Wide Web can be traced back into the 1980s. Berners-Lee tried to sell his creation to the company that he was working for in Switzerland, but they were slow to acknowledge his efforts.(Griffin, 2000) With that Berners-Lee turned to the internet community in 1991 making his World Wide Web browser and web server software available. (Griffin, 2000) Many enthusiasts began setting up their own web servers around the world. Many scientists were already using the internet to share information found it easier to post their information on the web and wait for a reply. With some government agencies having the responsibility...
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...Accounting professionals provide validity, signing off on annual reports, which directly or indirectly play a critical role in establishing and maintaining the confidence of the investors. Unfortunately, we are not learning from our past mistakes. History shows us that after every crisis, e.g the great depression of 1929, economic downturn of 1988, dotcom bubble of 2000, Enron and Worldcom issues, and finally the subprime mortgage crisis, there has been a need to appoint boards which recommended changes mostly pertaining to the accounting areas. Accounting professionals are constrained in providing information from data provided to them. While it is their responsibility to follow Generally Accepted Account Principles (GAAP) accounting standards, they do not have a crystal ball to predict the future, but they should have seen the crisis coming much earlier and played by the ethics rules and standards established by GAAP. Also, there is a caveat in the annual reports which says it is the management teams of entity who are responsible in ensuring integrity of data provided to the accounting professionals. The mortgage subprime crisis was driven by greed at many levels including at the homeowner, broker, lender, banks, and government levels. Accounting professionals should play a role in identifying "the train" and should stop the accident from happening much earlier. Economists, however, are better equipped to do so than the accounting professionals though. They should...
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...Internet Bubble Table of Contents 1. The Beginning 2. World Wide Web and Internet-Not The Same Thing 3. Rise of the World Wide Web 4. Fall of The World Wide Web 5. Conclusion The Beginning The World Wide Web was officially introduced to the world on August 6, 1991 by Sir Tim Berners-Lee. The World Wide Web refers to a system of resources that will facilitate individuals using computer to view and interact with different type of information. The concept of the World Wide Web is to combine the methods of computer networking into a dominant and easy to utilize worldwide information system. Tim Berners-Lee formally introduced his project to the world on the hypertext newsgroup. In his own words from a post he said “aims to allow links to be made to any information anywhere”. It linked between different documents using the hypertext method. He made available all of the files necessary for people to replicate his invention. Although invented many years earlier Mr. Berners-Lee’s invention married hypertext with the internet. World Wide Web and Internet-Not The Same Thing The World Wide Web and the Internet are terms that to most people mean the same thing. While they’re related, their definitions are different. The Internet is the structure on which the World Wide Web is based which is at its most basic definition an electronic communications network. The World Wide Web is a part of the Internet “designed to allow easier navigation through the...
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...Extended Case Study 6 The rise and fall of Marconi Background There can be few who are not aware of the spectacular crash of Marconi, which, in the space of two years, went from a share value of £12.50 to under 2p, a stock market valuation of £35bn to just a few million pounds, and a profit of £750m to a loss of some £5.6bn, one of the biggest in UK corporate history. Marconi grew out of GEC, the giant industrial conglomerate built by Arnold Weinstock. In a period when the UK’s industrial competitiveness, and its base, declined, GEC was one of the UK’s leading and most successful industrial enterprises. Weinstock, who died in 2002 at the age of 77, created GEC and was the UK’s leading industrialist for over 30 years. Weinstock graduated from the London School of Economics in 1944. He worked for the admiralty for three years before moving into property development. In 1954, he joined his father-in-law’s firm, Radio and Allied Industries, where he built a strong reputation for his managerial abilities. In 1961, the firm made a reverse takeover of the larger but struggling GEC. Weinstock became GEC’s Managing Director, a post he held for over 30 years until he retired in 1996. In his period as Managing Director, he turned GEC into one of the great British success stories, through a combination of acquisition and organic growth. In 1961, GEC took over AEI, and in 1968 they bought English Electric, the owners of Marconi. GEC’s acquisitions continued into the 1970s and...
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...marginal tax brackets from 70% to 28% by 1989. Others theories believe that globalization and technological advances have contributed immensely to the disparity in incomes, as argued by Gordon and Dew-Becker. However, one school of thought that has gained traction in recent years has been that of asset-price bubbles such as the dotcom bubble of the late 1990s. Some will argue, such as Justin Fox in his article in Time Magazine, that during these respective bubbles, incomes for the rich increased significantly. The late 1990s and early 2000s asset-price bubbles in the stock market increased profits substantially for those who invest large amounts of wealth, which usually consists of those at the top of the income ladder in the United States (Fox 2009). The dotcom bubble of the late 1990s and early 2000s surrounded those in the technology industry and those who invested in those particular. Additionally, it began a shift in the global economy from a manufacturing-based economy to a service-based economy. In America, this service-based economy required new skills. Many of these skills were in high demand by the early 2000s and the supply did not simply catch up. Moreover, the housing bubble left a negative shock upon the economy in 2007 which the help of a supply shock in oil and a rattled financial system. Effects on the Economy One of the most important issues when dealing with income inequality is whether a widening gap can lead an economy to continued sustainability. Jonathan...
