2000 Roundup: The dot-com bubble pops

2000 will be remembered as the year the dot-com bubble finally burst.

The story built up throughout the year: in March there was Lastminute.com's sprightly flotation, which quickly sank. By May the bottom had fallen out of the tech sector as a whole and investors began to flee, leaving many Net startups with no option but to shut down.

The first and most high-profile UK collapse was the newly-launched luxury sportswear site Boo.com, but the closures accelerated throughout the year.

By autumn dot-coms were closing at a rate of about one a day.

It gradually became clear that the downturn was not limited to techs alone, but was connected to a wider economic slowdown. By December even the mighty Intel and Microsoft issued profit warnings because of slowing US sales, though PC market growth remained strong in other parts of the world.

Apple Computer, like many consumer computer makers, suffered from slow sales late in the year, and a profit warning in September cut the group's shares in half. Quite a change from Apple's optimistic outlook in January when it easily beat expectations.

WAP, or Wireless Application Protocol, also got off to a well-publicised start, but ended the year on a more ignominious note. In the spring the buzz reached a peak and everyone, businesses and consumers alike, wanted to know what "the mobile Internet" was all about.

By July a study found most firms didn't think m-commerce or WAP were essential to plan for, and in September Forrester Research predicted m-commerce would be a long-term flop.

None of this affected the incredible boom in mobile phone adoption, and by July half of all Britons were chatting away on their mobiles. As for the future of the wireless Net, European and American systems might be about to get some competition from Japan. NTT DoCoMo, with its incredibly popular i-mode wireless Internet system, established a London base in September and later took a stake in US long-distance provider AT&T.

Freeserve, Britain's largest Internet service provider, started off the year with strong growth but ran into trouble during the course of 2000. It launched unmetered access in March, a business model that posed a direct threat to its original way of earning fees based on telephone charges.

But in October Freeserve was having enough trouble maintaining unmetered that it threatened to bar heavy users from the supposedly 24/7 service. (To do Freeserve justice, other ISPs who tried to go flat-rate ended up flatlining instead, including Breathe.com, which expired in December.)

A bigger problem was that Freeserve's parent company, electrical retailer Dixons, wanted to sell. The task should have been made easier by Freeserve's declining share price, mirroring that of other ISPs, which meant it was ousted from the FTSE 100 index in October. But it took about six months, until December, to convince an all-stock deal with France Telecom's Wanadoo.

UK games company Eidos (quote: EID), unlike Freeserve, started 2000 with low expectations and they were borne out. The creators of Lara Croft, like much of the gaming industry, suffered as the reign of PlayStation ended to pass on to Dreamcast and PlayStation2. By the end of the year several Eidos executives had departed, including the chief executive officer.

Telecoms group Vodafone started the year with a bang by carrying out its hostile takeover of Germany's Mannesmann in February. But that deal was soon forgotten in light of a much bigger expenditure in April, when Vodafone shelled out £5.9bn for the most expensive UMTS (universal mobile telecommunications system) licence. The auction gathered a total of £22.5bn for the UK government and was followed by a similarly expensive German auction.

In March the troubled Iridium satellite telecommunications company finally ran aground after months of struggling for survival. The ordeal cast doubt upon the future of other satellite companies.

May saw the onslaught of the most widespread virus attack to date, the "ILOVEYOU" worm which started off in Asia and forced computer systems worldwide to shut down.

And, of course, in June British Telecommunications (quote: BT) revealed to the world that it was the "real inventor" of the hyperlinks used by Web surfers worldwide. BT demanded licence agreements from 17 US ISPs, including America Online, and in December took ISP Prodigy Communications to court to prove the validity of its patent.

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