-♪ Money ♪
-The '90s was a time to cash in.
Just ask E-Trade. - What? What is it?
-He's got money coming out the wazoo.
-A financial frenzy...
-It's a pretty addictive thing
when you see other people making so much money.
- fueled by the magic words "dot com."
[ Modem dialing, screeching ]
Just take your business online.
-Anybody can access anything from anywhere.
-And watch your wealth magically take off.
-I was surrounded by Internet millionaires.
-What everyone called this gold rush.
You didn't want to be left out.
-But what goes up...
-This was hubris... Flying too close to the sun.
- must... you know the rest.
-People getting laid off en masse, companies shuttering.
-People had to move back in with their parents.
-I just remember being devastated.
♪♪
[ Dial-up modems screeching ]
♪♪
-Today, I'm talking to some city pets.
Ooh! Ooh, ooh, ooh! Hey, poodles!
Did you know that Pets.com delivers food, treats, and toys?
-By the late '90s, Pets.com would be in a three-way battle
over where online customers
would buy their pet food on the Internet.
-The online competition for the pet space
was incredibly cutthroat.
-But just a few years earlier, morning-news anchors struggled
to even understand what the Internet was...
-Can you explain what Internet is?
- or how it worked.
-That little mark with the "A" and then the ring around it.
- "At." - See, that's what I said.
-Mm-hmm.
-Um, Katie said she thought it was "about."
- Yeah. - Oh.
-The information super-highway can be a confusing mix
of on-ramps and off-ramps.
-The Internet starts as a military communication network
in the '60s and spends the next 20 years being further developed
in university computer-science labs.
But it was the creation of the World Wide Web in 1990,
a series of Web pages connected by hyperlinks,
that made the Internet become something
that the average person can use.
-Your link to literature, the arts,
the world at your fingertips.
-The free transfer of information
in is accessible a way as possible.
You know, we're going to make it so that anybody
can access anything from anywhere.
I was like, "Well, that's kind of a cool idea."
-And who better to latch on to a cool new idea
than baby boomers Bill Clinton and Al Gore?
When they get elected in 1993, the World Wide Web
is at the center of their proposed tech-based economy.
-Eisenhower had built the interstate highway system.
Well, Clinton and Gore were going to bring in
the age of the information superhighway.
-Clinton makes good on his promise,
but he gets some much-needed help from a company
that builds an on-ramp to this new digital future.
I'm Rosanne Siino, and I was Vice President
of Corporate Communications at Netscape.
I was the 19th employee
and, I believe, the second female to be hired.
There was me and a lot of very, very young, smelly engineers.
-The company is founded in 1994 by Marc Andreessen,
a 23-year-old computer-science grad
from the University of Illinois,
and Jim Clark, an established Silicon Valley entrepreneur.
-Jim Clark became convinced, in talking to Marc,
that the Internet space was wide open for the taking.
Yeah, this thing that was right now being used
for scientific purposes
could potentially be used for commercial purposes.
He could envision that we might want to sell things.
He could envision that it could be used for,
you know, widespread communication.
-In the early '90s, the Web is slow and hard to navigate.
It's the domain of academics and computer geeks.
But Clark and Andreessen have a vision
to make the Web accessible to everyone.
-We ended up sort of
in the middle of the night starting this project.
What we were trying to do was
put sort of a human face on the Internet.
-True to its namesake,
the browser is a navigator to the Web,
making surfing as easy as point and click.
-Netscape Navigator was the first commercial version
of a Web browser that spawned Apple Safari.
It spawned Google Chrome.
All of a sudden, the power of the Internet that had been there
for years was available to everybody in an easy way.
Point and click... The universal language.
I'm Tara Hernandez, and back in the '90s,
I helped launch the World Wide Web.
That's a little much. Let me... Let me... Let me do that again.
I was able to witness the birth of the World Wide Web.
I like that better.
I don't want to take credit for any of that. [ Chuckles ]
-Netscape was foundational. This wasn't just a nice-to-have.
