Cover image for Dot.con : the greatest story ever sold
Title:
Dot.con : the greatest story ever sold
Author:
Cassidy, John, 1963-
Personal Author:
Edition:
First edition.
Publication Information:
New York : HarperCollins, [2002]

©2002
Physical Description:
372 pages ; 25 cm
Language:
English
ISBN:
9780060008802
Format :
Book

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HD9696.8.U62 C37 2002 Adult Non-Fiction Open Shelf
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Summary

Summary

When Vannevar Bush, Franklin D. Roosevelt's chief scientific adviser, sat down in 1945 to write a magazine article about the future, he had no idea what he was beginning. Bush's vision of a desktop computer that would contain all of human knowledge inspired the scientists who built the Internet. In the early 1990s, when a British computer programmer devised the World Wide Web and an Illinois student invented an easy-to-use Web browser, the Internet was transformed from a scientific curiosity into the biggest gold rush since the Klondike.

In Dot.con, John Cassidy, one of the country's leading financial journalists and a staff writer at the New Yorker, relates the stories of Netscape, Yahoo!, America Online, Amazon.com, and other Internet companies, large and small. In a lively and entertaining narrative, Cassidy traces the rise of Internet stocks and the development of a populist stock market culture to the end of the Cold War. He shows how an unscrupulous alliance of entrepreneurs such as Jeff Bezos, venture capitalists such as John Doerr, stock analysts such as Mary Meeker, and investment bankers such as Frank Quattrone helped turn an exciting technological development into an unstable and dangerous speculative bubble.

Cassidy doesn't restrict his attention to Silicon Valley and Wall Street. He demonstrates how many prominent journalists and policy makers helped to expand and prolong the bubble, particularly Alan Greenspan, the chairman of the Federal Reserve.

But in the end, Cassidy concludes, responsibility for the Internet boom and bust cannot be placed on any one individual. It was a nationwide epizootic that involved tens of millions of Americans. And now that it is over, the country as a whole is paying a heavy price for succumbing to greed and wishful thinking. An artful blend of storytelling, history, and economics, Dot.con provides the first complete and authoritative account of the biggest financial story of the modern era.


Author Notes

John Cassidy, one of the country's leading business journalists, has been a staff writer at the New Yorker for six years, covering economics and finance. Previously he was business editor of the Sunday Times (London) and deputy editor of the New York Post. He lives in New York


Reviews 3

Booklist Review

Gr. 8-12. In the third volume of the author's Black Book (Diary of a Teenage Stud) series, Florida high-school junior Jonah Black surely wins the award for most unlucky-in-love male teen. In this journal, he once again inadvertently sabotages multiple opportunities to consummate or even begin relationships, and his mishaps are as engaging as ever. It's worth noting that the objects of Jonah's affection run the gamut-- from wholesome surfer girl Posie to brilliant, edgy Molly--yet all are realistic characters with exasperating and wholly believable flaws. While some details of Jonah's personal life are made clear, readers will be intrigued by what's left open, and they will be waiting for the next volume, to be entitled Faster, Faster, Faster. The light tone of the narrative masks some real depth, which the thoughtful reader will savor. Expect a run on this title from teens who enjoyed the previous books. Debbie Carton.


