Dot.con: How America Lost Its Mind and Money in the Internet Era

Dot.con: How America Lost Its Mind and Money in the Internet Era

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by John Cassidy
     
 

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The Internet stock bubble wasn't just about goggle-eyed day traderstrying to get rich on the Nasdaq and goateed twenty-five-year-olds playing wannabe Bill Gates. It was also about an America that believed it had discovered the secret of eternal prosperity: it said something about all of us, and what we thought about ourselves, as the twenty-first century dawned

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Overview

The Internet stock bubble wasn't just about goggle-eyed day traderstrying to get rich on the Nasdaq and goateed twenty-five-year-olds playing wannabe Bill Gates. It was also about an America that believed it had discovered the secret of eternal prosperity: it said something about all of us, and what we thought about ourselves, as the twenty-first century dawned. John Cassidy's Dot.con brings this tumultuous episode to life. Moving from the Cold War Pentagon to Silicon Valley to Wall Street and into the homes of millions of Americans, Cassidy tells the story of the great boom and bust in an authoritative and entertaining narrative. Featuring all the iconic figures of the Internet era — Marc Andreessen, Jeff Bezos, Steve Case, Alan Greenspan, and many others — and with a new Afterword on the aftermath of the bust, Dot.con is a panoramic and stirring account of human greed and gullibility.

Editorial Reviews

The Guardian(London)
"Admirably lucid and comprehensive."
Rupert Murdoch
John Cassidy is one of the world’s best financial journalists. Dot.con [is] compelling.
Wall Street Journal
“A marvelous book. . . . Dot.con will be read by generations of .... B-school graduates.”
Salon.com
“The first good book about one of capitalism’s most embarrassing debacles.”
New Republic
“John Cassidy’s [Dot.con] deserves to be the boom’s standard account. It is informative, perceptive, and gracefully written.”
The Guardian (London)
“Admirably lucid and comprehensive.”
The Economist
“Shrewd and entertaining...thoroughly persuasive.”
Publishers Weekly
This book's epigraph, "Ever get the feeling you've been cheated?" (by Johnny Rotten), perfectly sets the tone for what follows. Cassidy certainly knows he was cheated by the collapse of Internet stocks, and here he sets out to discover who's to blame. His search includes a history of the stock market (starting in ancient Rome) and finds that most buying manias and speculative bubbles were encouraged by unscrupulous financial professionals. He traces the Internet to Vannevar Bush's work during World War II. Its developers "tended to be young men with long greasy hair, thick glasses, and an obsessive interest in science fiction," who were held in contempt by the rest of the world. But Cassidy, an economics writer at the New Yorker, goes beyond these usual suspects of stock brokers and computer geeks. He devotes two chapters to criticizing Alan Greenspan for making "frequent references to the benefits of new technology," among other things. The author indicts many additional public figures, journalists, analysts, authors and businesspeople by name and finds them guilty. Despite the sensational charges, there is little new here. It's hard to believe that anyone will be shocked to learn that most Internet companies and day traders lost money or that venture capitalists, investment bankers and stock analysts made large fees promoting stocks without subjecting the companies in question to critical scrutiny. Cassidy does not even deliver an entertaining rant. Most of the pages are uninspired chronicles of well-known events. Copyright 2001 Cahners Business Information.
Library Journal
Cassidy, a business journalist for the New Yorker, has written a fascinating account of the "development of the Internet bubble, and the broader stock market boom of the late 1990s." The author begins with the development of the first digital computer, the emergence of the personal computer, and the building of a computer network called ARPANET, which evolved into the global network we now know as the Internet. He goes on to describe the invention of the World Wide Web by a CERN scientist and the players involved in the beginning of the electronic commerce boom. The companies profiled include Netscape, Yahoo!, Priceline, AOL, Amazon, and a number of other dot-coms. Cassidy tells the story of the Wall Street analysts who touted dot-com stocks even though the companies were losing millions of dollars and criticizes Alan Greenspan for taking a hands-off approach to reining in the stock market until it was too late. The chapters discuss the zeal of venture capitalists to fund these e-commerce companies as well as the willingness of the single investor to buy their stocks while ignoring the signs of disaster ahead. This absorbing tale of an ongoing chapter in the history of the stock market is highly recommended for all libraries. Stacey Marien, American Univ., Washington, DC Copyright 2002 Cahners Business Information.

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Product Details

ISBN-13:
9780060008819
Publisher:
HarperCollins Publishers
Publication date:
05/13/2003
Edition description:
Reprint
Pages:
416
Sales rank:
1,461,715
Product dimensions:
5.31(w) x 8.00(h) x 0.94(d)

Meet the Author

John Cassidy, one of the country's leading business journalists, has been a staff writer at the New Yorker for six years, covering economics and finance. Previously he was business editor of the Sunday Times (London) and deputy editor of the New York Post. He lives in New York.

