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Oh please. Apparently our memories are very short. Foursquare raised $20 million with 27 employees? Big deal. Pets.com got $300 million. Webvan raised $1.2 _BIL

Oh please. Apparently our memories are very short. Foursquare raised $20 million with 27 employees? Big deal. Pets.com got $300 million. Webvan raised $1.2 _BILLION_ dollars. Remember when everyone was GOING PUBLIC without even making as much as a dime? This was when the average web server was $25k and 1/25th as powerful as what we're buying for $4k now. This was back when you needed millions in Oracle licensing to run and scale an ecommerce business. Bandwidth costs were fifty times what they are now. This was when businesses spent hundreds of thousands of dollars on lavish parties. Flooz spent $8 million (out of it's $35m) just on TV advertising. Pets.com spent $1.2 million on _ONE_ superbowl ad. Now that's the stuff!

deleted 16y ago
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Jabbles 16y ago
log2(25 * 25 / 4) * 1.5 ~ 11 years ago - 1999! It checks out!
eli 16y ago
Surely there would be many more unprofitable web companies going public today, were it not for laws like SOX passed after that last bubble popped.
- jacquesm 16y ago
  Sarbanes Oxley had very little to do with the web bubble but everything with fraud. A bubble is related to valuing stocks for more than they're worth due to irrational expectations by the buyers of stocks, not necessarily fraud at the companies invested in. In other words, you can have fraud without a bubble and vice-versa, SOX is mostly about good accounting practices, and corporate oversight and should probably be seen in the light of reducing the chances of companies overstating their revenues by 'creative' accounting practices without being caught at an earlier stage. The internet bubble would have happened regardless of these rules and regulations being implemented at an earlier date, it might have collapsed later or slower once the investors realized that the internet wasn't going to be some kind of magical solution to all the worlds problems. Typically in a bubble you'll see prices go up and up and investors with little or no idea of what they're doing are lining up to buy stocks that have very little intrinsic value at prices higher than seems reasonable / responsible. If the companies that they invest in commit fraud then that's going to make matter worse but a bubble can happen without any action on the part of the companies invested in, it is mostly an investor issue, fraud is mostly a corporate issue.
  - natnat 16y ago
    SOX compliance is also really expensive for smaller businesses, though, and it makes IPO's seem like a bad idea unless the company can be really, really huge. Companies with more than $5B in revenue only spent 0.6% of their revenue on SOX compliance, while companies with less than $100M spent on average 2.55%. This doesn't really have anything to do either way with a bubble, but it does disincentivize a company from going public.

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Jabbles 16y ago

log2(25 * 25 / 4) * 1.5 ~ 11 years ago - 1999! It checks out!

eli 16y ago

Surely there would be many more unprofitable web companies going public today, were it not for laws like SOX passed after that last bubble popped.

jacquesm 16y ago
Sarbanes Oxley had very little to do with the web bubble but everything with fraud. A bubble is related to valuing stocks for more than they're worth due to irrational expectations by the buyers of stocks, not necessarily fraud at the companies invested in. In other words, you can have fraud without a bubble and vice-versa, SOX is mostly about good accounting practices, and corporate oversight and should probably be seen in the light of reducing the chances of companies overstating their revenues by 'creative' accounting practices without being caught at an earlier stage. The internet bubble would have happened regardless of these rules and regulations being implemented at an earlier date, it might have collapsed later or slower once the investors realized that the internet wasn't going to be some kind of magical solution to all the worlds problems. Typically in a bubble you'll see prices go up and up and investors with little or no idea of what they're doing are lining up to buy stocks that have very little intrinsic value at prices higher than seems reasonable / responsible. If the companies that they invest in commit fraud then that's going to make matter worse but a bubble can happen without any action on the part of the companies invested in, it is mostly an investor issue, fraud is mostly a corporate issue.
- natnat 16y ago
  SOX compliance is also really expensive for smaller businesses, though, and it makes IPO's seem like a bad idea unless the company can be really, really huge. Companies with more than $5B in revenue only spent 0.6% of their revenue on SOX compliance, while companies with less than $100M spent on average 2.55%. This doesn't really have anything to do either way with a bubble, but it does disincentivize a company from going public.