The greatest defunct Web sites and dotcom disasters

'Live fast, die young' could've been the Web's motto when the dotcom bubble burst around 2000. We take a look back at the period's monumental collapses and now-defunct successes

Nate Lanxon Special to CNET News
11 min read

At the turn of the Millenium the Internet burst out of academia and hobbyism in a volcano of money, sex and possibility. It barged its way into our lives, our economy and our global culture. For many people the dotcom boom meant oodles of boodle, and the promise of even more. But most of these Web pioneers were shown how dangerous it can be to run before you can walk -- for as night follows day, bust followed boom.

Collected here are history's most important failed dotcom businesses, and Web sites that were massive in their day, but now lie dormant in the graveyard of binary has-beens. We'll see people broadcasting themselves over a decade before YouTube existed, new global currencies that tried to leverage the booming global-local economy, and the best ways to let overexcited entrepreneurs burn through tens of millions of pounds and dollars in mere months.

Welcome to the dotcom bubble: the black hole of Web history.

JenniCam (1996-2004; precursor to Justin.tv)

JenniCam, beginning in 1996, was the first really successful 'lifecasting' attempt. We're more familiar these days with lifecasters Justin Kan and oh-God-look-at-how-hot-I-think-I-am Justine Ezarik. But these modern exhibitionists are doing a decade later what Jennifer Ringley started back when we were all using dial-up connections.

Jenni started out broadcasting her often mundane life from a single webcam, but eventually quadrupled her cam count and didn't shy away from broadcasting anything, including any bow-chicka-wow-wow with blokes, or even when bored on her own. She was 19 when she began doing this (lifecasting, not bow-chicka-wow-wow), and continued the hobby for seven years (lifecasting, not... you get the idea).

No subscription, no sex for you
Money rolled in from $15-a-year subscriptions and Jenni ended up featured on massive US talk shows and on the cover of popular magazines. It's reported that her site was receiving over 100 million visitors a week -- remember this is 1996 and the Web as we know it now had barely lost its virginity, let alone given birth to the God-child we know as the modern Internet.

In 2008, when reality TV shows such as Big Brother deliberately exploit chumps for the entertainment of idiots, Ringley's unapologetic self-opened window gave the world its first taste of what was to eventually dominate our tubes: user-generated video, interactive Web sites, paid-for Net subscriptions, video on-demand and self-exploitation.

But it seems almost eight years of such revelation was enough for the 20-something Jenni, who apparently now leads a quieter life as a computer programmer.

Boo.com (1998-2000; precursor to: Next.co.uk, et al)

If you were cool and wanted clothes, you were part of Boo.com's target audience. Boo.com was one of the first to demonstrate the calamity that was to be the typical scenario for dotcom businesses at the turn of the Millenium -- overhype, overfund and overexpand. It was an online consumer fashion Web store, founded by Ernst Malmsten and ex-model Kajsa Leander in 1998, and launched the following year -- after eating £80m before selling a single item of clothing.

To guide you around the bandwidth-heavy site was Ms Boo, an animated little shop assistant. The problem was that in 1999, the limited numbers of people on the Net were using the also-limited bandwidth of dial-up modems, and browsing the site was a slow affair.

Overstaffed, overpaid, over here
Perhaps that's why eight weeks before its demise in mid-2000, Boo.com had only managed to generate £200,000 in turnover from 300,000 customers. For a company that employed 400 people when it only estimated it needed 30, such a disappointing revenue was hardly enough to keep it afloat. Worse still, the company needed countless millions in additional funding, and as the tech stocks were plummeting like a pigeon shot mid-flight, the doors of banks were slammed, locked and welded shut.

In retrospect, Boo.com simply tried to do too much, too soon. With over half of Britain's Internet users now on broadband and trust for online shopping much greater than it was in 2000, Malmsten and Leander's venture could've seen great success.

Heat.net (1997-2000; precursor to Xbox Live, PSN)

Back in the day, Heat.net was an online gaming community created by Sega, similar to today's Xbox Live. Gamers would sign up for about $10 a month to play games such as Kingpin, Baldur's Gate, Unreal, Quake and Sin over the Net.

The site developed a decent community of bleeding-edge gamers who could earn 'Degrees' -- Heat's own currency earned by frequent players in reward for, well, playing frequently. But as of 31 October 2000, Sega closed Heat.net and redirected users to SegaNet -- a pseudo-ISP for gamers created in 1999, access to which was provided by local telephone numbers.

