Financial markets and online advertising: reevaluating the dotcom investment bubble

Abstract

While the dotcom period is often dismissed as a false start in the history of the web's commercial development, it is better conceived of as highly generative of modern structures of online advertising. Soaring investment markets and the developing online advertising sector entered into a pattern of mutual reinforcement that began in 1995 and intensified until the bubble collapsed in 2000, transforming the character of the web in the process. This article sketches the contours of this generative capacity, focusing on the production of demand for online advertising services. Taking the approach of critical political economy [Pickard, V. (2013). Being critical: Contesting power within the misinformation society. Communication and Critical/Cultural Studies, 10(2–3), 306–311], this narrative is contextualized as an outgrowth of broader social trends, namely the increased importance and interconnection of marketing communications, media technologies, and finance within the changing capitalism of ‘the new gilded age’ [Gillespie, R. (2012). Gilders and gamblers: The culture of speculative capitalism in the United States. Communication, Culture & Critique, 5, 364].

Keywords:

• Internet advertising
• finance
• dotcom bubble
• political economy
• marketing communications
• Internet history

Notes on contributor

Matthew Crain is an adjunct professor at DePaul University and Post-Doctoral Fellow at the University of Illinois, Urbana-Champaign. His work examines the transformation of media and advertising systems in the digital age with an emphasis on political economy and technology. [email: [email protected]]

Notes

1 As McChesney (2013) notes, ‘the notion of competitive free markets may be great for economics textbooks and consumers, but it is a nightmare for any sane capitalist’ (p. 37).

2 Get Big Fast investment is not unique to the dotcom period. Perez (2002) argues that this type of risk investment was integrated into five major technological revolutions since the 1700s.

3 Compiled from Bloomberg, Capital IQ, and Wharton Research Data Services financial databases.

4 Data represent IPOs with an offer price of greater than five dollars.

5 Compiled from Bloomberg, Capital IQ, and Wharton Research Data Services financial databases.

6 Of course, these political economic forces have been building steam for decades. See Harvey (2005), Schiller (1984), and Schiller (2007).