Dotcom Bubble and Hal Varian

1995-2000 Dotcom Bubble


This morning, Patrick O’Shaugnessy retweeted a Carl Quintanilla tweet on the 1995-2000 dotcom speculative bubble. I wrote about the dotcom crash in real-time for Disinformation. A few years later, I did a post-mortem on the 2000 crash whilst studying in Swinburne University’s Strategic Foresight program.


I thought this morning about what was the key insight to emerge from dotcom bubble. It was probably Carl Shapiro and Hal Varian’s book Information Rules: A Strategic Guide to the Network Economy (Boston, MA: Harvard Business Review Press, 1998): a popularisation of information economics and network topology. Varian was at the University of California Berkeley and later became Google’s Chief Economist. Varian’s academic research laid the groundwork for many of the internet’s later manifestations, from recommender systems to search engine optimisation marketing to platform ecosystems.

29th November 2010: Salon Media’s Exit Strategy

In September I revisited’s 10-Q filings after a five year absence. I had kept an eye on and other media properties during the ‘deathwatch’ period after the dotcom crash on 14th April 2001. Salon Media is now looking for an ‘old media’ buyer, reports Wall Street Journal‘s Russell Adams.

The trigger for this however isn’t in Salon’s advertising model or operating costs, as Adams suggests. Rather, the trigger is in the repayment schedule of convertible promissory notes and other short-term debt securities which Salon Media needs to pay its investors. As I noted, these notes ‘mature’ in March and October 2012 when investors expect repayment. Interest payments and short-term financing costs could affect Salon Media’s operations. Salon Media’s chief executive Richard Gingras has cut operational costs from its earlier diversification forays, and has trimmed editorial. He is now also looking for Salon Media to be acquired as an exit strategy. Adams observes that Salon Media doesn’t have the network cost structure of Gawker nor the hybrid model of Politco.

It will be interesting to see which suitors emerge, and on what terms, if Salon Media is ‘in play’.