In 2000, the internet was the future, until every internet company went bankrupt
Every two Wednesdays at Fashions! Quirks! Panic!Luke T. Harrington examines one of the random obsessions that have gripped the public mind in the recent past and tries, in vain, to make sense of it all.
vViewers of 2000’s Super Bowl XXXIV (a matchup between the St. Louis Rams and the Tennessee Titans) witnessed an oddity that people still talk about today: a sudden surge in publicity for this new thing called « dot business. » com ». E*Commerce he had trained a chimpanzee to dance. Electronic data systems he had convinced some cowboys to breed cats. And, of course, there was Pets.com, with their strange dog sock puppet, who wore a wrist watch as a collar and sang Chicago songs (but, ironically). In all, there were seventeen different commercials for internet-based businesses, compared to only two the year before. It was clear that the internet was here and it was going to be huge.
Well, until the following year, when the Super Bowl dot-com commercials were up to just three. And then the next year, when nearly all of those seventeen companies had gone belly up. So nevermind, the internet thing was just a fad.
No one really had the answers to these questions, but it was clear there was a lot of venture capital to be raised by pretending that they did.
Sure, you’re reading this all over the internet, in 2021, so everything about this probably seems hopelessly bizarre to you. In the roaring 2020s, everything is on the internet, from your TV to your music to literally every social hit you’re getting. You always carry the entire Internet with you in your pocket. Clearly there is something this “making money on the internet” thing, as long as your name is Bezos or Zuckerberg. But it’s been twenty years and along the way, well, there’s been a lot of carnage.
TTo understand what was happening with the Internet at the turn of the century, it might help to remember that learning about a new technology and knowing how to use it are two different things. There was a time when people thought the radio would replace the telegraph or the telephone, before it ended up being the worst way to listen to the latest awful pop songs. There was a time when conventional wisdom imagined movies as a box you’d stick a quarter and your face in in a carnival arcade. The best (or most profitable) use of a new technology isn’t always obvious from the outset.
So it was with the Internet. Both the easily excitable and thoughtful people could recognize that the Internet was a communication tool unlike anything that had ever existed – now anyone could send any kind of data around the world in an instant – but the best way to profit from it was » It’s not necessarily obvious: should an online store feel more like browsing through a catalog or more like looking at the Home Shopping Network? Should it prioritize speed or the « wow » factor? What were the benefits of ordering online versus just driving to the real shop?
No one really had the answers to these questions, but it was clear there was a lot of venture capital to be raised by pretending that they did. King Solomon may have once written“Don’t brag about tomorrow, because you don’t know what a day may bring,” but Internet entrepreneurs knew otherwise: The Internet was the future, so you had to enter on the ground floor Now! Only one company could own the name « pets.com » (or « furniture.com » or « travel.com » or whatever), so the land rush was ON!
The problem with joining a land rush, however, is that sometimes you get stuck with a worthless piece of property.
Ttube that spent the turn of the century screaming « the Internet is the future! » might sound mildly prescient Now, but the skeptics of the time weren’t exactly wrong about the shortcomings of the Internet, at least for the time being. First, the internet in 2000 was appallingly slow: it came over phone lines and took several minutes to « login ». And that’s not to mention how clunky and slow computers were at the time: RAM still came in megabytes, processors were still single-core, DVD-ROMs were state-of-the-art storage. These problems have only been compounded by some websites’ insistence on impressing visitors with lots of flashy (and often Flashy) animation and sound, which, even when they worked (machine compatibility was even more of a crapshoot then than it is now) – it still slowed the already glacial online shopping experience to a near standstill.
Not for nothing Pets.com, their puppet-sock, are one of the most cited examples of the madness that characterized the dot-com bubble. The thought — mark down that chosen dot-com address and find out the details later — is a strategy of sorts, but it only works until you run out of money. People beloved that little puppet, but for the most part nobody knew or cared what he was selling. In 2000, only 52% of Americans had access to the Internet, and of those, it wasn’t clear how many both (1) had pets and (2) were trying to avoid making trips to the pet store. The site’s official tagline (« Because pets can’t drive! ») and their Super Bowl ad, which portrayed pets as hopelessly depressed whenever their owners left them home to shop for groceries, were fun, but they failed to make a serious case for the existence of Pets.com.
None of this, mind you, stopped Pets.com from doing that raising $82.5 million in just one day when they launched their IPO a week and a half after the Super Bowl. This, combined with a sizable investment from Amazon (which bought thirty percent of the company) provided Pets.com with a massive influx of cash; What no providing them was a viable business model. The cost and logistics of shipping large, heavy bags of pet food have made it nearly impossible to turn a profit, especially given that profits on pet food are typically razor thin. Most pet stores stand by with hefty markups on toys and accessories, but Pets.com was it selling almost everything at a loss—AND offering free shipping, in an (increasingly desperate) attempt to attract as many customers as possible as quickly as possible. It was an all too common strategy at the time, but given, as we have seen, the limited number of potential customers, it was a losing battle.
IIn November of 2000, less than a year after their sensational Super Bowl announcement, Pets.com announced that they were no longer taking orders. The company was liquidated and, ironically (appropriately?), its URL and some of its other brands were sold to PetSmart. Most of the other Super Bowl advertisers suffered a similar fate: only of the original seventeen monster. com, AutoTrader.com, AND WebMD.com they are still active and I’m not sure I would want any on my resume.
In many ways, making fun of failed internet companies is like shooting fish in a barrel: both fun AND delicious, but it is important to remember that in 2000, Nobody I really had no idea what the internet was going to end up being. Wi-Fi was in its infancy, the smartphone was still seven years away, and the general horror of humanity seemed safely quarantined in 4chan. The paths that technology and culture take always seem inevitable in retrospect; right now, all any of us can do is sow our proverbial seeds and pray for rain.
