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A business, especially a publicly-traded company, that conducts most or all of its business over the Internet. Dot-coms may conduct business in one or more of the following areas: Content, Commerce, and Connection. Content companies provide information, either for free or for a charge, and earn most of their operating income from advertising. Commerce companies sell new and/or used goods directly over the Internet. Connection companies provide Internet services directly to customers.

Dot-coms were hugely popular investments in the 1990s, with IPOs of hundreds of dollars per share, even if a company had never produced a profit and, in some cases, had never earned any revenue. This came from the theory that Internet companies needed to expand their customer bases as much as possible and thus corner the largest possible market share, even if this meant massive losses. While this worked for some dot-coms, notably Google, which did not produce a profit for its first several years of operation, the theory was unsustainable because, in a given industry, only one or two companies could corner large market shares, meaning most dot-coms were doomed to failure. This dot-com bubble burst in 2000.
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1. Of or relating to a company or the stock of a company engaged primarily in a business associated with the Internet. is the most obvious example of a dot-com company.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
A CPA, trained to analyze and assess risk, must draw on those skills when evaluating a dot-com company's growth potential.
The newly formed dot-com company was founded last month by several veteran television execs: CEO Eric Rennagel, who came from L.A.-based Ultracom; executive vp Ray Donahue, once president/CEO of Momentum Distribution; along with former CBS International president Rainer Siek (now senior executive on Tivix's Board of Advisers); and technology whiz David Wheeler as COO.
"The frustrating thing is that the market has no problem if a dot-com company is not making any money," Neuman says.
It takes more than an intriguing concept to get venture capitalists to invest in a new insurance dot-com company. Investors want to see experienced insurance professionals behind the folks with the technological expertise, Green said.