Dot.con: How America Lost Its Mind and Money in the Internet Era | John Cassidy 

#prologue

• The day Priceline.com IPO'd, they were worth more than several airlines combined, despite:
  • The year before (1998) they had literally lost $144 million. In its prospectus (legal doc filed with SEC before issuing stock), they had clear warnings like "We are not profitable and expect to continue to incur losses."
  • In the next few weeks their valuation grew to be worth more than the entire US airline industry.
• All speculative bubbles go through four stages: (1) displacement (few experts respond to some shift), (2) boom (skepticism gives way to greed), (3) euphoria (all sense goes out the window), (4) bust (valuation crashes down).
• Greater Fool Theory keeps the bubble sustained (few investors truly believed the $10B valuation of Priceline, but they believed someone else would pay more).

#1. from memex to world wide web

• The important technical understanding for me is:
  • Internet is just a set of shared protocols (TCP/IP). NSFNET (which replaced ARPANET) was the backbone (wires connecting computers, contracted out to be built by MCI, IBM, …).
  • Two PCs outside of institutions couldn't just talk, you had to be at a university, lab, or gov agency.
  • But personal communication aside, institutional demand grew exponentially as more companies built LANs (local networks), then the banning of commercial use wasn't feasible anymore (nor was funding the exponential scaling up), so it gave way to
    • The handoff ≈ the contractors who'd been running it became the owners

#2. popular capitalism

This section looks at the economic and cultural conditions for what made the dot-com bubble possible. It fit broad historic patterns (prosperity → confidence → accessible capital to funnel in), but patterns alone don't explain it.

Transformative tech like jet aircraft and television reshaped entire industries without producing comparable manias, so "new tech" isn't sufficient.

• Internet’s appeal was partly ideological: new paradigm (story that helps humans organize their thoughts) for socializing/communication
• Interest rates going down again + 401(k) and IRA plans increasing, and in particular confidence in the stock market returning after dip and comeback in 1988
• Also people just liked to gamble, or felt it was self-expression, …