Dot.com, Dot.com'ing and Dot.com'ed Businesses

Often I get mails asking for a precise definition of Dot.com businesses. With several companies getting XYZ.com as their web-address many of you think Dot.com means just getting a Domain Name registered. It is far from it. Of course there is enough to confuse you - books with titles Dot.com from celebrities published by none other than Harvard Business School Press, Advertisement from Sun Microsystems all over the bill boards in Bangalore and Bombay and the media writing stories on Dot.com companies.

This short note is intended to provide a perspective. I use my own terminology - by no means well accepted - Dot.com, Dot.com'ing and Dot.com'ed - to explain my argument. Hopefully you will be less confused after reading this.
Happy reading!!!

Internet is rewriting the business rules in every sense. Companies are born overnight, grow to dizzy heights and start threatening established companies. For example Amazon.Com, the Internet bookstore could grow bigger than the entire publishing industry in United States and threaten the dominance of the 175 year old bookstore giant Barnes & Noble in less than 5 years. The very definition of wealth & the process of wealth creation are changing fundamentally. Microsoft with a turnover of about $ 14 billions could garner market capitalization of $ 500 billions at one stage, that is much larger than that of "big blue" IBM, with a turnover of almost $ 80 billion. Close at home, Wipro in early March 2000 became the No 1 in market capitalization exceeding even that of established giants like Tata Steel and Tata Engineering and even MNC's. In fact, in terms of market capitalization based on BSE, Infosys & Wipro together accounted for 50% of the nation's wealth in March 2000. A lot has been written about this phenomenon, generally known as E-business. IBM, HP, Compaq, Intel, Cisco & Microsoft talk of E-business strategies. At least one company, namely, Sun Microsystems has created a paradigm that is well articulated in their recent advertisements "Sun is the dot behind the DotCom companies". There are several books that carry "DotCom" in their titles. Even the streets of Bangalore have huge advertisements of Rediff.com and Aztec.com. What is the real stuff behind all this seeming madness?

Companies like Yahoo.com & Amazon.com are path-breaking companies in the DotCom business. Companies like Sun Microsystems and IBM enable other companies to become DotCom companies - they are the DotCom'ing companies. Companies like General Electric, which are embracing the philosophy of E-business to transform themselves, are getting DotCom'ed. In the emerging Internet economy the corporations of tomorrow would all belong to one of the three categories - DotCom Companies, Dot Coming Companies or DotCom'ed Companies.

A DotCom Company is an organization that depends on the Internet for its very survival. In fact the very business model of DotCom Companies is based on the Internet. Yahoo is a classic case of a DotCom Company

DotCom is a simple notion of a company with a web strategy. In the early days of corporate use of Internet, it was perceived primarily as a communication vehicle with e-mail as the primary tool. The visiting cards of company executives prominently displayed their e-mail address. The speed, convenience and cost were the prime motivating factors for the corporate use of Internet e-mail. By mid 90's, web presence became the order of the day. Corporations announced their Web presence to the world at large by exhibiting their URL, which indicates their domain name. Thanks to the foresight of the Internet engineering task force, and their domain classification, there was a higher-level domain of Dot Com (.com) to indicate companies (Vs .edu to indicate educational Institutions that pioneered Internet usage in 80's). Even though domain name is like an address, thanks to the global nature of the Internet, there was no concept of neighborhood in a local sense (country, region or continent). The American economy controlled most of the primary activities of the Internet during the early days (it continues even today). Due to increased use of E-Commerce, which knows no state boundaries and the absence of the necessary cyber laws, domain name registration was centralized in the U.S.A. This was mainly to control potential future taxes, when they are imposed, if at all, as sales tax is generally based on geographic location. Suddenly Countries across the globe, namely those in Europe, Africa, Asia & Australia started their domain names with the DotCom address. Naturally there is a deluge of DotCom Company names. An intuitive way to keep up with this flood was a listing of the DotCom companies like the earlier phone books, in paper-based directories. In fact, there were a few attempts to produce such Internet directory books in early 90's. A further extension was to catalog them using categories just as we have yellow pages for phone books. While phones recognize a geographic region and grow rather slowly, Internet is truly global and grew at a breathtaking speed during the mid 90's. Since the domain name registration process itself was largely automated, the domain names were available in machine-readable form. Also routers that are needed for the operation of Internet, any way carried electronic versions of such listings. This led to the idea of electronic versions of Internet white books & yellow books (domain name listings). Thanks to development in data base technology, it was easy to search through such domain names. The sheer size of the listings of companies throughout the world necessitated super efficient search schemes. This was the basis behind the birth of search engines. In turn, companies like Yahoo that created a business model out of those search engines were born.

Yahoo represents a typical DotCom Company. Without Internet Yahoo has no existence. The business model of Yahoo is built around the Internet.

The market capitalization of Yahoo exceeding that of Procter & Gamble indicates the future potential of Internet economy. The core competency of Yahoo lies in its ability to continuously optimize their search engine to provide a consistent performance in spite of explosion in the number of web servers and web pages. The next generation of search engines that would be pioneered by Yahoo would fundamentally change from syntax-paged search to semantic-based search and ultimately knowledge-based search. The maturity of core competence of Yahoo explains their decision to outsource their web hosting to companies like Exodus communication. Today Yahoo has metamorphosed itself to be a Portal than a mere search engine.

There are several examples that are like Yahoo. Rediff on the net & 123.com in India are similar to Yahoo. There are several other examples of DotCom companies who piggyback on a company whose business model is translated to the web with a few enhancements. The classic example is Amazon.com, which created a virtual bookstore, First Virtual that created the first virtual bank, E-bay that created the fist auction site and E-toys that created a virtual toy store. It is obvious that the success of these companies is primarily dependent on the success of their prime business - for example if all the authors decide not to write books, Amazon.com book store will naturally go out of business.


A DotCom company needs a whole set of tools & technologies to implement their web strategy. This includes Web servers, Firewalls, Proxy servers, Domain Name Servers, Routers, High performance servers, High availability servers & disks, Content creation tools (like HTML editors, visualization. Image editors, animation tools etc), Web-database integration tools in addition to Internet Service Providers and access devices (PC, Net PC, Pho