World Wide Web Rise And Fall Commerce Essay

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The World Wide Web also known as the Web is a worldwide information space which people can read and write through computers linked to the Internet. Web is in fact a service that works over the Internet, just like e-mail. The origination of the Internet dates back quite earlier. The sources of the World Wide Web can be retraced back to 1980 (Belch, 2003). Since then it has developed further than what its architects supposed would be a file-sharing tool for educational and U.S. government contract investigators. Today, World Wide Web is a crucial element of the world and has literally altered history (Francis, 2008). One can feel surprising how long the Web has been around, and where it commenced as discussed here. The World Wide Web saw significant rise and fall in its early days due to several reasons that is explored here in this paper.

In 1993, Tim Berners-Lee created the Web and the bubble began (The Berners Lee and the Web, n.d.). The bubble depicts the amazing stock run of Internet companies, when their values soared to astonishing and what were thought to be unattainable heights from 1993 to 2001 (Lowenstein, 2004). Along with the significant rise, the overpriced giants crashed in this time period. Individual investors lost millions and the NASDAQ (the stock exchange for most Internet companies) tumbled down (Herman, 2000). Why it happened and due to what reasons are explored here so that an overall origination history of Web and its rise and fall from the time it has been around could be identified. The most significant aspect researched here is bubble and described the fundaments of this extraordinary time in the history of WWW. In addition to researching the bubble, the paper also discusses what could have been done at that time to stop this unsafe surge in valuation. As well, here it is also described that which companies made the most and lost the most in that time.

Rise and Fall in the Early Days of the World Wide Web

World Wide Web:

World Wide Web (WWW) refers to a system of resources that facilitate individuals using computer to view and interact with different type of information, together with magazine archives, communal- and university-library resources, modern world and business news, and various software programs. The fundamental concept of WWW is to combine the methods of computer networking and hypertext into a dominant and easy to utilize worldwide information system (Francis, 2008). Hypertext pertains to a text with connections to further information, on the replica of references in a technical paper or cross-references in a glossary. With the help of electronic documents, these cross-references can be accompanied through a mouse-click (Herman, 2000). Navigation by moving from one page to another is known as browsing. WWW is seamless in terms that a user can view the entire Web of information as one huge hypertext document (Gaither, 2007).

Origination & Development of World Wide Web:

The concept of WWW has its historical roots in things like creation of the telegraph, the introduction of the Sputnik and more, but in reality it commenced in March 1989, when Tim Berners-Lee, a computer scientist at CERN in Geneva, Switzerland wrote a paper known as Information Management: A Proposal. In this, he wrote "just another program" that occurred to transform the world as we recognize it (Francis, 2008). At that time, Tim had no idea that the concept he came up with, will be implemented at such a large scale. The proposal written by Tim recommended a way to manage information that makes use of a "hypertext" procedure to connect various related documents mutually over a network.

Then, the further developments started in this field and by 1991, browser and web server software was available. As well, by 1991 a few initial sites were in place, and by the end of 1991, there were around 26 sites. The first browser, which becomes quite commonly available, was Mosaic, in 1993 (Gaither, 2007). On April 30, 1993 CERN’s directors decided that WWW technology would be free and could be used by anyone without any fees. This is a true milestone in the history of WWW and its development. With this decision, browser started changing everything and by the end of 1994, there were million of browser copies in use with massive growth (Napier, Rivers & Wagner, 2006).

Beginning of Bubble and Crash of Overpriced Giants:

From 1994-to-2004, the Internet saw the rapid growth that was not seen in regard to any preceding technology. With this bubble began that is also known as a stock market bubble that creates lots of issues when it finally burst in the year 2001 (Kolb, 2010). This stock market burst in 2001 was also known as dot-com bubble that was because of the volatile growth and fame of internet web sites and a variety of companies from the tech industry (Kraay & Ventura, 2005).

