Adot-com company, or simply adot-com (alternatively rendereddot.com,dot com,dotcom or.com), is a company that conducts most of its businesses on theInternet, usually through awebsite on theWorld Wide Web that uses the populartop-level domain ".com".[1] As of 2021, .com is by far the most used TLD, with almost half of all registrations.[2]
The suffix .com in a URL usually (but not always) refers to a commercial orfor-profit entity, as opposed to a non-commercial entity ornon-profit organization, which usually use .org. The name for the domain came from the wordcommercial, as that is the main intended use.[3] Since the .com companies are web-based, often their products or services are delivered via web-based mechanisms, even when physical products are involved. On the other hand, some .com companies do not offer any physical products.[4]
The .comtop-level domain (TLD) was one of the first seven created when the Internet was first implemented in 1985; the others were.mil,.gov,.edu,.net,.int, and.org.[5] TheUnited States Department of Defense originally controlled the domain, but control was later transferred to theNational Science Foundation as it was mainly used for non-defense-related purposes.[6]
With the creation of theWorld Wide Web in 1991, many companies began creating websites to sell their products. In 1994, the first secure onlinecredit card transaction was made using theNetMarket platform.[7] By 1995, over 40 million people were using the Internet.[8] That same year, companies includingAmazon.com andeBay were launched, paving the way for future e-commerce companies.[9] At the time of Amazon's IPO in 1997, they were recording a 900% increase in revenue over the previous year.[10] By 1998, with a valuation of over $14 billion, they were still not making a profit.[11] The same phenomenon occurred with many other internet companies—venture capitalists were eager to invest, even when the companies in question were not profitable. In late 1999, theNasdaq index reached aprice-to-earnings ratio of over 200, more than double that of theJapanese asset price bubble at the beginning of the 1990s.[12]
A common indicator used to show the dramatic rise in the number of dot-com companies is the number of advertisements purchased at theSuper Bowl. In 1999, only two internet companies bought advertisements, but that number reached 17the following year.[13] However, this number sharply decreased in 2001, with only 3 dot-com companies purchasing an advertising slot.[14]
While the term can refer to present-day companies, it is also used about companies with this business model that came into being during the late 1990s with the rapid growth of the World Wide Web.[15] Many suchstartups were formed to take advantage of the surplus ofventure capital funding and were launched with thinbusiness plans, sometimes with just an idea and a catchy name. The stated goal was often to "get big fast", i.e. to capture a majorityshare of whatever market was being entered. Theexit strategy usually included anIPO and a large payoff for the founders. Others were existing companies that re-styled themselves as Internet companies, many of them legally changing their names to incorporate a.com suffix.
Thestock market crash around 2000 that ended thedot-com bubble resulted in many failed and failing dot-com companies, which were referred to punningly asdot-bombs,[16]dot-cons[17] ordot-gones.[18] Many of the surviving firms dropped the.com suffix from their names.[19]
The burst of the dot-com bubble triggered a wave of market panic, leading to widespread sell-offs of stocks from dot-com companies. This selling frenzy further depressed the values of these stocks, and by 2002, estimated investor losses had reached an astounding $5 trillion.[citation needed]