FACEBOOK: The Ultimate Dot-Com

History will record that Mark Zuckerberg wasn’t the first college student to have the idea of enabling people to set up Web pages and share stuff with their friends. Yesterday, my colleague Silvia Killingsworth wrote about the Winklevoss twins, two Harvard grads who famously accused Zuckerberg of stealing the idea for Facebook while working on their fledgling site Connect U. Before the Winklevii, there were the folks behind MySpace and Friendster. And before them, way back in 1995, there were Todd Krizelman and Stephen Paternot, who launched TheGlobe.com from their dorm rooms at Cornell.

TheGlobe.com allowed people to create their personal space online, upload pictures, and set up what came to be known as blogs. By 1998, it had more than two million members, which was then considered impressive. It also had a business plan: sell advertising. On November 13, 1998, Bear Stearns issued 3.1 million shares in the company at nine dollars each to some of its clients—the lucky ones. When Bear’s traders tried to open the stock for trading, they found it difficult to establish a floor price. As I recalled in my 2002 book, “Dot.Con: The Greatest Story Every Sold” (apologies for the plug):

 Whatever price they indicated—$20, $30, $40, $50—was too low. CNBC reported that the first trade might be $70, but even this proved to be a conservative estimate. After a lengthy delay, the first trade crossed the ticker at $87—almost ten times the issue price. Even for an Internet stock, this was unheard of. Within an hour, the price had risen to $97.

TheGlobe.com’s I.P.O. marked the beginning of the dot-com bubble’s epic stage. By the time the bubble burst, in March and April, 2000, hundreds of online firms had issued stock, among them many clunkers like Pets.com, E-Stamp, and etoys.com (not to be confused with a later company that used the same name), but also many online companies that survived and eventually thrived, such as eBay, Amazon.com, and Priceline.com. The bursting of the bubble discredited the term “dot-com,” which was understandable but, in a way, unfortunate, because the term itself had come to be the expression of an attitude that saw in online communication and online commerce boundless possibilities. Facebook’s I.P.O. represents a return to that mindset. It’s the fulfillment of the dreams of the nineties—and a reminder of their potentially fatal attraction.

While the term “dot-com” disappeared, the idea survived. Before very long, it was rebranded as “Web 2.0”—a term popularized by Tim O’Reilly and John Battelle, who from 2004 onwards organized a series of conferences under this banner. Supposedly, what distinguished Web 2.0 from Web 1.0 was user control, and user collaboration, with the network serving as a “platform,” but that wasn’t really a new idea: Krizelman and Paternot had fastened upon it years earlier, as had the founders of GeoCities and other Web-hosting ventures.

Read more at the New Yorker.

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