Having the browser was absolutely essential
to Internet commerce, for entertainment,
for communication, all these things.
-I'm Margaret O'Mara.
I'm professor of history
at the University of Washington in Seattle.
The very first e-mail I sent outside of my building
was in late 1993.
I thought it was amazing.
-Is everybody listening?
To begin, let us introduce you to our first college recruit.
-Wow!
-I am, in fact, the first college recruit.
-With Netscape recruiting employees fresh out of college,
traditional workplace culture of tech giants like IBM
is getting replaced.
Geeks run this startup,
and they write the rules as they go.
-Imagine going into a frat house that has an adult living there,
and that adult is Jim Clark.
And Jim Clark is trying to help a bunch of young college boys
figure out that they're now doing something
that has to be ready for business.
-One of the engineers I worked with
brought in a remote-control car
and attached a very early remote camera on it.
Didn't work very well.
We had little traditions like saving our cans
and building things out of them.
We had a massive rubber-ball fight.
[ Indistinct shouting ]
We really kind of made it
a space that we enjoyed being in.
-There was a lot of silliness going on,
but also a lot of hard work.
-Netscape people got into work
and maybe didn't go home that night,
maybe worked all the way through the night.
-I have a nice couch.
Little mattress under there I can sleep in.
-Work became the life.
And that was sort of the only life you had.
That tied into that concept of sort of manic innovation.
-Hey, what did your doctor say, Tara?
-My doctor said, interestingly enough,
that I work too much.
[ Laughter ]
-The Web's ruled by the under-30 set.
In '94, 30-year-old Jeff Bezos
creates Amazon out of his garage.
The same year, Yahoo!, a searchable Web directory,
is launched by 20-somethings Jerry Yang and David Filo.
-Yahoo! had an exclamation point at the end of its name.
Like, it was Yahoo-exclamation-point.
Like, that was the way you had to print it in the newspaper.
So this playfulness with the frontmen...
Kind of of these young, geeky types
that clearly weren't the popular jocks in high school.
-We are trying to get him into long pants.
-[ Laughs ]
-And I have threatened I don't know how many times...
-Marc represented sort of the "this is what's coming."
You know, it's not this polished, you know,
suit-and-tie kind of thing.
-Andreessen's rise from geeky undergraduate to tech rock star
is whispered about in Silicon Valley.
But his story goes mainstream
when he lands the cover of "Time" magazine.
-A year into Netscape,
"Time" magazine saw how exciting all of this was
and how perfect of a face Marc Andreessen was.
Young and nerdy, perfect for the moment.
So they came up with this idea of putting him on a throne,
kind of looking like a guy who just came out of college.
[ Camera shutter clicks ]
And he had no shoes on.
-And everybody gets focused on his toenails.
"Why isn't this kid clipping his toenails?"
And I'm like, "Why are people looking at his feet?" [ Laughs ]
-He was evidently the first person to appear on a cover
of "Time" magazine with bare feet.
-Netscape and its shoeless co-founder
helps to redefine the image of an American success story.
Sales double every few months,
and Netscape grows to control 80 percent
of the browser market.
But Jim Clark, the adult in the room,
sees problems on the horizon.
-We were making money, which was good,
but we weren't... certainly not profitable.
So Jim was very concerned about, "Let's grow fast."
We have... you know, speed was what we had on our side.
Don't do things 100 percent. Do them 80 percent.
Get them out there.
Get people onboard with us,
and try to outrun Microsoft.
Microsoft was a behemoth at the time.
-20-year-old Microsoft rules the personal-computer market.
But its founder, Bill Gates,
is slow to see the potential of the Internet,
even dismissing it as a fad to Tom Brokaw in 1994.
-A lot of people just getting onto the Internet because they
feel that they have to get onto the playing field, so to speak.
-Well, it's very hip to be on the Internet right now.
-But just a year later, Gates realizes the 'net is no fad.
Microsoft begins developing Internet Explorer,
a browser to compete with Navigator.
