Information Systems Management - Research Paper Example

? Management Information Systems Project Part A The Dot.com Bubble The Dot.com bubble is an internet bubble speculation of the gradual progress of the stock market in the field of the internet. This bubble is also significant in the bust of the cycle in the market. The Dot.com bubble was an e-commerce with a specific feature and distinctive theme (Argenti & Barnes, 2009). This bubble was designed to mock the former bubble by the name web 2.0. The bubble in the dot.com website was a 1999 and also a 2000 bust in the media. The dot.com bubble was a cycle that emerged in form of nuttiness. Although the dot.com bubble was a new bust, it was not the first bubble to come up. This is because there was the CD-ROM bubble that was in existence. This CD-ROM bubble was from the companies like the bill gate’s company by the name “information at your fingertips”. This company was among the companies that were the watchword of the world. Another example of a company that was with the CD-ROM bubble is the Microsoft home (Preissl, Bouwman & Steinfield, 2004). The chief reason for the upcoming of the dot.com was to offer an e- commerce service to the computer internet users. The bubble was basically for the marketing in the internet to the potential client. The dot.com bubble aimed at increasing the internet stock market for specific companies which were calling themselves the dot.com. The NASDAQ was at the highest level of its stock marketing records during the dot.com bubble. Subsequently, NASDAQ is the dominant and widely known for the market capitalization. For instance, the NASDAQ in the year of 2000 was able to make up to about 5048.62 peak value, which was double the previous year’s amount which was roughly 2500. This was consequently termed the2000 burst as the cataclysmic. The chief examples of the big busts that were capable of buying these bubbles included the Microsoft Company, the dell, and also the Intel Company. Additionally, the Cisco Company, the oracles and also the sun Microsystems Company. These companies were competent of venturing into this business by funding the bubble. For instance, a sum of approximately 600 US Dollars was put for utilization in the starting up of the wed 2.0. Unfortunately, this funding did not lead to the subsequent success of the bubble. Thus it was a loss to the companies that put their money into the venture. Moreover, these companies that were dealing with the internet business were known by the name of the “four horsemen of the NASDAQ.” this was chiefly due to their significance in the contribution of the capitalization in the business industry (Preissl, Bouwman & Steinfield, 2004). Unfortunately, the NASDAQ lost a huge sum of cash during the funding of the web 2.0 and also the dot.com. This is because the NASDAQ businesses thought that they were going to get a higher amount of revenue from the investments in this bubble. The chief significant acquisitions market is the sole vital and further the only feasible supply of the potential startup of this bubble. Though there has been a significantly large and further potential high profile of the web 2.0 acquirement, the investors have subsequently been reducing their potential expectations since the time of 1998 (Argenti & Barnes, 2009). Evidently, the price of these companies that was capable of acquiring was large during the first year of the funding. Unfortunately the amount began to reduce for the next coming financial years, thus leading these companies into a financial loss (Preissl, Bouwman & Steinfield, 2004). We learn from the dot.com bubble that when making long-term investments, we should do it when prices are not overvalued as well as when fundamentals are good, especially when it comes to stock market. This is because the market is bound to clash due to overvaluing of prices as well as due to poor fundamentals. In case of short-term investments, one should trade and upon getting the profit, move out. Last, one should be skeptical when a company is promising to make life-altering transformations. This is because the changes may take too long to happen or never happen at all even if they are realistic. Hence, the bubbles should teach investors about being keen when trading, especially in the stocks. This is because so far the bubbles have been more problematic than solution. Part B The Web 2.0 Bubble The web 2.0 bubble is the bubble that followed the Dot.com bubble. This bubble is a social media that allows the users to freely connect through the internet. Subsequently, the users are capable of interacting with friends across the globe. Furthermore, this bubble creates a channel for the internet surfers to chat freely, to upload pictures, and also the videos of individuals as well as music. For instance, there are social media like MySpace that allows chatting, there is the Flickr that is for users to tag and also share their pictures with friends. This web is thus put into comparison with the dot.com bubble. The web 2.0 is a bubble and not a temporary fad that will finally burst. This web 20.0 is further seen as the beginning of something with a much staying power. The bubble is a fad that is fading away because it is simply revealing the way bubbles came up (Argenti & Barnes, 2009). Furthermore, for every upcoming bubble that succeeded the other, it has been worsening with time. Thus, it is extremely hard for any given individual to be capable of telling the way the bubble cycle was taking. This is because the cycle is seen as a continuous one for the recurring event. Therefore, the Dot.com bubble is seen as prelude by the world (Shuen, 2008). Second, this bubble did not succeed because during its startup time in the year 2000, there were no adequate requirements that were put to run the bubble. This lead to a great loss of the fund put in place to start the web 2.0. Consequently, this incidence was further due to requirement of huge amount of funds to carry out the administrative procedures for the setup of the web 2.0. The third reason that shows why the web 2.0 is a temporary fad is the idea that the market has been able to learn from the past incidences. For instance, they are now more careful with the idea of investing in web 2.0, although the web 2.0 is trying hard to convince the public of their benefits for the future profits from this venture. Thus the public has been keener in believing this company with their false predictions to attract the public. Fourth, the companies that were investing in the web 2.0 were not capable of making profit straightforwardly from the site. This is because some of the interest was for the running and supporting of the web site. Finally, there is the disadvantage that the value of the site was never constant. There was a frequent change on the value that the site and moreover the developers were utilizing in the running of the site. This subsequently was the cause of the financial loss facing the investor companies (Shuen, 2008). Unfortunately, this idea of bubble burst was a disadvantage especially to the technology companies. This is because the bubble was targeting the technology industry for devious business deals, which eventually facilitated the downfall of these companies. Furthermore, the idea of the web 2.0 as well as that of the dot.com was due to the facilitation of the external factors. These external factors include the increase in the outsourcing which evidently caused unemployment of the computer geeks. This act further was an influence in the occurrences of terrorist actions to the US companies. Thus the bubble is seen to have cause major problems to the nation rather than being helpful. References Shuen, A. (2008). Web 2.0: a strategy guide. Canada: O’Reilly Media Inc. Preissl, B., Bouwman, H., & Steinfield, C. (2004). E-life after the dot com bust. New York, NY: Springer publishers. Argenti, A., &Barnes, C. (2009). Digital strategies for powerful corporate communications. New York, NY: McGraw-Hill publications. Read More