Publisher's Weekly Review

This book's epigraph, "Ever get the feeling you've been cheated?" (by Johnny Rotten), perfectly sets the tone for what follows. Cassidy certainly knows he was cheated by the collapse of Internet stocks, and here he sets out to discover who's to blame. His search includes a history of the stock market (starting in ancient Rome) and finds that most buying manias and speculative bubbles were encouraged by unscrupulous financial professionals. He traces the Internet to Vannevar Bush's work during World War II. Its developers "tended to be young men with long greasy hair, thick glasses, and an obsessive interest in science fiction," who were held in contempt by the rest of the world. But Cassidy, an economics writer at the New Yorker, goes beyond these usual suspects of stock brokers and computer geeks. He devotes two chapters to criticizing Alan Greenspan for making "frequent references to the benefits of new technology," among other things. The author indicts many additional public figures, journalists, analysts, authors and businesspeople by name and finds them guilty. Despite the sensational charges, there is little new here. It's hard to believe that anyone will be shocked to learn that most Internet companies and day traders lost money or that venture capitalists, investment bankers and stock analysts made large fees promoting stocks without subjecting the companies in question to critical scrutiny. Cassidy does not even deliver an entertaining rant. Most of the pages are uninspired chronicles of well-known events. Agents, Andrew Wylie and Jeffrey Posternak. (Feb.) Forecast: The large number of people who lost money in Internet stocks will be predisposed to accept this book's premise. The fair-minded ones will want a better analysis; the angry ones will want more dirt or passion. (c) Copyright PWxyz, LLC. All rights reserved


Library Journal Review

Cassidy, a business journalist for The New Yorker, has written a fascinating account of the "development of the Internet bubble, and the broader stock market boom of the late 1990s." The author begins with the development of the first digital computer, the emergence of the personal computer, and the building of a computer network called ARPANET, which evolved into the global network we now know as the Internet. He goes on to describe the invention of the World Wide Web by a CERN scientist and the players involved in the beginning of the electronic commerce boom. The companies profiled include Netscape, Yahoo!, Priceline, AOL, Amazon, and a number of other dot-coms. Cassidy tells the story of the Wall Street analysts who touted dot-com stocks even though the companies were losing millions of dollars and criticizes Alan Greenspan for taking a hands-off approach to reining in the stock market until it was too late. The chapters discuss the zeal of venture capitalists to fund these e-commerce companies as well as the willingness of the single investor to buy their stocks while ignoring the signs of disaster ahead. This absorbing tale of an ongoing chapter in the history of the stock market is highly recommended for all libraries. Stacey Marien, American Univ., Washington, DC (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.


