Dot-com era

The dot-com bubble (also known as the dot-com boom, the tech bubble, the Internet bubble, the dot-com collapse, and the information technology bubble) was a historic economic bubble and period of excessive speculation that occurred from 1995 to 2001. During the bubble, the valuations of companies in the quaternary sector of the economy increased extremely rapidly. The value of the Nasdaq Composite, which includes many technology companies, rose from 1,000 in 1995 to 5,000 in the year 2000.

While the latter part of the dot-com bubble was a boom and bust business cycle, the Internet boom is sometimes meant to refer to the steady commercial growth of the Internet with the advent of the World Wide Web, starting with the release of the Mosaic web browser in 1993, and continuing through the 1990s.

The period was marked by the founding and, in many cases, spectacular failure of several Internet-based companies commonly referred to as dot-coms. Venture capitalists were eager to invest in any company that had one of the Internet-related prefixes or a ".com" suffix in its name. A combination of rapidly increasing stock prices, market confidence that the companies would turn future profits, speculation in stocks by individuals, and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics, such as the Price–earnings ratio, in favor of basing confidence on technological advancements. By the end of the 1990s, the NASDAQ Composite reached a price–earnings ratio of 200, a truly astonishing plateau that dwarfed the peak price–earnings ratio of 80 for the Japanese Nikkei 225 a decade earlier.

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