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Witness 2000: review of the year Rory Cellan-Jones
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Rory Cellan-Jones on dotcoms becoming dotgones
.com montage
April
In this month:
Armed forces seized Elian Gonzalez, the Cuban boy at the centre of a custody battle in Florida.
Muslim rebels snatch some 20 people from a Malaysian resort, starting a long-running hostage crisis.
Pakistan’s former prime minister, Nawaz Sharif, was jailed for life (he was released to exile in Saudi Arabia in December).
The United Nations said that drought in the Horn of Africa could leave 16 million people at risk of starvation.
Zimbabwe’s President Robert Mugabe changed laws to allow the government to grab white -owned land - Mugabe supporters killed a farmer defending his land days shortly after. Japan’s prime minister suffered a massive stroke - prompting the resignation of the government. He died in May.
Russian cosmonauts began attempts to save the ailing Mir space station. Scientists announced that the universe was flat.
As for alien life, pictures of the alleged site of a US government conspiracy to cover up UFO landings, Area 51, appeared on the internet - no sign of little green men though. Declaring that they wanted to bring global financiers down to earth, thousands of protesters turned up at the annual IMF/World Bank meeting in Washington.
In the UK, the Food Standards Agency was established. Farmer Tony Martin was jailed for killing a burglar who broke into his home.
Hansie Cronje was sacked as South Africa’s cricket captain in the widening betting scandal. Pete Sampras won a record eleventh tennis masters title.
Bernie Grant, one of the most prominent leaders of the UK’s black community, died.
Best of BBC coverage:
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Dot.com to dot.gone
It was the 21st century gold rush - but as BBC internet correspondent Rory Cellan-Jones witnessed, it dried up far faster and caused markets to tumble.

Read the transcript

In the middle of April, I visited the very centre of the dot com revolution. Without Stanford University, Silicon Valley would probably not exist.

Its graduates have ranged from the founders of Hewlett Packard, to the people behind Yahoo.

And the students I spoke to were supremely confident that they would soon be running billion dollar dot com enterprises - many were already starting companies even before they left college.

A couple of days later I interviewed the head of Silicon Valley's Chamber of Commerce.

Like many Americans he had the latest figures from the high tech NASDAQ stock market on his screen - and he was looking worried. The market was falling off a cliff. Investors had begun to realise that dot coms might provide the road to ruin rather than riches.

A few weeks later I stood in London's Carnaby Street, out of fashion since the Swinging Sixties, but once again the place to be ... if you wanted to watch Britain's dot com bubble bursting, that is.

Out of the offices of Boo.com the online fashion retailer which had promised to be Europe's first big hitter in a landscape dominated by the Americans came a procession of young software engineers.

They made their way round the corner to Boo's main offices in Regent Street, home to the marketing team which had spent a fortune promoting the company in eighteen countries.

There the company's two Swedish founders, Ernst Malmsten, a literary critic, and Kajsa Leander, a former model, told the staff that Boo was bust.

Its investors, which included the French businessman Bernard Arnault and the investment bank JP Morgan, had put a hundred million pounds behind the vision of the two Swedes.

But after watching that money evaporate in little more than a year, they had declined to pour more cash into the bottomless pit of boo's ambitions.

They had hoped to recoup their investment by floating boo on the stock market. But now plunging share prices had closed that exit. .

As they filed out afterwards the staff seemed remarkably upbeat. Most of them had enjoyed the exciting, if chaotic, atmosphere of the company - although many had begun to wonder if even a dot com should be quite so disorganised.

As I stopped them to ask about their prospects, all were convinced they'd have no problems finding jobs. And indeed recruitment agents were waiting outside to snap them up.

After years of standing outside factories threatened with closure and trying to persuade grim-faced workers with uncertain futures to talk, it was quite a contrast.

Nobody was shouting "vultures" at the media this time.

The staff trooped off to a local bar - the Midas Touch, believe it or not - where one of the recruitment agencies provided free drinks. Boo ended, in fitting fashion drinking at someone else's expense.

That evening I returned to Boo's offices to interview Kajsa Leander.

Amidst the wreckage of her company, Ms Leander insisted that her backers had been short-sighted. "If investors don't believe in a company like this it's going to be very hard for everybody else." she told me.

But as the truth began to emerge about the spendthrift way in which the company had been run, the whole image of the dot com industry took a knock.

The cost of creating a website which many potential customers simply could not use had been enormous.

Boo had declared it would use cutting edge technology - Miss Boo would guide shoppers around the site.

But unless you had the latest browser and a very fast connection you found yourself unable to get in to the virtual store. As one critic put it, it was like inviting people to a party and then telling them their clothes weren't smart enough when they arrived.

Meanwhile marketing executives were flying back and forth across the Atlantic, holding dinners at fashionable restaurants like the Ivy - but in the end failing to generate the kind of sales needed to start making the books balance.

While Boo's demise was not a tragedy for its staff, it certainly spelt doom for those wanting to follow in its footsteps.

Suddenly venture capitalists were a lot less keen to give money to people with huge ambitions but little in the way of experience of running a major organisation.

For while you could start a dot com with little more than a domain name and a good idea, the realisation had dawned that to grow it you needed some old-fashioned business skills.

Smart twenty-somethings who'd managed to raise millions in a couple of weeks from investors keen to surf the dot com wave found that nobody was answering their calls when they needed more money to keep going.

Share prices continued to fall so fast that there was soon talk of the 95% club - made up of entrepreneurs who'd seen their paper wealth fall to a fraction of what it stood at in May.

The contrast in mood between the beginning and the end of the year could not have been more stark - bust had followed boom in spectacular style…

There are some rays of hope for next year. There are still plenty of young entrepreneurs in Britain desperate to start internet companies. There are still large sums of money in venture capital funds looking for a home.

But after their disastrous dalliance with Miss Boo, the investors will exercise extreme caution before dipping their hands into their pockets again.