Netscape sees a war coming...
One that will require more money to wage.
-We were a young company. We needed the cash infusion.
So the conversation started to turn to,
you know, "Should we go public?"
-Going public allows a company to raise capital quickly.
And that's just what Netscape needs to compete with Microsoft.
In the summer of 95, this young company launches an IPO,
an initial public offering, to sell shares to investors.
-We decided it really was to the advantage of...
To seize the moment,
just seize the moment and go public,
even though we'd only been in business
not even a year and a half.
-At 11:00 a.m. this morning, Netscape stock went public
and Wall Street went bonkers.
-Netscape went IPO August 9, 1995.
Also known as the day Jerry Garcia died.
Whether or not he died undiscussed
is a discussion for the philosophers.
-Initially offered at a price of $28 a share,
Netscape shot up to $72 within minutes.
-Netscape stock price explodes.
Investors are anxious to own a piece of the company
that is bringing the Internet to the world.
And everyone with stock in the company,
especially its founders and employees,
is poised to get rich.
-In a room that was full of people
that I considered my peers, all of a sudden, you know,
the eyes started getting bigger as the number of zeros
in those calculations started happening.
And all of a sudden, on paper,
I was surrounded by Internet millionaires.
Nobody was working.
We were running around being crazy, drinking champagne.
-When trading closes for the day,
Netscape is valued at $2.2 billion.
It's the best opening day for a stock in Wall Street history.
And Netscape's executives are multi-multi-millionaires.
-No stock had ever behaved the way our stock did.
We broke so many records at the time,
for amount above asking price that the shares opened at,
the growth in a day.
Nobody had ever seen anything like it before.
-Early investors who invested in these companies...
The IPO was all they needed to get their payday.
-Netscape's success redefines the letters IPO
into "Internet pays off."
For tech companies,
the road to riches now runs straight down Wall Street
with an oversubscribed public offering.
And for investors, the key is to get in early
on an Internet company
and wait to collect your jackpot.
-People started to say, "How do I get
a piece of this Internet business,
this World Wide Web thing that's going on here?"
-And while some warned it felt like a get-rich-quick scheme,
the new tech-savvy investors countered by asking,
"Who wants to get rich slow?"
-People were buying boats and cars, vacation homes.
-By mid-decade, the U.S. stock market
is reaching historic highs,
but browser company Netscape's hugely successful IPO in '95
shifts the attention of America's best and brightest
away from careers in finance and out west to Silicon Valley,
where almost daily, an Internet company
is launched to capitalize on the World Wide Web.
-People were graduating from business school
and coming out to the Valley to work in a startup
or start a startup of their own.
-There were 20,000 new college graduates
that showed up every year in the Bay Area.
And you would go to bars and there were, you know,
tons of people... Young people your age
who were all working at Internet startups.
-If you went out into Silicon Valley,
you saw venture capitalists everywhere,
meeting with young guys...
mainly guys... Pitching crazy ideas.
Sometimes pitching, not-so-crazy ideas,
but many of them were kind of outlandish ideas.
-But as long as the idea ended in "dot com,"
it was likely to get funded.
-You have Kozmo.com with bicycle couriers
who were delivering a pint of Ben & Jerry's
and a Blockbuster video to your door.
-I think I'll go get a video and some chocolate ice cream.
-You're gonna go out for that?!
Kozmo.com has videos and ice cream.
-And decades before Bitcoin, flooz.com tries to create
an online digital currency...
One you can trust because, well, Whoopi Goldberg tells you to.
-It's just like money. You send it by e-mail.
They spend it at some of the Web's coolest stores.
And you come out hip [Snaps fingers] and smart.
-There was Webvan, which did grocery delivery.
Hello, Instacart, you know? Same thing 20 years earlier.
Maybe they were ahead of their time,
but they were building the airplane while in flight.
Everything was moving so fast.
-And if none of these new wonders of the World Wide Web
has answers to life's mysteries,
Razorfish.com is there with its promise
to find solutions to hard problems.
