The dot-com bubble of the late 90s and early 2000s saw fortunes made and lost, sometimes with surprising speed. It also saw the foundation of the modern internet and the origins of some of the biggest names in tech. While many of these websites failed, they served as precursors to some of today’s leading modern web companies.
Go back in time with a look at some of the biggest successes (and failures) of those heady days and see where the key players are now. This post serves as a companion to our earlier reports 92 of the Biggest, Costliest Startup Failures of All Time and The Top 20 Reasons Startups Fail.
Broadcast.com was an internet radio company founded as AudioNet in September 1995 by Christopher Jaeb; Todd Wagner and Mark Cuban later led the organization and eventually sold it to Yahoo on April 1, 1999 for $5.7 billion.
Jaeb netted a major windfall in the wake of Broadcast.com’s massive sale, and in 2003, moved to Hawaii with his family. In 2007, he founded Common Ground Kauai. CGK is a sustainability center focused on providing environmental education, improved access to fresh fruits and vegetables, and sustainably produced goods.
Wagner became an instant billionaire after the sale of Broadcast.com to Yahoo. Wagner owns (with Mark Cuban) production company 2929 Productions, distributor Magnolia Pictures, and Landmark Theatres. He also maintains interests in Lion’s Gate films and a stake in the Dallas Mavericks. The Wagner Foundation is his charitable organization and he has also helped start after-school and supplemental skills programs such as the MIRACLES program.
Cuban, too, became an instant billionaire after Yahoo bought Broadcast.com. Cuban owns the Dallas Mavericks, Landmark Theatres, and Magnolia Pictures. He regularly appears on the TV show Shark Tank as one of the titular sharks and is an avid angel investor. His charity is the Mark Cuban Foundation.
The webhosting service that was/is singlehandedly responsible for many of the strange, poorly designed sites that once populated the internet. Founded by David Bohnett and John Rezner in 1994, it went public in 1998 and was acquired by Yahoo in 1999.
David C. Bohnett
After GeoCities’ IPO in 1998 and acquisition by Yahoo in 1999, Bohnett made about $300 million. Since then, he’s been active through his charitable foundation, the David Bohnett Foundation, and invests in new companies through his VC fund Baroda Ventures.
Rezner netted $100 million after the sale of GeoCities. He currently sits on the board of directors of Acesis, a web-based platform for healthcare quality improvement and compliance documentation.
theGlobe was a social networking site founded in 1994 by Stephan Paternot and Todd Krizelman, which went public on November 13, 1998. It posted the largest first-day gain of any IPO up to that date, with shares closing up 606% from their starting price. By 2001, the first dot-com bubble burst and the stock plummeted from $97 a share to under 10 cents.
Paternot helped found the company while still in college and moved to New York City to build the business. He left theglobe.com in 2000 and took some time off before starting a seed capital fund in 2002. He is currently the GP of Actarus Funds, an angel seed fund that primarily invests in internet startups.
Despite the skyrocketing first-day stock price of Paternot’s and Krizelman’s shares in theGlobe, within two years, the stock had tanked. Krizelman reports that he was fortunate enough to put some of his previously held wealth into other people’s companies, allowing him to weather the impact of theGlobe’s collapse. Today he runs ad-intelligence platform MediaRadar, which he says he’s dedicated to running “like a publicly held company from the beginning [with] very tight financial controls … ” in stark contrast to the excesses of the first dot-com era.
Napster was one of the earliest, most widely used, music file-sharing websites. It was the subject of lawsuits and ultimately got shut down before being bought up by Roxio, then Best Buy, and then merged with Rhapsody.
Fanning programmed the original Napster and was even called “one of the top 100 innovators in the world under the age of 35” by MIT Technology Review TR100 in 2002. His next venture was a music marketplace called Snocap, which failed. In 2006, Fanning worked on Rupture, a social network for World of Warcraft players. It was acquired by Electronic Arts, then shut down with a round of layoffs that claimed the whole team in 2010. Months later, he founded Path.com (a social photo-sharing site that is still active) and then, in 2011, reunited with Sean Parker to build Airtime.com, a live video website.
