The dot-com bubble was a period of rapid growth and speculation in internet-based companies during the late 1990s, followed by a dramatic market crash in the early 2000s. It was driven by excitement about the potential of the internet and new digital technologies. Investors believed that online businesses would quickly transform the global economy, so they invested heavily in companies with “.com” in their names, even if those companies had little revenue or no clear path to profit.

During this period, many internet startups received large amounts of venture capital and went public through initial public offerings (IPOs). Stock prices of technology companies rose quickly as investors rushed to buy shares, expecting future profits. This created a speculative bubble, where company valuations were based more on hype and expectations rather than actual financial performance.

However, by 2000, it became clear that many of these companies were not profitable and could not sustain their business models. Investor confidence began to decline, and stock prices started falling sharply. The technology-heavy NASDAQ index dropped dramatically between 2000 and 2002, wiping out trillions of dollars in market value.

As the bubble burst, many internet companies went bankrupt, and investors suffered significant losses. Despite the crash, the dot-com era also laid the foundation for the modern internet economy. Successful companies that survived, such as major online platforms and technology firms, later became some of the most influential businesses in the world.