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...internet boom between 199 and 2002, internet cafes were booming. Following the yield management model1 to this business brought in great profits. After the dotcom/internet bubble deflated, losses were continuing to mount. A change had to occur. The company’s CEO gave the managing director 9 months to start showing improvement. The only way to do this is by changing the operational structure of the company. A complete redirection in the operations philosophy was to franchise the operations. In order to help with this, it is recommended to use the company Ingram Micro to assist with this task. Ingram is the world’s largest B2B trade-only wholesale provider of technology products and services, including supply chain management. The total cost of a franchise will be £976 per store. This will reduce the cost of opening franchises and start increasing profit for the company. Issue identification The most important issue that easyinternetcafe currently experiencing is their operations. There is no organization on how the future internet cafes will open and be setup. There is an expectation of opening 208 locations in the next 3 years. The logistics of how this will occur must be defined and solved prior to the project moving forward. Other issues that the company is experiencing are: * Internet investment bubble burst in 2000 * Closing and downsizing of some of the original cafes * No operating plan for how to supply and open each new franchise * Large...
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...dot-com bubble that occured in the 1990's through the early 2000's was said to have left some major negative impressions on the world of the internet and our economy, but that is not necessarily true. Because of the dot-com bubble, there have been many great outcomes that often goes unnoticed before looking past all of the businesses and internet companies that went under when this bubble finally burst in the early 2000's. In fact, many say that the dot-com bubble and burst was actually a needed cause and effect that has shaped the internet into what it now is today. Many people believe that a lot of the websites that existed during the dot-com bubble would have had some sort of success if it wasn't for the network infrastructure at the time. The thing is, not many people didn't have access to broadband and the websites weren't getting the exposure and full potential that it could have received. This is especially true for some websites, such as Broadcast.com (Altucher Confidential, 2011). This very same thought occurred during the dot-com bubble and computer scientists and engineers realized that there was a very much needed improvement to the infrastructure of the internet. In order to correct this, many businesses in the tech industry began using tax money to lay high-speed fiber optic cables so that the internet would be more accessible in certain cities and states. This is probably one of the most beneficial things that came about from the dot-com bubble because...
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...dit NMIMS | The World .com fall - IT Bubble burst | | Poleswar Rao V | | INTRODUCTION The dot-com industry began in the early 1990s as a collection of startup companies using the Internet as their primary means to conduct business. These companies typically used the “.com” suffix in their company names, such as Amazon.com, and proliferated in the late 90’s with the massive investments in Internet-related stocks and enterprises. But with the failure and consolidation of many of these companies their numbers have since dwindled. The catastrophic collapse of the dot-coms that shook the U.S. economy started in May 2000. More than 210 dotcom companies failed in 2000 and a total of 762 dot-coms closed for the period January 2000 to December 2001. Since many of these dot-coms began to lay off their staff, the unemployment rate also increased from 3.9% to 6% by 2002. The dot-com bubble burst because the boom was based on the false premise that new technology would eliminate the need for brick-and-mortar stores as this new business model would supplant the old one, thereby converting the “Old Economy,” which is based on the production of physical goods into a “New Economy,” which is based on heavy use of information and communication technology. Although a great deal can be learned from examining the dot-com successes, it is equally important to study reasons for the failures. Examining the mistakes made by the dot-coms can provide insight into the evolution of e-commerce...
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...("HKET Group") started off as a publisher of Hong Kong Economics Times (HKET)--the first Chinese-language financial newspaper in Hong Kong. Launched when the city's economy was booming, the newspaper set out to be the Chinese-language equivalent of the Financial Times and to become one of the pre-eminent financial and business information and service providers in Greater China. Widely recognized for its quality content and leading market status, Hong Kong Economic Times has evolved closely with the economic and business environment of the city, catering to the changing needs of the local business community, such as the addition of a property section during the rise of the property market in the early 1990s and an IT section during the dotcom bubble in the mid- to late 1990s. In the face of new challenges to traditional newspaper industry like the proliferation of the Internet, the HKET Group responds by focusing on two fundamental driving forces that have become the pillars to its success: diversification and differentiation. With a vision to becoming a diversified media group, HKET has branched out to book publishing, multimedia services, electronic information services, recruitment advertising and training. Set in 2006, this case addresses the changes faced by the print newspaper industry and HKET's market positioning amid such changes. The case explores the role of creativity, especially in the context of Blue Ocean Strategy. It can also be used to teach differentiation strategy...