Programming prodigy Sean Parker was instrumental in helping get Napster off the ground. When Napster fell, Parker moved on to social network/online address book Plaxo, then joined Facebook as president. After stepping down from Facebook in 2005, he continued to meet and advise Mark Zuckerberg. In 2006, he joined the Founders Fund VC firm, invested in Spotify in 2010, and co-founded Airtime in 2011. Other ventures he’s been involved in include concert app WillCall, Brigade Media, and The People’s Operator. He’s also active in philanthropic activities through his charitable organization, the Parker Foundation.
Infospace (now Blucora)
Naveen Jain left Microsoft and founded Infospace in March 1996. It was designed to be an online yellow pages funded by ads and also included some simple HTML-based chat rooms. It raised $75 million with an IPO in December of 1998 and acquired Go2Net in July of 2000. However, in that same year, InfoSpace used controversial accounting methods to state a $46 million profit instead of its actual losses of $282 million. Executives even disregarded SEC rules, selling off large chunks of their personal stock. Jain served as CEO until 2000, when Russell Horowitz briefly took over in the wake of the merger with Go2Net. Jain resumed his role in 2001 only to be forced out by the board in December 2002. By June 2002, the stock price had plummeted to $2.67 from a high of $1,305 in March 2000.
Naveen’s next move after Infospace was to found Intelius in 2003 (right across the street from his old company). Intelius was a background check company that went public in 2008 and was sold in 2015 to private equity firm H.I.G. Capital, at which time a new CEO was appointed. In 2010, Jain co-founded another company called “Moon Express,” the goal of which is to mine precious materials in space. NASA apparently thought it was a good idea, awarding Moon Express a contract. Jain is also on the board of the Kairos Society, a charitable organization founded by his son.
This British-based travel site was founded by Lady Lane-Fox and Brent Hoberman in 1998 and had 500,000 regular users by 2002. Its IPO took place in March of 2000 with an opening price of £3.80 (about $7.60 at the time), hitting £5.11 ($10.22) later that day, but dropping to £2.70 ($5.40) within two weeks. In November 2001, lastminute.com reported £54 million ($108M) in losses. Two years later, Lane-Fox announced that she was stepping down as director of the company. In 2005, it was acquired by Sabre Holdings, which owned Travelocity.
When lastminute.com was acquired, Lane-Fox’s share was bought out at £13 million ($26M). In 2005, she helped found Lucky Voice, a company with a series of karaoke clubs and even a desktop and mobile app. She serves on the board of Britain’s Channel 4, has been active with interior design website mydeco.com (with her former lastminute.com partner, Brent Hoberman), worked with the British government, and is a member of the House of Lords.
After serving as CEO of lastminute.com from 2005 until April 2006, then transitioning to Chairman and Chief Strategy Officer, Hoberman left the company completely in early 2007. Since then, he’s worked with former business partner Lady Lane-Fox on mydeco.com and become a Governor of the University of the Arts London and a member of the board of Guardian Media Group. He’s made angel investments in several internet companies and is a co-founder of Founders Forum, “a private network of the world’s leading digital and technology entrepreneurs.”
Lycos began in 1994 as a project at Carnegie Mellon University’s Pittsburgh campus and brought in early VC funding from CMGI. Under employee #1 and CEO Bob Davis, Lycos became an ad-supported web portal. Its popularity boomed throughout the 90s, becoming one of the internet’s key destinations and building a global presence. It also acquired a handful of other internet companies during its ascendancy. Lycos’s 1996 IPO is said to have been one of the fastest IPOs (from conception to IPO) of any company on the NASDAQ up to that point in history. Unlike many of the companies mentioned on this list, Lycos is still alive and kicking, operating an internet domain name-purchasing site, email and photo-sharing service, and more. Investor Fred Wilson recalls an early visit to Lycos’s Point.com offices in Union Square as the first time he met Jerry Colonna, with whom he would later found Flatiron Partners.
Davis shepherded the fledgling internet company through its IPO and the acquisition of a portfolio of other internet companies to bolster the Lycos brand, including Gamesville, WhoWhere, Wired Digital, and others. Eventually, Telefonica acquired Lycos and Davis stayed on as CEO until his departure in 2001 to found VC firm Highland Capital Partners. He’s also been on the boards of several companies: nuTonomy, Freshly, and Handy HQ, to name a few.
