Hype of Yesterday: The Dot-Com Bubble Bust

Most adults can remember the technology bubble (called the “dot-com bubble”) from 1995-2001; it came from the founding (and dismal failure) of new Internet-based companies, commonly referred to as dot-coms. Companies were seeing their stock prices skyrocket by simply adding an “e-” prefix to their name and/or a “.com” suffix.

A combination of rapidly increasing stock prices, wild speculation (hype and buzz), and easily available venture capital created an exuberant environment in which many of these businesses tossed aside traditional business acumen; focusing instead on increasing market share at the expense of the bottom line... grow, grow, grow! People were lining up at the NASDAQ counter with little regard for traditional methods of business; the investments were based on hype. Remember Garden.com? Or Pets.com? The novelty of these stocks, combined with the inflated valuing of the companies, sent many stocks to dizzying heights and made the initial investors extremely wealthy on paper.

The bubble began to burst on March 10, 2000 when the NASDAQ peaked at 5132.52 (source: NASDAQ) and by 2001 the bubble was completely deflated. According to the Wall Street Journal, the bubble crash wiped out $5 trillion in market value of technology companies from March 2000 to October 2002, leaving many people scratching their head as to where it all went. Or did it go anywhere?

The dot-com bubble was a hard lesson in blindly embracing fads and media buzz. But amongst all the hype, technology conceived and developed during the craze was quietly poised to change American life- andit did so quickly. In the shadows of the technology bubble came a number of new innovations that are today’s staples in consumer web use: online banking and bill pay; shopping online; sophisticated web-based email; Wikipedia and other “wiki” sites; internet dating and singles chat sites; online job boards; online degree programs. The stage was set for the advent of social networking; and it began to thrive.

Social Media: Hype of Today?

Social networking is certainly hyped with celebrity involvement and sensationalized by media- there’s no doubt that fad status is upon us. Twitter, for example, launched in May of 2006 and was not well known until last year. Twitter has seen an explosion of users in 2009, more than quadrupling its user base thanks in large part to celebrites and media. Recently the iconic Oprah Winfrey joined Twitter and sent her first Tweet (a message posted on Twitter) live on her show. That message was to fellow celebrity, actor Ashton Kutcher. The first-ever Tweet from space was sent by an astronaut aboard the Space Shuttle Atlantis while repairing the Hubble Space Telescope, which made international headlines. Even physicians are getting media attention by Tweeting live during surgeries.

The social media buzz started in Silicon Valley, but America sat up and paid attention when 22-year-old Harvard dropout Mark Zuckerberg became a billionaire from his website Facebook. What started as a small online community among his Harvard pals is now the fourth-most-visited website in the world (behind Google, Yahoo, and Youtube; source: Neilson Media Research).

Have You Used The Internet Today?

Like the dot-com bubble of yesterday, there is a lot of hype about social media. However, the online landscape is dramatically different today- there are a number of factors that give social media a solid foothold which were not a reality in the original dot-com era.

According to the Pew Internet & American Life Project, back in the bubble years (1995–2001) only 33% of Americans used the Internet daily. Today, 73% of Americans use the Internet on a daily basis- some 60% of those online daily engage in social media (source: Pew Research, www.pewinternet.org). Beyond the big social media sites like Facebook, MySpace, LinkedIn, and Twitter, there are hundreds of other social networking sites with niche audiences, many of those based on profession.

Another major factor today is mobile technology. Cell phone usage in the U.S. has increased dramatically since then, from 34 million to 203 million (source: Federal Communications Commission, www.FCC.gov). Advances in technology and widely popular handheld devices like the iPhone give millions of Americans instant access to the Internet wherever they go- which means they can also engage in social media without ever touching a computer keyboard.

The Human Factor and Web 2.0

Access to the Internet and mobile technology are powerful differentiators of today, but there are a number of human factors that have given social media such a solid foundation as well: choice and community.

