The Dot-Com Bubble: The Boom and the Bust, 1995 to 2002
Between 1995 and March 2000 the Nasdaq rose about 600%. By October 2002 it had given all of it back.
By the InterStalgia history desk · November 14, 2026
The dot-com bubble had a start date most people agree on. On August 9, 1995, Netscape went public, and its stock more than doubled on the first day even though the company wasn't making a profit. The message to investors was clear: anything with ".com" in the name might be the next Netscape.
Get big fast
For the next five years, money poured into internet startups. The theory went like this: the web would be enormous, the first company to own a category would own it forever, so spend whatever it takes to get there first and worry about profits later. Companies raised money, spent it on advertising, and raised more. Between 1995 and the peak in March 2000, the Nasdaq Composite, the stock index full of tech companies, rose about 600%.
The Super Bowl became the clearest sign of it. Two dot-com companies bought ads during Super Bowl XXXIII in January 1999. A year later, during Super Bowl XXXIV, there were 17.
The sock puppet and the grocery trucks
Two companies became the symbols of the era.
Pets.com launched in November 1998 to sell pet food and supplies online. Pet food is heavy and cheap, so shipping it ate any profit, but the company's sock puppet mascot was a celebrity. The puppet was interviewed by People magazine and appeared on Good Morning America. Pets.com went public in February 2000 at $11 a share and raised $82.5 million. Nine months later, in November 2000, it shut down. The stock was worth 19 cents.
Webvan promised groceries delivered to your door. It started taking orders in the San Francisco Bay Area in June 1999 and raised $375 million in an IPO that November that valued it at more than $4.8 billion. It built expensive automated warehouses and, in 2000, bought a competitor, HomeGrocer, for $1.2 billion in stock. Webvan filed for bankruptcy in July 2001, after three years in business. (Grocery delivery came back years later, once people were actually ready to buy food on their phones.)
March 10, 2000
On Friday, March 10, 2000, the Nasdaq Composite closed at a record 5,048.62. Two months earlier, AOL had announced it was buying Time Warner, a deal that only made sense if a dial-up company's stock was worth more than a century of magazines, movies and cable channels.
Then the selling started. There was no single cause. The Federal Reserve had raised interest rates several times, companies were running out of cash, and investors started asking when, exactly, any of these businesses would make money. Once the prices started falling, they kept falling.
The bottom
By October 2002 the Nasdaq Composite had lost 78% of its value and given back every gain it made during the bubble. Most internet stocks were down 75% or more from their highs, wiping out about $1.755 trillion. Online stores like Pets.com, Webvan and Boo.com closed. Even healthy companies were hit: Cisco lost 80% of its stock value, and Amazon's shares crashed too.
What was left
The crash killed a lot of companies, but it didn't kill the idea. Telecom companies spent more than $500 billion during the boom laying fiber-optic cable and building networks, and that cable stayed in the ground after many of them went broke. The people who learned how to build websites at failed startups went on to build the next round of companies. Amazon, eBay and a young search company called Google, founded in 1998, came out of the crash and went on to dominate their fields.
Even the sock puppet landed on its feet. In 2002 a car loan company bought the rights for $125,000 and put it in new commercials with the slogan "Everyone deserves a second chance."