History as it is
The reason for this was that most of the Dot-com companies could issue millions of dollars from the market and venture capitalists without having any serious potential for profits. Entrepreneurs at that time had a change in behavior, most of them just created companies to sell them, they had no intentions for optimizing it for revenue, all they did was start a company run it for sometime, with or without any profit, and then sell it by burdening it on investors. Due to the high confidence and plenty of cash there was plenty of free spending among internet companies, that is companies spent millions of dollars on giving bonuses to employees, expensive vacations and silly promotional ideas such as giving thousands of dollars to the one millionth visitor. All this caused a steady drain in the investors wealth, and on 10th March 2000 all this needed to be taught a lesson and there was sharp decline in the market and within the end of the year up to 5 trillion dollars were lost. Most of the dot com companies died out, but some companies like Google and Amazon, even though they didn't make any profit before survived it.
What the F***?
Now that would have given a good insight about the previous dot com bubble and why it happened, but why is the title called 'The return of the dot-com bubble', it was just a year ago when the worst financial crisis in modern times affected us, and now how and why will this happen. You see many industry experts think that the web is again moving towards the crisis like last time, till now their haven't been any restrictions from governments of any country. The World Financial crisis deflated this bubble, but now its growing faster than ever. Many entrepreneurs these days take huge salaries, bonuses, start free spending and most of all they cannot be called entrepreneurs because they tend to sell their businesses rather than running it. They are trying use the soaring investors who are looking to invest on the web by burdening the company's free spending expenses. Even many investment banks are misleading investors.
The situation is going to come back to normal someday but it would take 2 to 3 years and i think by then all governments would put restrictions on the web to avoid another bubble, those restrictions will be valuable to the investors and to the web but not favorable to work at home internet marketers. The many consequences thats going to happen are as follows,
These are like the most common words we here during a crisis, according to law a company is declared bankrupt when its unable to pay its creditors, the government usually helps a bankrupt company or its assets can be seized by its creditors. The dot com crisis is definitely going to cut through the operating margins of many companies, leading it towards bankruptcy.
Layoffs and cutbacks
These are also something we here in common during a crisis, when a company is trying to save money to increase operating margins, this is also used to increase its share price and investor confidence.
Fall in advertising revenue
Most of the web companies have their revenues from advertising, which are the first to be hit. Some companies which get their revenues from non web companies do have chances of survival, unless even the mainstreet businesses are affected. Even the ones who use paid usage will not be affected much.
News is no longer free
This can be a dream for news corporations, maybe someone will bring standardization among them and optimize news corporations for full revenue. You see most recessions are not so bad. Internet users will be affected, but there has to be something to keep the internet running.
This is a necessary method on the internet, all niche blogs should register and follow the rules of their particular niche and other sites too will have a set of rules which everyone has to follow. Standardization will hurt someone for sure but everyone is going to profit in the long run.
Unavailability of funds
After this one, finding funds for your startup will be very difficult. Investors will fall once and twice but not the third time. Funds will available someday, but it will considered a risky game to invest on internet stocks, so i feel there will be a total change in the internet lifestyle.
Dollar out, Euro in
After the crisis, the dollar is going to loose out its value and policy makers will be forced to make the Euro the internet's standard currency, this is really good for Asian countries as it increases our revenue, but purchasing on the internet is going to be expensive. This will be very profitable to the web industry in India, China and some south-Asian countries.
Drain of wealth
Even after the recession is over we are going to face a drain of wealth from countries like USA and Britain to countries like India and China. This is because after the bubble, the European and American markets will be in a transition, so most investors will tend to invest overseas in countries like India and China. Even many firms will move towards India cut costs.