AltaVista was one of the first search engines on the internet, with search technology created by Louis Monier and Michael Burrows. Launched in December of 1995, by 1996 AltaVista was supplying all search results for Yahoo.com. AltaVista was on track for an IPO before a stock market downturn in spring of 1999 put an end to that plan. Even with an early lead, AltaVista eventually lost ground to Google, but Yahoo still acquired the company in 2003, and finally shuttered it in July 2013. In 2012, AltaVista’s Babel Fish translator was supplanted by Bing! Translate and now babelfish.yahoo.com directs back to the main Yahoo site.
Not every early dot-com bubble story is a boom-and-bust flameout. Michael Burrows was instrumental in creating AltaVista’s search technology, worked briefly for Microsoft, then moved on to Google where he worked on their search system and created the Burrows-Wheeler transform, an algorithm used in data compression. He still works for Google.
Monier’s post-AltaVista career included stints at eBay and Google. In 2007, he left Google to join search engine startup Cuil, where he was VP of Products; that job only lasted a month. He also co-founded Qwiki, a video-sharing startup, which was bought by Yahoo in 2014. In addition, he served as technical advisor to Context Scout, Clearwell Systems, Proximic, Five Apes, and Fotopedia, and served as chief scientist and head of product at Import.io, founder and CEO of Kyron, and chief scientist at Proximic.
Yahoo’s latest chapter is still unfolding, with the announcement this summer that its core business would be sold to Verizon for $4.8B. But in 1995, such an outcome would have been almost unthinkable. Founded in 1994 by Jerry Yang and David Filo, Yahoo came out of the internet gate early with search functions, message boards, email, news, and more. It was the internet as far as many early users were concerned. Despite its steady decline in quality (perceived or actual) since the 2000s, web traffic measurement company Alexa still registered it as one of the most-visited sites in the world as of September 2016. Nonetheless, the company has long struggled to stay competitive after its heyday, with moves like the appointment of Marissa Mayer as president in July 2012 and the billion-dollar purchase of Tumblr in May of 2013.
In 1995, when Yahoo raised a $2 million funding round from Sequoia Capital, both Yang and Filo were each appointed “Chief Yahoos.” In 2007, Yahoo’s loss of ground to Google prompted the board to replace CEO Tim Koogle with Yang, who served as CEO until 2009. It was during this time that Yahoo invested in Chinese internet company Alibaba and had several other controversial dealings with China. In 2012, Yang left the company he helped found and abandoned his board seats at Yahoo and Alibaba. Since then, he’s been an active investor via his firm AME Cloud Ventures, which has given funding to over 50 startups. In 2014, he rejoined Alibaba’s board.
Filo created the software that served up web pages in early versions of Yahoo. He managed to stay out of the spotlight throughout his time at Yahoo and through contentious sales negotiations in July 2016. He remains on the board at Yahoo at time of writing and is active with his wife, Angela, in charitable efforts like the Stanford Interdisciplinary Graduate Fellowship. They also helped create the K12 Start Fund to invest in ed tech companies and the Yellow Chair Foundation, which gives grants to nonprofits in the education, civil rights, and environmental fields.
Pets.com had a simple name and a simple mission: to sell pet supplies online. The site was founded by Greg McLemore and quickly garnered funding from VC firm Hummer Winblad and Amazon.com, which bought a 54% stake. Julie Wainwright was brought in as CEO and presided over the site’s decline, as it faced the consequences of being too-early in this category and seeing the financing window close. When Pets.com went down just two years after launching, it took $300M of funding with it and closed out with a stock price of 19 cents, down from $11 per share at its February 2000 IPO. The fast rise and fall came despite sticky advertising, with a major appearance at 1999’s Macy’s Thanksgiving Day Parade, a spot during the 2000 Super Bowl, and a chatty sock puppet that proved popular and even went on TV talk shows.
McLemore is a serial entrepreneur whose post-Pets.com credits include managing the brick-and-mortar Museum of the Game, founding Data Refinery and WebMagic, and serving as Chief Entrepreneurial Officer for Octane Realty & Development. He was largely spared the drama of Pets.com’s final days and apparently moved on from one venture to the next pretty smoothly.
In the post-Pets.com era CEO Julie Wainwright went on to found SmartNow — a website aimed at helping women ages 35-55 deal with a variety of issues (health, wellness, relationships, etc.) — which shuttered in 2011. Wainwright then wrote a book entitled ReBoot: My Five Life-Changing Mistakes and How I Have Moved On. She also went on to found TheRealReal.com, an upscale online consignment shop.