Ahead of its time
Sega eventually decided to move away from PC gaming to focus on making the new Dreamcast console an online gaming system. This resulted in the amazing Phantasy Star Online and a Dreamcast broadband adaptor, right after Heat.net shut its virtual doors.

But even SegaNet passed away a couple of years later, a casualty of the Dreamcast's failure, leaving the gaming world wondering what could possibly replace the Heat.net experience that was effectively several years ahead of its time.

Nupedia (2000-2003; precursor to Wikipedia)

We're all familiar with Wikipedia -- one of the world's most visited Web sites. But it wasn't the first iteration of a free, open-source, collaborative online encyclopaedia.

Jimmy Wales initiated the pre-Wikipedia project, dubbed Nupedia, by assigning Larry Sanger -- now an ex-Wikipedian and founder of Wikipedia competitor Citizendium -- as site leader, as Wales "was specifically interested in finding a philosopher to lead the project," reminisces Sanger in an article on Slashdot.

Nupedia's first article concerned 'atonality', and was the first to pass through the early Nupedian system of submitting articles through mailing lists, as the site itself was not live at this point. When it eventually was, it looked nothing like Wikipedia but functioned in a similar fashion. Except for one key difference: articles had to be reviewed by editors before being posted.

Editorial control
This is the fundamental difference between Nupedia and what is now Wikipedia: the latter allows anyone to edit articles without so much as registering an email address, or create entirely new articles after a simple registration.

It was this difference that provoked Sanger to leave Wikipedia and start the aforementioned rival -- Citizendium -- for which articles go through a screening process and are written by certified academics and similar individuals. It's this difference that helped Wikipedia generate a total of over 6.5 million articles when counting just the 10 most popular languages on the site, whereas Citizendium offers around 6,500 (and only in English).

Nupedia closed in 2003, soon after Wikipedia passed its two-year anniversary, and is now dormant.

Webvan (1999-2001, precursor to Tesco.com, et al)

Thankfully, the UK didn't have its own version of Webvan -- it was one of the most epic fails in the dotcom bubble fiasco. It was a Web site that sold groceries such as bread and vegetables in the US, and was founded in 1999.

Within 18 months it had spent $1bn (over £500m at today's exchange rate) on a string of $30m futuristic warehouses, rapidly expanded into multiple US cities, raised almost half a billion dollars by going public and even bought out one of its largest rivals, HomeGrocer. By 2001, it announced its bankruptcy, firing 2,000 employees in the process.

Live faster, die younger
Webvan -- none of whose senior executives or investors had any experience in the supermarket trade -- went from being a $1.2bn company with 4,500 employees to being liquidated in under two years. High-profile investors in the store, including Sequoia Capital (which fortunately got it right with Apple, Google, Paypal and others), would have known trouble was in store for their investment when they saw Webvan's stock plummet from its all-time high of $30 to just six cents within a few months.

"One of the hallmarks of the dot-com crush has been the presumption that you needed to get big fast, which worked for Amazon.com and virtually no one else," commented Gartner analyst Whit Andrews in an interview with CNET.co.uk's sister site News.com at the time of Webvan's bankruptcy.

The site exists now as merely a traditional link farm, a relic of one of 2001's most enormous financial implosions, which all binary entrepreneurs should be familar with. If nothing else it can stand as a cautionary example of how not to start your Web business.

(Image credit: Lindsey Turrentine, CNET.com)

Beenz (1998-2001)

Back at the turn of the Millennium, Beenz.com tried to form its own Internet currency. You could earn -- yes -- beenz by buying products from participating Web sites, among other methods, and subsequently redeem your beenz for products and services in real life.

The idea was a fairly simple one -- on online version of today's multi-store loyalty card schemes, such as Nectar in the UK -- but its founders got caught up in their 'international currency' hype. Beenz ultimately hit the big red button marked 'FAIL' and went under in 2001 after neglecting to prove that the idea was anything more than an ambitious loyalty points scheme.

Or was it?

There was a huge controversy over the idea of a global, online currency, and as making your own money is very much illegal, Beenz came under severe scrutiny from governments around the world. Its offices were even raided by the police and the UK's Financial Services Authority. But this was all in spite of massive investment from some serious people, and a partnership with MasterCard that allowed your beenz to be credited to your account.

It seems, however, that beenz went the way of so many of its contemporaries -- most of its clients were dotcom failures themselves, and they took beenz with them. Its technology was eventually bought by Carlzon Marketing Group in the US, and it officially joined the ranks of hasbeenz.

