2006-06-29 20:36:44 · 9 answers · asked by goozbee 1 in Business & Finance ➔ Investing
In one word, I think 'reality' would be the main reason.
As the fervour grew in the late 90's for tech stocks, everyone believed that the 'new paradigm' for business would change everything. Market share was more important than profits ... eyeballs more important than income ... making a huge loss was ok if there were profits forecasted for the future ... any business doing anything online was 'exciting' ... etc etc.
Then reality started to dawn on investors, venture capitalists, business owners and managers that the old ways of business needed to apply to the web. The internet was and is not immune.
Huge speculation is just that. Huge speculation. The massive market valuations were based on many strange ideas and the companies could not operate in the way that the market needed - profitably.
I believe that reality arrived.
2006-06-30 03:02:06 · answer #1 · answered by Anonymous · 1⤊ 1⤋
The dot.com bubble burst when the Microsoft was judged to have acted anti competitively in its competition with Netscape by bundling MS Explorer in the Windows O/S. This was the catalyst that shook up the over inflated NASDAQ stock market. The dot.com as a group were finally looked at more carefully and they had business models that would never be profitable and were only driven up in price by what Alan Greenspan called "Irrational Exhuberance."
2006-06-29 23:38:03 · answer #2 · answered by Edward J Wolf 2 · 1⤊ 0⤋
People paid more than the stocks were worth thinking that some one else ("the greater fool") would pay even more. Prices went up, up, up even on companies with no profits and no reason to believe they would ever turn a profit. Then reality set in and ... pop!
2006-06-30 06:33:16 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Excess air inside the bubble than it can hold.
Simple Buddy,
Apply Demand-Supply rule
2006-06-29 20:41:22 · answer #4 · answered by jugnu 3 · 0⤊ 0⤋
A better question is "What caused the don-com bubble?"
The answer is: Greed.
2006-06-30 04:44:04 · answer #5 · answered by Ranto 7 · 0⤊ 0⤋
because authorities helped to create the debacle we are in now. If lenders were no longer ordered to diminish their criteria so all people might want to own a house, this does no longer be an concern.
2016-10-13 23:47:13 · answer #6 · answered by filonuk 4 · 0⤊ 0⤋
To much build out and Y2K hysteria.
2006-07-01 16:29:04 · answer #7 · answered by GC 1 · 0⤊ 0⤋
The reality that making money is a lot harder than making promises.
2006-06-29 20:42:00 · answer #8 · answered by A4Q 3 · 0⤊ 0⤋
irrational exuberance
2006-06-29 21:50:57 · answer #9 · answered by Greg T 1 · 0⤊ 0⤋