Excerpts

Excerpts

Dot.Con Prologue One of the strange things about history is how certain periods from long ago can seem recent, while some events that just happened, relatively speaking, can appear ancient. As these words are being written, President George W. Bush has declared war on terrorism, and American warplanes are heading for Central Asia. Suddenly the Cold War, with its attendant undercurrent of fear, feels a lot closer, while the carefree 1990s seem like a distant age. It is too early to judge the ultimate historic significance of the terrorist attacks that were carried out on the World Trade Center and the Pentagon on September 11, 2001, but one thing is clear: they changed America's view of itself. The belief in U.S. military and economic invulnerability, which grew stronger by the year during the 1990s, until it was taken for granted by many, has been violently undermined. In the wake of the attacks, America's attention has shifted from the secondary human concerns that dominated during the 1990s boom (saving for old age, getting rich) to the primary matters of human survival (staying safe, providing a livelihood for one's family). Already, it is hard to fathom that just a couple of years ago many intelligent Americans believed that the marriage of computers and communications networks had ushered in a new era of permanent peace and prosperity. Depending on which Wall Street or Silicon Valley guru you listened to, the Internet was the most revolutionary development since the electric dynamo, the printing press, or the wheel. The most striking manifestation of this thinking was the extraordinary prices that people were willing to pay to invest in Internet companies. In nearly every sector of the economy, entrepreneurs, many barely out of college, were rushing to establish online firms and issue stock on the Nasdaq, which was heading upward at a vertiginous rate. Names like Marc Andreessen, Jerry Yang, and Jeff Bezos were being uttered with awe. In March 1999, Priceline.com, an Internet company that operated a site on the World Wide Web where people could name their price for airline tickets, was preparing to do an initial public offering (IPO). In order to introduce Priceline.com's executives to Wall Street analysts and fund managers, Morgan Stanley, the investment bank that was managing the IPO, hired a ballroom at the Metropolitan Club, at 1 East Sixtieth Street, a fitting location. The Metropolitan, which John Pierpont Morgan founded and Stanford White designed, is a lavish remnant of a previous gilded age. Four stories high, its white marble exterior is fronted by six Roman columns and an ornate cornice. After the guests had picked at their lunch, Richard S. Braddock, Priceline.com's chairman and chief executive, told them that his firm had the potential to revolutionize not just the travel business, but automobile sales and financial services, too. This was a grand claim from a start-up that had been in business for less than a year and employed fewer than two hundred people, but nobody in the room queried Braddock's presentation. By the standards of the time, Priceline.com had impressive credentials. Jay S. Walker, the company's founder, was a Connecticut entrepreneur who had already made one fortune by peddling magazine subscriptions in credit card bills. Braddock was a former president of Citicorp, and Priceline.com's board of directors included Paul Allaire, a former chairman of Xerox Corporation, N.J. Nicholas Jr., a former president of Time Inc., and Marshall Loeb, a former managing editor of Fortune magazine. William Shatner, the actor who played Captain Kirk in Star Trek, had appeared in a series of popular radio ads for the firm. Morgan Stanley's star analyst, Mary Meeker, recently dubbed "Queen of the 'Net" by Barron's, the weekly investment newspaper, had helped coach the Priceline.com team for their presentation, and she was sitting in the back of the room as they spoke. The word on Wall Street was that Priceline.com would follow the path of America Online, Yahoo!, and eBay to become an "Internet blue chip." The only question people in the investment commnity were asking was how much stock they would be able to lay their hands on. Underwriters reserved Internet IPOs for their most favored clients. Other investors had to wait until trading started on the open market before they could buy any stock. On the morning of March 30, 10 million shares of Priceline.com opened on the Nasdaq National Market under the symbol PCLN. They were issued at $16 each, but the price immediately jumped to $85. At the close of trading, the stock stood at $68; it had risen 425 percent on the day. Priceline.com was valued at almost $10 billion--more than United Airlines, Continental Airlines and Northwest Airlines combined. Walker's stake in the company was worth $4.3 billion. Airlines like United and Continental own valuable terminals, landing slots, and well-known brand names--not to mention their planes. Priceline.com owned some software, a couple of powerful computers, and an untested brand name. Despite this disparity, few on Wall Street were surprised by Priceline.com's IPO. Such events had become an everyday occurrence. The New York Times didn't think the Story merited a mention on the front page of the next day's edition and instead relegated it to the business section. "It doesn't matter what these companies do or how they are priced," David Simons, an analyst at Digital Video Investments, told the paper. "Each new Internet IPO is nothing more than red meat to the mad dogs." Penny Keo, a stock analyst at Renaissance Capital, saw things differently. "We like Priceline's business model," she said. This was an interesting statement. Priceline.com started operating on April 6, 1998. By the end of the year it had sold slightly more than $35 million worth of airline tickets, which cost it $36.5 million. Dot.Con . Copyright © by John Cassidy. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold. Excerpted from Dot.con: The Greatest Story Ever Sold by John Cassidy All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Table of Contents

Prologuep. 1
Chapter 1 From memex to world wide webp. 9
Chapter 2 Popular capitalismp. 25
Chapter 3 Information superhighwayp. 37
Chapter 4 Netscapep. 51
Chapter 5 The stock marketp. 66
Chapter 6 Ipop. 76
Chapter 7 Yahoo!p. 89
Chapter 8 Battle for the 'netp. 104
Chapter 9 Irrational exuberancep. 118
Chapter 10 amazon.comp. 135
Chapter 11 The new economyp. 150
Chapter 12 A media bubblep. 166
Chapter 13 Greenspan's green lightp. 182
Chapter 14 Euphoriap. 191
Chapter 15 Queen of the 'netp. 206
Chapter 16 Trading nationp. 221
Chapter 17 Web dreamsp. 235
Chapter 18 Warning signsp. 249
Chapter 19 The fed strikesp. 264
Chapter 20 Crashp. 279
Chapter 21 Dead dotcomsp. 295
Epiloguep. 313
Notesp. 327
Appendixp. 347
Indexp. 365