Pets.com (1998-2000; precursor to: PetPlanet, et al)

A company that goes public and subsequently liquidates itself within a year is a classic example of what the Internet bubble burst did to businesses. Pets.com was the classic example of this classic example, and no-one felt the wrath of the immature online shopping world as much as Pets.com, or more to the point, its risk-taking founders and investors.

Pets.com sold pet food and accessories in 2000, and like Webvan spent hundreds of millions of dollars on infrastructure, marketing and warehousing, but discovered it would take anything up to five years just to be earning the $300m a year it needed to earn to simply break even.

Hesitant customers
This was a time where countless millions upon millions of people who are online today were just considering buying a modem, and far away from putting their credit card details on to "this Internet thing everyone's talking about".

So when the company tanked, high-profile publications jumped all over it, commenting on how dangerous a space Internet business was at the time.

If you ever bought anything from Pets.com, hopefully you still own it, because it's a fine memento of the days where it was possible for a business to lose money almost as fast as a football club.

AudioGalaxy (circa 1998-2002; precursor to: BitTorrent and torrent sites)

Napster, Kazaa, Grokster -- these are just a few P2P services that rose up, offered free distribution of music, then got sued out of existence by the record labels.

But AudioGalaxy, which began as an FTP search engine in 1998, offered a different approach to file-sharing -- it provided a community, an edited front-end that promoted featured bands, and operated on a pseudo-centralised network that used a Web-based interface and a desktop application to facilitate music discovery and downloading.

Napster 2?
For anyone using LimeWire these days, AudioGalaxy may be completely new to you, but it was one of many services that sprang up to replace Napster shortly after the Millennium. It, too, was ultimately sued out of existence.

It's important not to forget AudioGalaxy, though, as it was one of the most innovative P2P applications in history, and a huge number of people loved the service. Although the protocol and delivery method is very different, BitTorrent is loosely comparable to AudioGalaxy in that communities can be built around available files, and editors and users can promote and discover music by looking at what other people have suggested you check out.

AudioGalaxy shut its doors for good in 2002.

Stage6 (2006-2008; precursor to: Veoh.com)

DivX and Xvid are highly thought of in the video world, thanks to their efficient encoding techniques and superb image quality. With this in mind, DivX launched Stage6 in 2006 to showcase the codec's abilities, and to provide high-quality video downloads from producers and users.

It was a welcome service, considering the low bandwidth and poor video quality of sites such as YouTube. But of course, the intense bandwidth and data transfer costs weren't being generated by users, as Stage6 didn't cost a bean to download from. This resulted in reported costs to DivX of around $1m a month.

High definition
What made Stage6 particularly unusual is that it offered support for 1080p HD video -- although our HD guru Ian Morris mocked the claim on the grounds that, while it offered a frame size and rate of 1080p, the data rate was so low it isn't worth comparing to any 'proper' HD format, such as Blu-ray. Even so, its on-demand, Web-based nature made it lip-smackingly attractive to producers and downloaders alike.

The site now points users to Veoh -- a site that offers high-quality streaming, supports DivX uploads and lets users download the originally uploaded source file, using P2P technology. The company is not affiliated with DivX, although it is backed by Time Warner.

Historical search engines
We all know what a search engine is. You may well have found this article by using one. And it's not our intention to document their history, though we do want to pay homage to ones you may never have used.

Archie, for example, is credited by pretty much everyone as the first search engine, and was created in 1990 by Alan Emtage. You could argue that the 'Integrated Information Management' system created by Steve Myers in 1985 was truly the first, but it was never a Web search tool, as it was used by a business for internal system searching, based on keywords and documents they reference.

One of the first three Web engines you may recall is HotBot, which launched in 1996 and was the Inktomi database creators' first commercial customer. What you might not be aware of is that it was owned and operated by Wired magazine. It's still knocking about and primarily uses the Yahoo Web directory.

You may not even remember 1998's DirectHit.com, but it ranked search results based on what links users clicked on, how long they stayed on the page they were directed to, and whether or not they returned to the search results listing to find a more appropriate link. Its demise came after a timely acquisition by what was then Ask Jeeves, circa 2000.

And let's not forget All The Web -- an engine based on technology developed by FAST (Fast Search & Transfer), a result of research at the Norwegian University of Science and Technology. Launched fully in 1999, All The Web became a respected player in the search market for a brief period. It was ultimately bought by Overture, which also bought AltaVista. Overture itself was subsequently acquired by Yahoo and All The Web now mirrors the results generated by Yahoo searches.