-Maybe it's indiscreet of me to ask how much you're worth,
but how much are you worth?
-I don't know. That may be indiscreet of you to ask.
Um, somewhere around $180 million.
-That was the kind of crazy that fueled people to believe
that you could do anything and get millions.
-This was hubris... Flying too close to the sun.
It was just stupid money chasing after stupid things.
-As stock prices for dot-com companies rise,
so do the number of extravagant dot-com parties.
-People were buying new cars.
People were buying boats, vacation homes in Lake Tahoe.
But the parties... boy,
everybody wanted to get invites to the best parties.
-The Razorfish guys threw a legendary...
And not in a good way...
Belly-dancer party where drag queens served
White Castle burgers to 2,000 guests.
-I believe it became more of a competition
to throw the best party
than it did to create the best product.
-Rents and house prices rise, and Silicon Valley parking lots
fill up with expensive and flashy cars.
-All of a sudden, a lot of money started showing up.
There was a Ferrari dealership
that was not too far away from Netscape.
I don't know that I personally knew anyone
who bought a Ferrari.
I probably would have mocked them.
But it was there, and it was there because they had buyers.
A lot of these companies are traded on the Nasdaq exchange,
which just starts going hockey stick.
Extraordinary numbers.
And getting reported in the business press,
you know, story after story after story,
the average reader is like, "Oh, my gosh, what's going on,
and how do I get a piece of it?"
-Enter CNBC, who, early on, becomes the go-to cable network
for Americans looking to get in on the dot-com action.
Future Fox News mastermind Roger Ailes
transforms the almost-forgotten network...
-Biotech stocks, which looked good yesterday, are down.
- into a channel where financial news
is reported in the breathy, action-packed style
previously reserved for sports reporting.
-CNBC turns buying and selling stocks, or profiling companies,
into something like watching ESPN and seeing sports teams.
-The audience responds to the insider style of reporting,
often live from the floor of the New York Stock Exchange.
-It's a pretty addictive thing when you see other people
making so much money.
-The constant stock ticker and all of this information was...
Usually, only Wall Street brokers had access to.
-In the past, trading stocks
was a relatively expensive proposition
that required working through old, established brokerage firms
who preferred old, established money.
And well-known firms like EF Hutton were happy to help.
-What is your broker saying?
-Well, my broker's EF Hutton, and Hutton says...
-When EF Hutton talks, people listen.
-But all that changes in the '90s
with what's termed "the digital disruption."
Discount brokerage services like E-Trade and Ameritrade
start advertising their services.
- Let's buy 100 shares. - All right, click it in there.
- Okay. - How about 500?
- 100, Stewart. - [ Imitates chicken clucking ]
-Now anyone with a little dough can join the stock-buying craze.
And while investors no longer need expensive brokers
to buy stocks,
they are drawn to free professional advice.
-Analysts are brought on to CNBC.
They are... you know, suddenly become celebrities.
-CNBC regularly features Internet stock analysts
like Henry Blodget and Mary Meeker,
who push certain companies and downplay others.
-What people didn't realize is they're coming on and they're
pumping up stocks that their companies have investments in.
They have a stake in what they're selling.
When you have someone who's a really telegenic young analyst
like Henry Blodget on CNBC saying,
"Oh, yeah, this is this company, this is why it's great,
this is why I rated a buy," you're like, "I'm gonna go
on my E-Trade account and I'm gonna buy that.
That makes a lot of sense."
And, you know, people made money that way.
-As newly formed digital companies go public
and celebrate as their stock prices soar,
Netscape... that company that got the party started...
Finds itself being targeted
by the most powerful corporation in tech...
Microsoft.
-Netscape was, of course,
one of Microsoft's software developers,
and we were invited up to their campus,
as all other software companies were,
to show what we were developing on Windows 95.
I remember one of my employees called me.
She said, "Rosanne, you're not gonna believe
who's hanging around at our booth.
Bill Gates... he just is staring at our browser.
He just won't leave." He was tuning in.