More than 15 years before Amazon Now would completely revolutionize impulse buying in many major cities, investment bankers Joseph Park and Yong Kang founded Kozmo.com. The site promised users free one-hour delivery of a wide array of goods. Analysts questioned how a business offering free one-hour delivery would make any money, and they were right to be skeptical, as even a promotional deal with Starbucks couldn’t help make the company profitable. An issue with perceived bias in Kozmo’s delivery zones didn’t help either. The company shuttered in April of 2001, just over three years after opening its doors.
While at Amazon, Park developed Askville, a precursor to Quora. Then in June 2009, he left Amazon to become president of biblegateway.com.
Kang’s post-Kozmo career has been relatively quiet, moving on to Citi, then Lehman Brothers, then Barclays Capital. He’s a founder and managing partner of KPK Capital, which works in public and private equity, fixed income, and real estate investments. Other ventures include serving as an SVP for BG Strategic Advisors and as an investment professional for Cambridge Capital.
These days, coworking spaces, incubators, and accelerators are seemingly ubiquitous, but in the early days of the internet, there was far less infrastructure to help entrepreneurs start a business. That’s where Startups.com came in. Co-founders Donna Jensen (CEO) and Justin Segal (VP Corporate Development) saw all the new businesses being launched during the dot-com bubble and sought to provide these young companies with traditional business-planning services. For a fee (starting at $25,000), the team at Startups.com would help you with your real estate, decor and furniture, IT, legal services, payroll, benefits, insurance, and even marketing. Almost all of these services have since been unbundled by, ironically, other startups. Startups.com launched in March of 2000 with venture backing, and by May it had raised an additional $15 million in funding — just as the dot-com bubble was bursting. After multiple failed pivots, Startups.com shut down, actually returning millions of dollars back to their financiers.
After Startups.com shuttered, Jensen went on to teach MBA courses at UNC Chapel Hill. She then consulted for Vibrant Ventures, a company which provided consulting services to banks, law firms, and startups. Her most recent company is called Belle Boutiques, a global online furniture store.
Segal’s career has been primarily focused around real estate, running Boxer Property since 1992 and Core Group Properties since 1996. He also co-founded Stemmons Enterprise in January of 2016. Stemmons is an enterprise software company that provides an array of business services. From 2008 to 2016, Segal was a board member of YES Prep schools, a charter school system focused on aiding Houston’s underserved communities.
Boo.com was an online apparel retailer founded by Ernst Malmsten and Kajsa Leander and launched in 1999. Its flameout took about 18 months and by the end, the company had consumed $135 million of venture capital.
There’s no question that failure makes a good story, and in 2002, Malmsten’s book Boo Hoo: A dot.com Story from Concept to Catastrophe was published. His most recent venture is a return to e-commerce as chief executive of London-based Lara Bohinc, an online retailer that sells luxury goods.
After Boo.com came down, Leander moved to Italy with her husband and the two started the advertising agency Studio Berg.
In 1996, Louis Borders, founder of Borders bookstores (a famous casualty of the modern e-commerce era), had the crazy idea to let people order their groceries online and have them delivered to their homes. To achieve this, Louis Borders raised $396 million through an IPO in late 1999. After several years of sustained losses, though, the company finally crashed in 2001. But Borders’ dream of people never having to leave their homes for groceries has since been adopted by Amazon and countless startups disrupting grocery stores. It took Amazon over a decade to get the system that Webvan pioneered right, with the e-commerce giant even relying on many Webvan executives and infrastructure to build Amazon Fresh.
The founder is back in the e-commerce game with HDS, a soon-to-launch luxury “online mall” where users can shop and have their orders filled at HDS-owned warehouses and delivered by HDS couriers. The service is said to be rolling out in 2017. Borders is also active with Mercury Startups, a company which pairs startups with seasoned executives and funding.
Excite was one of the earliest online services on the internet, created in 1994 by a half-dozen Stanford students, including Joe Kraus, and functioning as a web portal with early search functions. The project was commissioned by International Data Group for $80,000 and quickly garnered additional investments.
Kleiner Perkins Caufield & Byers provided over $1.5 million in a deal that was spearheaded by Vinod Khosla. Institutional Venture Partners kicked in a further $1.5 million before the service formally launched late in 1995. The following January, George Bell was hired as CEO. The fledgling service went public in April of 1996, during which Intuit bought a 19% stake in the company. Following this, Excite acquired comparison shopping agent Netbot and entered into a deal with Ticketmaster to provide online ticketing.
