Whether you’re talking about Facebook, Google or Apple, there’s no doubt that Silicon Valley is capable of producing some big winners. It’s also capable of producing plenty of companies you’ll never hear about, which fizzle out without ever making much of an impact — or a return for their investors.
There’s also a third category: the companies that appear to be set for superstardom, only to plummet back down to earth. Reasons can vary from bad management to failing to deliver on promises to, sadly, just being way ahead of their time. Here are eight failed tech companies that rose to power and fell from grace — in a big way.
Remember when we spent hours chatting on AOL Instant Messenger, AOL’s once groundbreaking instant messenger service that, for many of us, was the first experience we had of speaking to folks over the internet? Remember when having an AOL email wasn’t something to be horribly embarrassed about? That time was the late 1990s.
Then AOL merged with Time Warner for $164 billion, in what is possibly the worst ever business merger. A few years later, the “declining value of [the] America Online property” led to a giant $100 billionr yearly loss, more and more people moved away from AOL’s dated service, and services like WhatsApp and Messenger stole AIM’s audience — leading to this week’s announcement that the AIM service is being shuttered.
Our biggest question in all this: what happened the gazillions of AOL trial CD-ROMs that are still presumably floating around somewhere?
If there’s a posterchild for the stratospheric rise and meteoric fall of would-be dot-com giants in the late 1990s, Pets.com has to be it. With the idea of selling pet food and accessories online, Pets.com would today make for a very healthy eBay business. Of course, back in the decade of Bill Clinton, Nirvana and the first PlayStation, venture capitalists decided it could be a whole lot more than that, and pumped in upwards of $100 million worth of funding.
The company went public in February 2000, had its own (well-received) Super Bowl ad, bought out its main competitor and then rapidly deflated as the dot-com bubble burst. Within a year, its share price fell from $14 to under a dollar. Losing money with every sale it made, Pets.com was eventually put down in November 2000.
In its early days, Bitcoins were worth a quarter of a cent each. Today, they’re worth $4,300. Great deal, right? Quite possibly, but if you’d have had that same early adopter mentality for online currency in the 1990s, you may well have sunk all your savings into Flooz.
A voucher-like alternative to regular money for online purchases, Flooz was widely publicized during the dot-com era of tech exuberance — with none other than Whoopi Goldberg acting as its spokesperson. It collapsed in 2001 after allegations that it was being exploited by Russian criminals, who stole credit cards and used Flooz’s currency to launder their ill-gotten gains.
If you’re old enough to remember the connecting sound of 56K modems and seemingly every website having a constantly-looping MIDI track playing in the background, you’ll probably remember GeoCities. In a time before we all had social media profiles, blogs, and eschewed local storage for keeping our files in the cloud, GeoCities’ novel promise was giving everyone their own personal part of the internet.
Sensing that GeoCities was tapping into something that appealed to large numbers of users, Yahoo bought it for a massive $3.5 billion in 1999. Unfortunately, it was quickly supplanted by early social networks like MySpace. Before long, having a GeoCities page looked more like an embarrassing admission than a sign that you were ahead of the curve.
It was eventually closed down in the United States in 2009, although continues to live on in Japan. And speaking of MySpace…
Consider this crazy statistic: back in June 2006, more people visited the social network MySpace than visited the Google homepage. Jump forward today and, well, frankly we had to visit MySpace’s website to remind ourselves of whether or not it’s still going. (It is, but in much the same way that we might consider the undead zombie version of a person you once loved to be still going.)
For a short time, however, MySpace was brilliant. Then it began to flood its page with ads, while reminding us with every garish homepage that 99.9 percent of people are not supposed to be designers and should never be given the ability to skin their profile by combining leopard skin backdrops with barely-visible neon writing. Facebook took what worked about MySpace, tweaked it, and found the winning formula.
People love toys. People love ordering things over the internet. Put the two things together and what do you get? Well, yet another dot-com bust, to be perfectly honest.
Before that, however, eToys.com was one of the world’s most visited websites, and a genuine disruptor which challenged the might of existing toy retailers like Toys R Us. Unfortunately, it grew way too quickly, while continuing to lose a whole lot of money. It eventually died a death in February 2001.
Jawbone, a company which made everything from Bluetooth speakers to fitness wearable devices, announced that it was throwing in the towel earlier this year. Despite having some success with its UP series of wearables, Jawbone struggled to keep pace with the competition — especially the heavy hitters like Fitbit and Apple.
Its owners are now in the process of setting up a software platform company, but the days of Jawbone wearables is, it seems, over.
The Netscape Navigator browser was the Google Chrome of its day. Created by Marc Andreessen and Silicon Graphics’ Jim Clark, it quickly established itself as the primary portal for accessing the internet in the mid-1990s. It was also one of the first big dot-com era IPOs, when it went public in August 1995.
Unfortunately, Microsoft had a Netscape-killing ace up its sleeve with Internet Explorer, which shipped with Windows 95. The two companies went back and forth over market share for some time, before Netscape seemingly dropped off the map by failing to launch a new updated Netscape refresh in a timely manner.
Internet Explorer overtook it in popularity, and things gradually fizzled until new parent company AOL put it out of its misery in 2008.
You’ll notice that most of the names on this list come from the dot-com bubble of the late 1990s. After that bubble burst, venture capitalists assured us they would never again fall for companies buoyed by massive amounts of hype with few tangible results. Theranos was a reminder that this isn’t true.
A health tech company which claimed to have created blood tests which required only a tiny blood sample, Theranos carried an estimated $9 billion valuation within its first decade. It also made a celebrity out of its youthful founder Elizabeth Holmes.
The problem? A series of damaging reports in the Wall Street Journal, which revealed the technology didn’t actually work as described. The company is still going, but it’s a shadow of its former self. CEO Elizabeth Holmes also had her personal fortune downgraded from $4.5 billion to $0 by Forbes. Ouch!
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