They wanted to create something just like this.
-And they did.
In 1995, Microsoft launches the Internet Explorer browser
and includes it with every copy of its Windows operating system.
Netscape discovers few are willing to buy their browser
when they get Microsoft's for free.
-Once Internet Explorer started to become the de facto
on every new computer that was purchased
that had the Windows operating system,
you know, the market share just plummeted quickly.
-This was the way Microsoft had learned
to kill software companies.
-Netscape sues, and Microsoft will also face antitrust charges
for using the power of Windows
to slam shut other software companies.
-That whole process did end up eventually causing
a judgement against Microsoft,
but it really was too little, too late
and certainly too late for Netscape.
-As of 1:30 this morning...
-[ Woman sobs ]
- I concluded negotiations and agreed
to sell our company to AOL.
-Congratulations, Skippy. You've got mail.
-It was a very sad day with my beloved colleagues
who had put their heart and soul into this company
and really believed in it.
-The quote that came out of this article was,
"Netscape lived fast, died young,
and left a tired corpse."
-In four short years, Netscape goes
from Internet trailblazer to Microsoft roadkill.
It left behind an Internet
with seemingly unlimited commercial potential,
until one company proves there are boundaries.
Crossing those boundaries can have
devastating financial consequences.
-Part of the story of the dot-com boom
is many people lost their fortunes.
-In the late '90s, a company will launch
whose name becomes a shorthand for the excess
and greed that dooms the decade of the dot-coms.
-It is not about the fame
or the success or anything like that.
It's just about the animals, you know,
and, uh, are you getting the whole thing?
That company is Pets.com.
But in 1998, Pets.com is simply one of the first
online retailers to sell pet supplies to Americans.
Its CEO, Julie Wainwright, prepares to face competition
from both brick-and-mortar pet stores
and other Web entrepreneurs hoping to cash in
on the online pet market.
Wainwright needs to build out Pets.com
as fast as she can, no matter the cost.
-You know, that's a rule of Silicon Valley...
Elbow everyone out of the way so you can be first to market
and you can dominate the market and be the market.
-The office was in a garage in the south of Market,
which is where all the auto-repair shops were.
I'm Oscar Yuan.
I was employee number 30-something at Pets.com.
Everyone brought their dogs and their cats,
and so right there, right from the beginning,
you knew it was different.
But what was really unique was just the energy.
There was a buzz.
They were hiring me for an assistant marketing manager.
The business itself was secondary.
I was getting into what everyone called this gold rush.
The Internet... It was what was happening.
You didn't want to be left out.
-Early on, Pets.com gets a boost
when one of the Web's most successful pioneers
decides to put his own money into the company.
-One of the major investors was Jeff Bezos.
Even back then, Amazon, even though they only sold books,
was kind of seen as the forefront of e-commerce.
And so the investment from Jeff was exciting.
He came to the office, and he went around talking to everyone
and asking what we were doing.
And a lot of us joined a little bit on... on faith,
so every little nugget that you had
that gave you faith that we were doing the right thing
was a huge confidence booster.
-In fact, Amazon is already worth a staggering $30 billion.
Bezos, always looking to expand his piece of online commerce,
buys a 50-percent stake in Pets.com,
now locked in a three-way competition to capture
the online piece of the $23 billion pet-products market.
-Discover paradise at Petopia.com.
[ Dog barks ] The Internet Pet Paradise.
-There were three big players.
There was Petopia, Pets.com, and then there was PetSmart.
-The online competition for the pet space
was incredibly cutthroat.
My roommate from New York also got a job,
and it was a competing pet-food Web site.
She said, "But now, if you work at Pets.com,
we can't be friends anymore."
She goes, "You have no idea what it's like
in the dot-com world."
-We were determined to be the number-one...
The winner in the pet category.
We felt like we were transforming the economy, right?
We were giving people access to a huge number of products
that they weren't able to access before,
transforming how commerce works.
-But buying products online is not something people
naturally think about doing.