Choice: People today want more choices in our lives and we turn to the Internet for information to help us make decisions. Google may arguably be one of the most influential conduits of information that influences choice- we search for information online to provide choices- from everyday activities like where to eat dinner to significant decisions such as employment or buying a home. In fact, physicians will tell you people are even trying to diagnose themselves exclusively by searching symptoms on the Internet. Today, more people are turning to their social networks for advice and suggestions in decision-making, because just like in “real” life, we view people in our online social network as trusted sources of information.

Engaging in social media when making a decision helps educate us and ultimately feel validated in the same way that finding information on Google does, but with a personal touch that carries more credibility. For example, I recently posted a question via Twitter to my network on where to eat dinner in Chicago while attending a conference; I could have easily Googled information and read through it, but far less time consuming was asking my network through social media. Moreover, I got direct recommendations from people based on their own personal experiences- information with much more credibility than any website. Social media is influencing choices every day- from basic consumer spending to physician referrals.

Community: As human beings, we instinctively seek groups of people who make us feel like we belong- social media is breaking down barriers for people to do that in ways no previous generations have encountered. The online communities created by social media revolve around information, direct experience, peer trust and a more sophisticated facilitation of web technologies with personal interaction. Social media allows us to manage personal relationships in today’s fast-paced, information age; we can get a daily glimpse into the lives of friends and family on our own time, and through our network we also get the daily scoop on what’s happening in the world. Through social media, we also learn about new things in every aspect of life-from musicians and artists to movies, TV shows, products and companies. If users get valuable and pertinent knowledge, quality trusting relationships, and possibly a good laugh now and then, an online community becomes important and we trust the information they provide.

Choice and community are the primary human factors that have led to what many refer to as “Web 2.0,” where Internet sites evolve from one-way communication to user generated content that engages users. Web 2.0 influences have extended social media experiences to industry, with networks formed entirely around professions and career paths.

Through channels originally established for social networking, business networking has followed, allowing people to connect with others in their same profession and share resources, ideas, advice and information. Social media has fostered collaboration among industries that was never possible before. For example, physicians Tweeting during complicated surgical procedures allow other surgeons to learn from the experience as it is happening.

The Sum of Social Media

Unlike the dot-com bubble, the value in social media for enterprise does not come from hype or promises; rather, it comes from the intelligent use of the networks social media creates. A vast majority of members on these networks don’t want to be creators- they simply want access to information and advice on how to digest it. Information is so vast today that micro groups have formed through social media to help people make sense of it all.

The importance of utilizing social media for business is becoming more and more apparent; it provides a unique new opportunity for companies both large and small- from global brands like Ford and Starbucks to local hospitals. Those organizations that leverage social media as a communication channel to reach key audiences recognize the incredible value in the personal, viral communication that social media fosters. As the old adage goes, there’s no better advertising than word-of mouth… social media platforms are giving those word-of-mouth experiences a global reach. Organizations who are engaging in the conversation through real people have the opportunity to both monitor and influence the word-of-mouth experiences being shared- the ultimate branding opportunity.

As the popularity of social media continues to increase, more healthcare organizations will recognize the deep reach social media creates with key local audiences such as patients, healthcare professionals, community leaders, local media, and the public-at-large. Beyond connecting with your patient base, it’s a great way to connect with passive candidates- those healthcare professionals who aren’t actively looking for a job but might consider an opportunity brought to their attention.

While the social media phenomenon is still in its infancy and quickly reached fad status in the United States this year, the statistics and expert predictions all point to social networking as an everlasting cornerstone of our lives. Social media channels provide the ideal environment in which to connect healthcare organizations with potential candidates- at Inhouse Assist, we’ve recognized this timely opportunity and created a new online division that is solely focused on establishing social media channels for our clients. Nurses, physicians, and other industry professionals abound on sites such as Twitter and Facebook; we’re meeting (or should I say “Tweeting”) more and more of them everyday and connecting them with organizations who need great talent.

It takes time and an expert strategy to build a brand and successfully recruit through social media, and you can accomplish wonders with little financial investment when compared to traditional recruitment solutions. The time to act is now.

Your competitors are already doing it.

To download a PDF of this white paper, click here.