The Compound
Looking Back at the Dot-com Bubble
10/28/2025, 11:54:40 PM
Economic Summary
- The dot‑com era was characterized by a 'Wild West' of ad models and dealmaking, with companies like DoubleClick and InfoSpace benefiting from aggressive, sometimes legally ambiguous practices that later proved unstable.
- Today’s large tech firms and entrants like OpenAI operate with substantial balance sheets and top talent, making them far more durable and 'national‑scale' compared with many 1990s internet companies.
- Retail has consolidated: Walmart and Amazon have disrupted traditional retail, threatening the survival of many chains (mentions include Target and Kohl's), while Costco is noted as an exception likely to persist.
- Telecom and fiber plays were widely overestimated in the past; many backers and bankers (reference to WorldCom and bankers like those around it) engaged in repeating deals that distorted valuations and outcomes.
Bullish
- Walmart's scale gives it durable competitive advantage.
- Amazon dominates online retail and continues to displace competitors.
- Costco (COST) likely to survive competitive pressure.
- Large modern tech firms have huge balance sheets and top talent.
Bearish
- Kohl's (KSS) may not survive Walmart and Amazon's aggressive retail dominance.
- Many early internet and fiber companies (e.g., InfoSpace) were overhyped and ultimately failed.
- WorldCom's scandals illustrate distorted, sometimes fraudulent dealmaking in the dot-com era.
- Smaller or traditional retailers (e.g., Target) face real survival risks from e-commerce giants.
Bullish tickers
WMTAMZNCOSTOPENAI
Bearish tickers
KSSINSPWCOMSTREET.COMTGT
WMT
Bullish
Walmart's scale and cost advantage let it dominate and displace many competitors.
AMZN
Bullish
Amazon has effectively destroyed traditional retail categories through e‑commerce dominance.
COST
Bullish
Costco is singled out as a retailer likely to survive competitive pressure from Walmart.
TGT
Bearish
Target may question its ability to survive new competitive pressures from Walmart and Amazon.
KSS
Bearish
Kohl's is called into question as potentially unable to survive against retail behemoths.
INSP
Bearish
InfoSpace cited as an example of a dot‑com era company that struggled despite early hype.
DOUBLECLICK
Bullish
DoubleClick is referenced as an archetype of early internet advertising business models.
WCOM
Bearish
WorldCom referenced for the distorted and fraudulent dealmaking practices of the era.
OPENAI
Bullish
OpenAI (mentioned as a paradigm shift) contributes to today's reality where tech businesses are substantial and durable.
STREET.COM
Bearish
Street.com (or similar early web portals) struggled in the dot‑com era.
PAINEWEBBER
Bearish
PaineWebber referenced as an example of brokerage/bankers involved in repeating deal cycles.
People mentioned
Jack GrubmanJack Rubin