-People needed time to really get the idea that,
"Oh, I can buy anything and have it delivered to me."
Like, that whole notion was still a little bit like,
"Really? I'm gonna my credit card on the Internet?"
-To help change that, Pets.com hires ad agency Chiat/Day.
-Chiat/Day was
one of the hottest agencies in the '80s and '90s,
and it began in the '80s, certainly,
with the iconic 1984 Apple Super Bowl spot...
The dystopian sort of future.
-Aah!
-We shall prevail.
-They also did the "Think Different" campaign
for Apple in the mid-'90s.
And then there was Taco Bell with the Chihuahua.
Chiat was known at the time for taking brands
from being brands to being a part of culture.
I'm Scott Duchon.
I was a copywriter at Chiat/Day many moons ago,
and I am one of the creators of the Pets.com sock puppet.
Sorry.
-I'm gonna free the socks.
- You're welcome. - [ Whistling ]
-Sorry?
-Run! I got you! Fly away from here! Go!
- "Why a sock puppet?" is a question I've asked myself
for 20 years now.
No. [ Laughs ]
-Pets.com. executives love the idea,
and a mascot is born.
-It's Pets.com Sock Puppet.
- [ Laughs ] - Oh.
-But you can call me Pets.com Sock Puppet.
-Michael Ian Black, an improv artist
best known for his early '90s sketch-comedy series
"The State" on MTV,
is hired as the voice and hand of the Pets.com sock puppet.
-This is the happiest day of my life!
-This improv approach was really important to us
as far as the entire tonality of the campaign,
because pets are not actors.
I don't know if you know this, but they're not.
And so you need somebody who could just go with the flow
of... of dogs starting to do weird shit.
-Oh, yeah. Oh, this is my kind of party.
-I'm a professional happy puppet thing.
-It was like the puppet was created for Michael.
He just knew what to do with that weird sock.
-Puppets make good money, man!
-I'm Melissa Menta, and I'm a puppet publicist.
The process of Pets.com hiring me was very quick.
They saw on my resume that I had the Jim Henson company.
They thought, "Oh, my God, this is the perfect match."
And I had the job.
-Today, I'm overseeing some deliveries for Pets.com,
purely in an advisory role.
-The first Pets.com commercial is filmed
during the summer of 1999.
-And we were packed really tightly in this van.
And Michael just started throwing jabs at the driver.
-I like your shorts. You're a good-looking fella.
-The driver's reactions are perfectly dry.
And [Laughs] Michael Ian Black is just
pretending like he knows pets at different homes.
-I know the guy who lives in that house.
He's got a snake, and he's got an iguana.
He was thinking about getting a cockatoo for a while,
but I kind of talked him out of it.
-We just rode around, like, holding our laughter in
so that we didn't ruin the takes.
-But he... he went ahead. He got the cockatoo.
And I was wrong, man, 'cause they get along great.
It's like the Brady Bunch with snakes, iguanas, and cockatoos.
-When we came back, the van opens,
and we come off, we're like, "We've got it. It's amazing."
-Did you get all these things at Pets.com?
Oh, wow, he's got a stuffed thing.
I love stuffed things.
Come on, I see the delivery for the parakeet.
Let me go surprise him.
-Pets.com spends a then-shocking $20 million
for a marketing campaign that soon transforms the sock puppet
into a TV celebrity.
-Come on, jump! Jump! Whoo-hoo!
Got it!
-We put out the ads, and suddenly,
you start getting people chatting about it.
In today's terms, it would be called going viral.
-And now Al and Katie, here's one pooch who is a VIP.
That's one very important pet.
Al, this is your favorite television commercial.
-Macy's actually reached out to Pets.com and said,
"We want you to be in the parade," right?
Usually, it's a huge fight to get into the Macy's Day Parade.
-Furnished by Pets.com.
You may have seen this sock puppet on television.
-Look, he's got a stuffed thing! "I love stuffed things."
-Everybody at Pets.com was glued to their television.
