Georgios Chasiotis


How Close Are We to a New Dot-com Bubble?

Image Source: Hello I’m Nik on Unsplash

The dot-com bubble, the dot-com boom, dot-com crash, tech bubble or internet bubble.

You can call it however you like.

I prefer the “dot-com crash,” so I’ll use it for this story.

Let me Take you Back in 1999

In November 1993, the Mosaic (also known as NCSA Mosaic browser was officially released.

Image Source:

The birth of Mosaic gave regular people access to the web.

After a while, Mosaic became Netscape, which released its Netscape Navigator browser in 1994.

Netscape Navigator was an instant success.

In less than 12 months, almost 80% of the total browser market was using it to access the internet.

That lead to an IPO in August 1995.

Some people call Netscape’s IPO as “the big bang of the internet era.”

After its massive IPO — and within five months — its stock skyrocketed from $28 per share to $174 per share.

Source: From Zero to One by Peter Thiel

At the same time, other well-known internet companies like Yahoo! and Amazon were crushing it, too.

Internet companies seemed to have excessively high growth and valuations that had nothing to do with their actual value.

Several voices — like the one of Alan Greenspan — were trying to warn investors and founders about this “irrational exuberance.”

After a series of unfortunate events, the dot-com bubble burst in 1999.

“Yes,” there were many companies like eBay, Amazon and PayPal that survived.

There were several others though that disappeared overnight, along with the money and ambitions of their founders and investors.

Does This Story Sound Familiar?

I know what you are thinking:

“It happened once; it can’t happen again.”

I won’t disagree with you.

Let’s see where we are right now though.

According to Crunchbase, the activity of the week as of today (Sun May 12) was:

Image Source: Crunchbase

257 rounds announced; not in one quarter or one month but in a week.

$19.4B (with a B!) in total acquisitions; again, not in one quarter or in one month but in just a week.

Tech companies go public one after another in excessively high valuations.

The most interesting part?

That even though some of them are not yet profitable, they still file for IPOs.

Needless to say that 2018 was a record year for the global venture capital market.

Moreover, a new trend seems to emerge in VCs, which according to Crunchbase is:

“The tendency for some companies to raise $100 million or more in a single round of outside funding.”

You could say that this “irrational exuberance” may lead to unfortunate events, similar to those that followed the dot-com crash.

Or maybe not…

Let’s Get Back to Reality

Skepticism — up to a certain point — is acceptable. (Considering what happened in the past.)

Pessimism, on the other hand, is not.

All the data I shared with you don’t imply that we are close to a bubble.

Internet companies are growing — and will continue to do so — because internet usage is growing, too.

Online users are more, and thus online buyers are more.

In fact, more than 4.388 billion people are using the internet right now.

That’s a 2,885% increase if you think that in 1999 there were 147 million internet users.

And, as you already know, demand creates the need for supply.

There is no doubt that — in many cases — we live in a time of exaggeration.

Can this be a problem on its own? And, can it lead to a new dot-com crash?

I want to believe that it won’t.

But, I have my doubts.

So what the future holds?

We just have to wait and see.

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