Then the bottom dropped out: In March of 1998, Excite announced that its net losses totaled about $30 million and that it only had cash to last through December. This shakeup prompted talks of trying to bail out the service, and eventually the company merged with @Home Network, becoming “Excite@Home.” This merger was far from a magic bullet, however, and by October 2001, Excite@Home filed for Chapter 11.
After helping found Excite@Home, Kraus went on to launch Digitalconsumer.org, a lobbying group dedicated to expanding consumer fair-use rights within digital media. He’s also on the board of the Electronic Frontier Foundation, a nonprofit group focused on digital rights. During his time as CEO of JotSpot, which provided wiki software for businesses, the company was purchased by Google. There Kraus has led product development on projects like Open Social. He’s also been active in angel investing for much of his career and became a partner at Google Ventures in 2009.
It’s well known that Yahoo passed on buying Google (twice), but in 1998, Excite also had a chance to acquire the future search giant for only $1 million, with the price ultimately coming down even further (after some haggling by Vinod Khosla) to $750,000. Bell has defended his decision to pass on the offer by saying that, at the time, services like Excite were more interested in keeping users on their sites than sending them elsewhere. In any case, the missed opportunity doesn’t seem to have hurt his career: Bell went on to become CEO of college savings site Upromise and Chairman of the Board for the Mass Technology Leadership Council. He also sits on numerous company boards and became General Catalyst Partners’ Executive in Residence in 2005.
Infoseek was founded by Steve Kirsch in 1994. By 1997, it had 7.3 million monthly visitors. In 1998, Disney acquired it and merged it with another technology company it owned called Starwave to create Go.com. One of Infoseek’s major innovations was selling advertising on a cost-per-impression (CPM) basis. It was also the first search engine company to employ behavioral targeting. These innovations weren’t enough to keep Disney interested, though, and in 2001, they shut down the service and laid off the staff. Parts of the business would be sold off to various other companies and the Infoseek brand name is still in operation in Australia, Japan, and Poland.
Kirsch left Infoseek in 1999 and became CEO of Propel Software. That year, he also founded the Kirsch Foundation, which continues to be active in a wide array of philanthropic activities. Other business ventures include spam filter Abaca Technology and identity solution OneID. He’s also currently the CEO of Token, a startup working on a next-gen payment solution.
Robin Li, who served as an early member of the engineering team at Infoseek, left the company in 1999, and moved to China where he co-founded Chinese search engine Baidu. The company went public in 2005 and Yang is still there. In 2014, Robin Li was appointed as a co-chair of the UN’s Independent Expert Advisory Group on Data Revolution for Sustainable Development.
Ask Jeeves (now Ask.com)
Ask Jeeves was founded in 1996 by Garrett Gruener and David Warthen, and its software was implemented by Gary Chevsky. Its popularity peaked in the pre-Google era, owing largely to its novel “Jeeves” persona, an online butler who would fetch users the information they’d requested. Users were also encouraged to use natural language to actually “ask Jeeves” their questions.
The format was an early precursor to the natural language search function now used by Google Instant, which allows searchers to type their query using natural speech and auto-fills possible query options. The Jeeves persona was retired in 2006, but revived on UK/Ireland sites in 2009. The company received early funding from Highland Capital Partners, Institutional Venture Partners, and The RODA Group, and went public in July of 1999. From there, stock prices boomed to a high of $190 per share that same year, but had dropped to $.86 per share by 2002. The site has since undergone a variety of changes (including renaming itself Ask.com) and in 2010, realizing that they couldn’t compete with Google, shut down their search engine, but remained active as a question-and-answer site.
Gruener currently serves as executive chairman of Nanōmix, Inc., a biosensor and diagnostics company. He’s also a cofounder of Alta Partners, a firm that invests in biotechnology and life science startups.
Warthen has served as CTO and cofounder for a variety of startups, including video-streaming site GlobalStreams, videogame company Eye Games, and others. He’s currently the CTO of exactly.me, a discovery and messaging app startup that he co-founded.
After leaving Ask.com in 2006, Chevsky served as VP of engineering for Symantex’s consumer products division. He’s currently the chief development officer for Tango, a mobile messaging service.
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Image by Mark Coggins (chap09) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons.
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