The commencement of the dot-com industry traced back to the early 1990s as a compilation of start-up companies firms that were using internet as there key mean to do business. All these companies typically used the .com suffix in their names. The disastrous fall down of the dot-coms in May 2000, shook the U.S. economy (Francis, 2008). With this, approximately 210 dotcom companies broke down in 2000 and around 762 were closed for some period. With the fall down of companies (Boo.com, Startups.com, Freeinternet.com, pets.com, WorldCom etc), several dot-coms also started laying off their staff and unemployment rate also augmented from 3.9% to 6% in 2002 (Kolb, 2010).

The bubble burst in 2001, was all because of the false principle that new technology such as WWW would totally eradicate the requirement of brick-and-mortar stores. The new web-based business model would replace the old one, which is based producing physical goods into new economy, based on extensive use of information and communication technologies (Gaither, 2007). An analysis of dot-com success as well as failure is vital in present to identify the mistakes made by the dot-coms and indulge in the evolution of e-commerce as an effective and assured means of successfully undertaking a business (Wollscheid, 2010).

The fundament of the bubble burst in 2001; lie with the commercialization of the Internet in the 1990s. With this commercialization, there was a revolution in the way companies undertake their business. With the growth of WWW, several companies (Yahoo, E-bay, Amazon etc) were served with unique opportunities that in turn helped them in improving their efficiency, develop better customer relationships, and expand into different markets with global visibility (Francis, 2008). These advantages in turn directed several companies to move all their key operations to the Web. In accordance to CNN and BBC reports almost 20 million web-based companies came into existence in between 1993-2000.

With the prospering of several companies, the economy started facing a new challenge of managing business transactions over the Internet, or e-commerce. With the process of traditional companies establishing themselves as online retailers, mass media tried to hyperbolize the eagerness with different titles like Get Web or Be Dead, Dot-Com or Be Gone etc (Lowenstein, 2004). Simultaneously, the number of Internet users also heightened exponentially, and online shopping evolved as significant consumer activity. With all these trends ongoing in the industry, the investors also started demonstrating eagerness for Web-based companies (Kraay & Ventura, 2005).

In the year 1999, venture investments regarding the Internet businesses burst, heightening to just about $20 billion from $3.4 billion in 1998. This was all due to the notion of several investors that technological innovation is going to be the assuring future value of a company. In this type of environment investors started investing heavily without going through the firm’s financial viability or analysis of management plans (Parsons & Oja, 2008). With boom in investments in internet companies, enormous increase was seen in stock prices, particularly Internet related stocks prices. In January 1997, the dot-com industry accelerated NASDAQ and consequently exceeded prospects with record high.

Just in one year period (1997-1998), America online stock increased by 593%, Yahoo’s by 584%, and Amazon.com with 970% increase. In early 2000 the stock market found a bubble almost ready to burst. This burst in 2001 directed to the quick decline in Internet-related stocks value. The stock prices of all dominant Internet stocks decreased. The most important factor due to which bubble burst was the hyperactive purchasing of Internet-related without any significant company consideration (Kraay & Ventura, 2005). The second main was that investment firms indulged in introducing IPOs depreciated the initial stock offering, depriving the start-ups of imperative capital resources. Most of the dot-com companies were not having any sound business strategy that also led to failure and fall down.

Summary and Conclusion

With the discussion of rise and fall in early days of WWW, it becomes evident that the key reason of bubble burst was investors’ over-enthusiasm and confidence in internet-related businesses. If, companies entering tech industry with boom in WWW would have operated with the help of sound business strategy and management plans, they would have become able to stop unsafe surge in valuation. Lack of focus on profit was also a key reason that could have been managed with slow and steady growth through attaining rational profits (Kolb, 2010). With this assignment, it becomes clear that sudden change in economy is not permanent as it could also be an illusion. So, it is vital to move with thorough planning and analysis of the trends and the industry potential in future. Investors also need to do proper analysis of a firm before investing in its stocks. Doing business at slow and steady speed is critical to attain growth and maintain its position in the long-run.

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