Three things came together in the second half of the 1990s. Tim Berners-Lee's World Wide Web, designed at CERN in 1989, became publicly usable through Mosaic (1993) and Netscape (1994). The U.S. Federal Reserve held interest rates low, making capital cheap. Venture capital in Silicon Valley reached record levels. The result: thousands of "dot-com" companies were founded between 1995 and 2000. Amazon (1994, Seattle), Yahoo! (1994, Stanford), eBay (1995), and Google (1998, Stanford) are the still-standing examples. Investors paid for metrics like user count and page views rather than revenue; waiting for profit was treated as a 20th-century habit.

The NASDAQ Composite stood near 1000 in 1995. On 10 March 2000 it touched an intraday high of 5132 and closed at 5048.62 — a fivefold rise in five years. In the same weeks the Federal Reserve began raising rates, the Japanese yen strengthened, and Microsoft lost its antitrust case; the trigger was multiple, but the direction was clear. Heavy selling began on Monday 13 March 2000. By the end of 2000 the NASDAQ had fallen 50%; by October 2002 it bottomed at 1114 — roughly a 78% loss from the peak, with trillions of dollars in market value wiped out over twelve months. Pets.com (founded February 1999, closed November 2000), Webvan (1999–2001), and Boo.com (1999–2000) became the era's epic failures — Pets.com spent more on its Super Bowl ad than it ever earned in annual revenue.

The importance of the crash lies less in the bubble's size than in who survived. Amazon's stock fell from $113 in 1999 to $6 in 2001, but the company survived; Google's 2004 IPO opened at $85; eBay grew. Giants of the 1990s like Yahoo! and AOL shrank or disappeared. The survivors went on to build what would be called the platform economy: cloud computing (Amazon Web Services, 2006), search advertising (Google AdWords), mobile app stores (App Store, 2008). The dot-com years were also when fiber-optic backbone was laid; cheap bandwidth opened the door for YouTube (2005), Facebook (2004), and Netflix streaming (2007).

The dot-com bubble is the internet version of a recurring pattern in economic history — the "techno-financial bubble" (British railway mania of the 1840s, radio in the 1920s). In Carlota Perez's framework, a new technological paradigm first produces a speculative frenzy, a crisis clears it out, and then a mature deployment phase follows. The 2000–2002 crash is not the moment the internet failed but the transition where it began acquiring its real economic weight from 2005 onward. The FAANG of the 2010s (Facebook, Apple, Amazon, Netflix, Google) and the AI giants of the 2020s were built on this base — together with the modern debates over market concentration, data monopolies, and technology rents.