And I can't help but think,
"I hope those people at Petopia and PetSmart are jealous."
-Then we did a holiday campaign.
-What is it? I can't wait, I can't wait, I can't wait.
What is it, iguana? [ Dog growling ]
Hey, Max, you're gonna give me a concussion.
Uh-oh, mistletoe! Who wants to kiss a puppet?
-It was not just a fun, you know, flash in the pan.
We were actually seeing the results
of what was happening... You're seeing site traffic,
which is the huge metrics that we were looking at.
-Soon, the sock puppet will deliver his message
about Pets.com in front of television's biggest audience.
-If you're trying to win in a competition,
the best way to do that is to get in front of the millions
and millions of people who watch the Super Bowl every year.
-There's no bigger stage in the world of traditional marketing
than the Super Bowl.
-The NFL's Super Bowl will also end up being
the big game for dot-coms...
A "push all your chips into the pot" moment
to get noticed, scare off competitors,
and lock in your market dominance.
And like any high-stakes game,
there will be winners and losers.
-For companies that can afford it,
advertising during the Super Bowl is an unrivaled
opportunity for your brand to get noticed.
-Every dot-com was buying up the media space
to be on the Super Bowl.
-And that reached its peak in 2000,
along with the greatest show on turf...
St. Louis Rams beating the Tennessee Titans
and Christina Aguilera and Enrique Iglesias
performing at the half-time show.
The 88 million viewers were bombarded
with an almost endless series of dot-com advertising.
-I think there were 17 different dot-com companies that bought
ads at, you know, millions and millions of dollars apiece.
So it became known as the... The dot-com Super Bowl.
-Internet companies like HotJobs.com and E-Trade each
pony up two million dollars for a 30-second spot.
E-Trade, with its chimp mascot, even calls attention
to the outrageousness of all this dot-com spending.
♪♪
-The 2000 Super Bowl was really a classic example
of tech companies with money run wild.
-This meeting is a real drag.
Y'all should be meeting online with WebEx.
-Even RuPaul makes a commercial appearance shilling for WebEx,
a pre-Zoom Web video-conferencing service.
-The amount of money to do a 30-second spot is so phenomenal
and was even then.
The idea of that being your way of marketing,
your way into popular imagination seems crazy.
-For Pets.com, there's more at stake than selling pet supplies
to football fans.
About to go public, the company needs to sell investors
that the future of pet stores is online.
-For the Super Bowl spot,
we decided to just go back to the simple premise.
You don't have to leave to go to a pet store.
-♪ If you leave me now ♪
♪ You'll take away the biggest part of me ♪
♪ Ooh-ooh-ooh-ooh, no, baby ♪
Please don't go.
-We had a Super Bowl party
watching the ads versus watching the game.
I was working, but I also knew I was winning
because we were getting the most publicity.
-It was top five on the "USA Today" ad meter
for the Super Bowl, so it was a big success.
-The Super Bowl brings an entirely new level
of fame to the Pets.com mascot.
-A couple days after the Super Bowl,
I answered the phone, and it was "Good Morning America."
They said, "We want the Pets.com sock puppet
to come on and do an interview."
And literally, we finished "Good Morning America,"
and my flip-top cellphone, which I had at the time, rang,
and it was Regis and Kathie Lee.
And then it just started snowballing.
-♪ I got you, babe ♪
♪ I got you, babe ♪
-It was just one after the other.
"Nightline" and Charlie Gibson and Diane Sawyer.
-Oh, hey, Charlie, Diane.
I'm here at a big Oscar party in Hollywood, California.
Now, I wasn't exactly invited.
And technically, I'm not supposed to be here,
but I'm gonna try to interview
as many celebrities about their favorite movies...
-We did an Oscar party at the Beverly Hills Hotel.
And we were just walking around and talking to celebrities.
-Are you flirting with me, Anna Nicole Smith?
-Yes, I am.
- How you doing? - I'm doing good.
How you doing? - I'm doing good. How you doing?
-Hi.
