the social network that anticipated Facebook

the social network that anticipated Facebook

When there is a great name that advocates a sector, there is usually a trail of pioneers who tried before but did not succeed. Even today, when Facebook (now within Meta), Instagram, TikTok or Twitter are the main social media companies, we usually remember many others that stayed on the road like MySpace or in Spain Tuenti. However, there was one even older than those now reigning and that were left on the way in the middle of the maelstrom of the bubble of dot com: we talk about A great idea, with some young creators who made a lot of money, and that ended in nonsense.

The history of is seen today as a website that many analysts consider the biggest (and most embarrassing) dot-com flop, that moment in the late 2000s when youth-driven companies had made From computing and programming, a kind of alchemy capable of turning anything into gold ended up being discovered as completely inflated.

Its founders were Stephan Paternot and Todd Krizelman, two young men who met when they were classmates at Cornell University in the early 1990s. Virtual chat rooms were catching on on college campuses at the time, and the student couple became fond of spending the time at his university. However, they did not see the chat room only as a place to interact; They saw it as a great business opportunity.

During the Christmas holidays of 1994, the two young men managed to raise $ 15,000 among relatives to create a programming company. They bought an Apple server and launched their business, which they called WebGenesis. Between December 1994 and March 1995, they programmed a site they called, surely a highly valued domain by any company today, which is currently inactive. a resounding success right out of the box

Stephan Paternot and Todd Krizelman. Cornell University

They launched the portal on April 1, 1995. By May 1, just a month later, 44,000 people had visited the site. Taking advantage of their Cornell connections, they hired recent computer science graduates and by the end of the year, they had 17 employees.

The popularity of the site, which was basically a portal for interest clubs (rather a forum) and online chats, made it relatively easy to attract investors. In 1997, the Dancing Bear Investments fund gave them $ 20 million. It was the beginning of the dot-com bubble, when everyone wanted to participate in the ‘invention’ of the Internet, and entrepreneurs were willing to invest a lot of money in sites that they believed could generate great income in the future. Some of them would, but that was not the case with theGlobe.

That didn’t stop its two founders from getting rich almost overnight. The investment earned the two 23-year-olds a salary of more than $ 100,000 each and another $ 500,000 in income from the sale of shares. The next step in your plan: go public.

And the portal went public

Cover of in the year 2000

A year later, they launched their public offering for the sale of shares, with a price target of $ 9 per share. It was Friday, November 13, 1998, the year that was the height of the dot-com bubble, and benefited from the grand frenzyand.

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Overnight, both Paternot and Krizelman had more than $ 100 million each in the form of shares.

The shares had an opening price of $ 9, but the first trade raised them to a whopping $ 87. The price rose to $ 97 over the course of the day. had set a record for the largest initial share price increase of any newly listed company in history. The company’s market capitalization value exceeded $ 840 million.

From there, they expanded to video games. They bought the magazine Computer Games Magazine, the gaming website and the online store Chips and Bits, dedicated to gaming-related material.

“The CEO of plastic pants”

However, its success was short-lived. Paternot became the subject of a CNN report on the excesses of twenty-somethings billionaires that had occurred due to the dot-com craze. He was shown spending his money rampant, dating his girlfriend, a model he had met after founding the company and, in general, being irresponsible and excessive. In fact, he said at one point in the report: “I have the girl. I have the money. Now I’m ready to live a disgusting and frivolous life, ”as he appeared before the cameras, dressed in nothing less than shiny leather pants. image suffered and he earned the unfortunate nickname of “The CEO in plastic pants.”

It became a meme before memes flooded the networks.

In 1999, the dot-com bubble began to burst when investors realized that the economy they believed would emerge from the Internet boom was not as secure as had been predicted. Dot-com stocks began to decline at an absolutely insane rate. looked especially naked when the music stopped. In the next 6 months, TheGlobe shares fell from 90 to 60, to 40, to 30 and to 10… and finally bottomed out below $ 0.10. It was a massive drop from its $ 97 price just a year earlier. The company’s market capitalization fell from $ 840 million to just $ 4 million. That is a 99.52% decrease.

Board members and investors forced Paternot and Krizelman to resign from the company in 2000. The company was taken over, but there was no way to save it. By the following summer, 50% of the staff had been laid off and site was shut down. They continued to publish Computer Games Magazine and host some of their smaller sites.

In 2003, a kind of comeback was attempted. became the headquarters of GloPhone, a Skype-like video calling service. It was a failure almost immediately.

There was more attempt to recover. Their video game magazines stayed afloat for a while, and they bought the company that owned the management rights to the .travel domains. They ended up reselling it after a few years.

By 2008, the company had become a holding company and nothing more. In 2009, the company’s net income was $ 0, and it currently has no employees, except for a small group of managers who do not get paid. Everything, until in 2021 a natural gas company took over what was left looking to use its brand for future launches. For all this, is surely the greatest example of the dot-com bubble. Its boom and bust story was told a few years ago in the National Geographic docuseries. Valley of the Boom.