Read an Excerpt

Chapter One

From Memex to World Wide Web

The Internet story begins with a familiar figure in American history: the Yankee inventor. Vannevar Bush (no relation to the political family of the same name) was born into a middle-class family in Chelsea, Massachusetts, in March 1890. Adept with numbers and fascinated by gadgets, he studied engineering at Tufts University, where, in 1913, he invented a device to measure distances over uneven ground. Made from a bicycle wheel, a rotating drum, some gears and a pen, this contraption, which was called a Prolific Tracer, earned Bush a master's degree and his first patent. Two years later, Harvard and Massachusetts Institute of Technology jointly awarded him a Ph.D. for his research into how electrical currents behave in power lines. Bush then moved into the private sector. He returned to academic life in 1919, joining the electrical engineering faculty at MIT, where he was to remain until the Second World War.

During the interwar years, a series of revolutionary inventions transformed daily life. For the first time, ordinary Americans gained access to electricity, motor cars, refrigerators, and radios, Economists spoke of a "New Era" of technology-based prosperity. The stock market crash of October 1929 and the subsequent Great Depression put paid to such language, but scientific progress continued unabated, especially in Bush's field of electrical engineering, where useful applications seemed to emerge from the laboratory every week. MIT has always had close links to industry, and Bush lent his expertise to numerous manufacturing ventures, including firms that later became part of Texas Instruments and the Raytheon Corporation.

In 1931, Bush and his students invented an unwieldy contraption consisting of levers, gears, shafts, wheels, and discs, all mounted on a large metal frame, which they called a "differential analyzer." The first digital computer, the ENIAC, wasn't invented for another decade and a half, but Bush's invention was a mechanical computer designed to mechanize the solution to differential equations, a mathematical problem that had tormented students for decades. It cemented his reputation as an ingenious engineer. During the Second World War, the U.S. Navy used an updated version of the differential analyzer, one weighing a hundred tons, to help it calculate missile flight trajectories.

In 1938, Bush was appointed president of the Carnegie Institution, a prestigious research institute based in Washington. After moving to the capital, he became friendly with Harry Hopkins, a senior aide to President Roosevelt. Hopkins and Roosevelt were keen to mobilize the nation's scientists and engineers behind the war effort, and they picked Bush as the man for the job. In 1941, Roosevelt named Bush as director of the newly formed Office of Scientific Research and Development, which operated independently of the Pentagon and the civilian agencies. Bush quickly justified his selection. Riding roughshod over bureaucrats, military and civilian alike, he granted military research contracts to Harvard, MIT, Cal Tech, and other leading universities. At the war's peak, he had more than six thousand scientists working for him. The research carried out by these scientists facilitated the development of the proximity fuse, radar, and the hydrogen bomb.

In 1944, Roosevelt asked Bush to explore how scientists and the government could work together when the war was over. The following year, Bush published Science, the Endless Frontier, in which he proposed federal financing of basic scientific research, especially in the fields of health and national security. This report led directly to the creation of the National Science Foundation, which became the main government agency for supporting scientific research. Bush also dusted off an essay about the future that he had written before the war, when he had been doing some research into information retrieval systems. He did a bit of rewriting and published the essay in the July 1945 edition of Atlantic Monthly under the title "As We May Think."

According to Bush, the biggest problem facing scientists after the war would be information overload. "The investigator is staggered by the findings of thousands and thousands of other workers -- conclusions which he cannot find time to grasp, much less to remember, as they appear. Yet specialization becomes increasingly necessary for progress, and the effort to bridge between disciplines is correspondingly superficial." Fortunately, Bush went on, the very phenomenon that had caused the problem -- the explosion of scientific research -- also provided two potential solutions to it: microphotography and the cathode ray tube. The former could reduce the Encyclopaedia Britannica to the volume of a matchbox. The latter could be used to display text and pictures on glass screens. Put them together, Bush wrote, and you could construct a device "in which an individual stores all his books, records, and communications, and which is mechanized, so that it may be consulted with exceeding speed and flexibility."

Bush called his proposed machine a "memex." He said it would feature "translucent screens, on which material can be projected for convenient reading. There is a keyboard, and sets of buttons and levers. Otherwise it looks like an ordinary desk." All entries in the memex would be indexed by title and by subject, just as in a regular library, but users could also move between items of interest more directly, via what Bush called "trails." Each time a researcher created a new file, he would be able, by tapping in a code, to link it to a second file of his choosing, which, in turn, could be linked to a third, and so on. Thereafter, anybody looking at the first file could call up the other files by pressing a couple of buttons. The great attraction of this filing system, Bush argued, was that it would mimic the human mind and work by "association." Vast amounts of related information would be grouped together in an easily accessible format.

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