5 Successful Companies That Survived the Dot-Com Bubble


The dot-com era of the late 1990s was a speculative bubble created by the rapid rise and interest in internet companies. During the five years leading up to the peak in March 2000, many businesses were born with the primary focus of gaining market share through brand building and networking.

The theory was that out of a collection of like companies, one was bound to make it, and businesses and investors alike were more than willing to put their bets on the table.

Getting big fast was key to survival, as companies raced to acquire substantial market share, sacrificing profits along the way. With an unprecedented amount of individual investing, the boom pushed the Nasdaq Composite Index to an all-time high of 5,048.62 on March 10, 2000.

Key Takeaways

  • The dot-com bubble is the result of excessive speculation of Internet-related companies in the late 1990s.
  • On March 10, 2000, the NASDAQ Composite stock market index peaked at 5,048.
  • Following that all-time high, the bubble popped causing many companies in the dot-com sector to crash.
  • By October 2002, stocks had declined in value by 75%.
  • Amazon, eBay, and Priceline were among the companies that managed to survive and adapt through reorganization, new leadership, and redefined business plans.



The Dot-Com Bust

The day that all-time high was reached, the bubble popped, and one company after another imploded, fueling an internet sector freefall that lasted for the next two and a half years.

The index faltered until Oct. 9, 2002, having lost 78% of its value.

Businesses and investors were forced to acknowledge that venture capital largesse and an initial public offering (IPO) did not guarantee income or make up for the lack of a sound business plan. With the spectacular rise and subsequent crash of many of the dot-com companies, few were left standing after the dust had settled.

1. Amazon.com (Nasdaq: AMZN)

Founded by Jeff Bezos in 1994, Amazon is now the largest online retailer in the world.

In 1995, Amazon made its online debut as a bookstore, eventually adding movies, music, electronics, computer software, and most other consumer goods to its diversified offerings.

Amazon's initial public offering took place on May 15, 1997, at a price of $18 per share. It rose to more than $100 and subsequently dropped to less than $10 after the bubble burst.

Like other dotcoms, Amazon's business plan focused more on brand recognition and less on income, and it did not turn a profit until the fourth quarter of 2001.

As of November 2021, Amazon trades at over $3,545 per share. According to its 2020 Annual Report, the company has an annual net income of $21.3 billion and employs more than 1.3 million people worldwide.

2. eBay (Nasdaq: EBAY)

Founded by Pierre Omidyar in 1995, eBay is a popular online auction and retail presence.

eBay showed extraordinary growth early on, as the number of hosted auctions flew from 250,000 during 1996 to two million during just the first month of 1997.

On Sept. 21, 1998, eBay went public at an IPO price of $18; prices had no trouble topping $53 on the first day of trading.

eBay expanded its product categories to include practically anything that can sell. from antiques and gold coins to automobiles and real estate, and also incorporated new auction models and a "buy it now" set-price option.

These moves proved successful for eBay, which now has more than 12,700 employees with reported revenues topping $10.3 billion in 2020.

3. Booking Holdings (Formerly Priceline.com) (Nasdaq: BKNG)

Founded in 1997, Priceline was a travel-related website that helps users find discounts or name their own prices on hotels, car rentals, airfares, and vacation packages.

Priceline shares jumped from $16 to $86.25 during its first day of trading in March 1999, only to fall to less than $10 over the next couple of years.

Following the September 11, 2001, terrorist attacks, the entire travel industry faced challenges. In 2002, Priceline's then-new CEO, Jeffery H. Boyd, rebuilt the Priceline brand around hotels rather than on airfares and expanded its market in Europe.

Priceline (now operating under the name Booking Holdings) currently works with a network of over 100,000 hotels in more than 90 countries and has enjoyed both revenue and net income growth over the last several years. Booking Holdings includes not only Priceline, but also former competitor travel sites Kayak, Booking.com, and Agoda, Open Table, and RentalCars.com. As of November 2021, its shares trade at over $2,400.

4. Shutterfly (Nasdaq: SFLY)

Shutterfly is an internet-based personal publishing service that allows users to create prints, calendars, photo books, cards, stationery, and photo-sharing websites.

Founded in 1999, Shutterfly survived the dot-com bust to go public on Sept. 30, 2006, with an IPO share price of $15.55. Shutterfly returned to private ownership on Sept. 25, 2019, when private equity firm Apollo Global Management acquired the company for $1.74 billion at $51 per share.

On Jan. 8, 2020, Apollo merged Shutterfly and Snapfish into a single entity. A second merge with home decor marketplace Spoonflower was announced on June 2021. The $225 acquisition is expected to be completed in the third quarter of 2021.

As of November 2021, Shutterly is in talks to go public through a merger with the SPAC (special purpose acquisition company) Altimar Acquisition Corp. II.

5. Coupons.com (Privately Held)

Steve Boal founded Coupons.com in 1998 after realizing that the coupon business had yet to adapt to the new internet economy.

Three years later in April 2001, the company issued its first digital coupon. Two months later, it launched its own destination website.

In June 2011 Coupons.com attracted $200 million from institutional investors, money to expand services and increase hiring.

Now owned by Quotient Technology Inc. (QUOT), the website is currently valued at $1 billion. Coupons.com cites declining newspaper readership and increased grocery costs as factors in the growth of online couponing.

The Bottom Line

In the last half of the 1990s, the Internet was a relatively new animal, and the businesses that sprung to life did so with ambition, hope, and, at times, shaky business plans.

While many of the companies experienced huge and rapid growth—its owners becoming instant millionaires—a significant proportion crashed and burned just as quickly. Some companies were able to adapt through reorganization, new leadership, and redefined business plans, making them the true survivors of the dot-com bubble.

Article Sources
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  2. Yahoo Finance. "NASDAQ Composite (^IXIC) Historical Data."

  3. Amazon. "FAQs: When Did Amazon Go Public and at What Price?"

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  9. Yahoo Finance. "Booking Holdings, Inc. (BKNG)."

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  11. Bloomberg. "Apollo-Backed Shutterfly to Buy Spoonflower for $225 Million."

  12. The Wall Street Journal. "Shutterfly in Talks to Go Public Through SPAC Merger."

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