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...Dot com boom/bust An economic bubble exists whenever the price of an asset that may be freely exchanged in a well-established market first soars to levels that cannot be justified (Ironman, 2010). ‘Investors’ push the price of the asset up by irrationally purchasing it. Eventually, the market realizes that the asset price is unjustified and the bubble bursts. More often than not, the bust happens in an all-of-a-sudden manner resulting in people losing huge sums of money. At the same time, these boom/ bust cycle has its beneficiaries, institutions and individuals who make huge amounts of money by ‘surfing’ the bubble or by fuelling it. In the case of the dot com boom, the culprits were the investment banks and some venture capital firms. Events leading up to failure One of the issues that I believe to be partly responsible for the dot com boom happened when the Taxpayer Relief act of 1997 lowered the maximum tax rate on capital gains for individual investors from 28 percent to 20 percent for assets held for more than 18 months. This perspective, proposed by Zhonglan Dai, Douglas A. Shackelford and Harold H. Zhang. In “Capital Gains Taxes and Stock Return Volatility: Evidence from the Taxpayer Relief Act of 1997“highlighted the fact that non- and lower dividend paying stocks experienced a larger volatility than high dividend-paying stocks. Stock volatility was substantially higher after 1997 and this may have contributed to the inflation of the bubble. It was not the main cause but...
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...easy to do business anywhere” is the core value proposition of Alibaba.com, a leading B2B online market place in China with 53.8% market share. Founded in Dec. 1999, Alibaba provides both suppliers and buyers an easy to use online interface where they can match their needs. The report team considered this as an innovation because other than those typical challenges faced by innovative companies; Alibaba also faced specific challenges such as the lack of credit system in China when it was first founded, the severe pressure from capital investors due to the burst of dotcom bubble shortly after its inception, as well as the strong incumbent, eBay, entering China in 2003. By focusing on its core business of B2B online market place, continuously building its IT capability and integrating third-parties to establish a local credit rating system, Alibaba was able to stand out amongst the many players in the early dotcom age in China. At the same time, Alibaba successfully defended its B2B business by proactively entering into the C2C space and compete head to head with eBay. This report explores in specific details of actions undertaken by Alibaba, particularly by its founder Jack Ma, analyzes the impact of those actions, and finally presents an outlook for Alibaba’s business with our recommendations. Background Overview The Business Model of Alibaba Most of Alibaba’s customers nowadays still use a traditional supply chain; the business model of Alibaba is unique because it’s...
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...easy to do business anywhere” is the core value proposition of Alibaba.com, a leading B2B online market place in China with 53.8% market share. Founded in Dec. 1999, Alibaba provides both suppliers and buyers an easy to use online interface where they can match their needs. The report team considered this as an innovation because other than those typical challenges faced by innovative companies; Alibaba also faced specific challenges such as the lack of credit system in China when it was first founded, the severe pressure from capital investors due to the burst of dotcom bubble shortly after its inception, as well as the strong incumbent, eBay, entering China in 2003. By focusing on its core business of B2B online market place, continuously building its IT capability and integrating third-parties to establish a local credit rating system, Alibaba was able to stand out amongst the many players in the early dotcom age in China. At the same time, Alibaba successfully defended its B2B business by proactively entering into the C2C space and compete head to head with eBay. This report explores in specific details of actions undertaken by Alibaba, particularly by its founder Jack Ma, analyzes the impact of those actions, and finally presents an outlook for Alibaba’s business with our recommendations. Background Overview The Business Model of Alibaba Most of Alibaba’s customers nowadays still use a traditional supply chain; the business model of Alibaba is unique because it’s...
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...World Wide Web History Bubble History of the WWW ECOM 210 World Wide Web History Introduction Founded in 1989 the World Wide Web went from an impossible idea to a worldwide phenomenon that has fused itself into the needs of the people. I remember years ago when computers were just those gross green screened monitors that only allowed you to type a report. Now with the help of the internet our use of computer technology has reached amazing heights. We can reach people around the world with just a click of a mouse. “The web has changed the world. It has arguably become the most powerful communication medium the world has ever known” (webfoundation.org). Reading the webs history helps me to really see how the development of this great tool has geared us to an era of becoming completely technically inclined. The web is available everywhere you go from restaurants to coffee shops also with it being a feature on your mobile device it never leaves the side of the consumer. Internet access has become just as much of a need as toilet paper. In most cases jobs, schools and so on has built there curriculum and foundation around it. Without the web we would not have achieved the ability to have direct access to our bank accounts via applications or to send an email picture of friends and family to others around the globe. Although I grew up in the early 80’s at the peak of technology before the internet even existed I now cannot imagine a world without it. “The Internet is...
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