That was the weirdest moment of my entire life.
-It was incredible.
-The sock puppet might be hobnobbing with Hollywood,
but it's not translating into profits.
Pets.com is spending four times
as much as they earn on marketing.
-We were spending a lot of money on advertising on our team.
We moved to new offices.
Some of the traditional metrics that we had always measured...
You know, revenue, sales, profit
were almost secondary at the time,
which is a little bit counterintuitive.
-Counterintuitive is '90s speak for flawed business strategy.
Early 2000 visitors to the Pets.com Web site are rising,
but revenues are falling.
So the company tries another counterintuitive idea...
Free shipping.
-The free delivery started to raise a little bit
more of a question for... for some of us,
like, "How do you deliver 60 pounds of dog food for free?"
-Pets.com hadn't quite figured out how to ship
the way that we just take for granted today,
that you can order something from Amazon this afternoon
and have it tomorrow morning.
-Profits are an afterthought for 90s dot-coms.
The rules are grow fast,
sell products at a loss to gain market share,
and spend whatever it takes on advertising
and brand awareness to crowd out competitors.
-That certainly was the rule that Pets.com
was trying to follow... Was following that playbook.
Look, it makes sense if you're trying to convince
a big consumer market of pet owners
to buy things on the Internet that they used to buy in person,
if you're trying to get ahead of your competition fast.
-Then Pets.com makes a fatal miscalculation.
-The public was not as excited about it as we were.
-The millennium had come and gone,
and although things like flannel shirts and Beanie Babies
didn't survive the '90s, the Internet was here to stay.
For investors in Pets.com,
the aughts is their chance to finally cash in on the
now well-known e-commerce site.
-As the market gets higher and higher and higher and higher,
there was a lot of pressure for investors to say,
"Oh, no, no, no, I'm not gonna give you
another round of funding.
You should go public 'cause I want my payday,
'cause I'm gonna make a lot of money on this."
-Investors may want a payday, but for Pets.com,
its huge advertising expenses and losses from free shipping
leaves it $62 million in debt.
So it needs to go public in order to survive.
-Super Bowl's in end of January, early February.
Pets.com goes public only a few weeks later.
And everyone's like, "Okay,
this is gonna be another rocket ship."
-Anyone with stocks in Pets.com,
from the executives to assistants,
prepare to become overnight millionaires.
-It was exciting to turn on the news
and actually hear analysts
talk about your company and what you're doing.
And you get swept up in the belief
that you're gonna transform the economy.
-On February 11, 2000,
Pets.com debuts on the stock exchange,
hoping to raise $100 million in their initial stock sale.
-All the senior executives had gone to New York for the IPO,
and the rest of us were... Were in the office.
We were all checking the stock price.
We see the stock price creep up,
and there's a good amount of energy.
And then we see it kind of creep down.
It settles at 11, and it sticks at 11
for the rest of the day.
-It's a disappointing price, but the IPO still raises
$82 million for the company.
CEO Julie Wainwright
tells her staff it's back to business as usual.
-The day after the IPO, we all went back to work again.
We continued as we were doing.
There was so much commitment to what we were building
and had built that we almost thought of it
as a small road bump
in the grand scheme of... Of where we were headed.
-Just like every other dot-com at the time,
it almost didn't matter if it was gonna succeed.
It was still a future bet that made it a successful opening.
And so you couldn't really tell up from down, I think.
-But dot-com frenzy is on the decline.
The stock market has woken up to the reality
that many of these companies
are losing much more money than they're making.
-The Internet may produce something else...
The next big wave of bankruptcies.
-The downslide has wiped $16 billion.
-And a lot of once-promising companies
are coming to the end of the line.
-In March 2000, the Nasdaq hits its high peak
and starts going down,
and investors start getting cold feet.
And of course, people get really excited as a group.
And then they're like, "Wait a minute,
someone's starting to sell Amazon.
Now I should sell it, too," and da-da-da-da-da-da-da.
For all of the growth of the Internet,
the market itself and the valuations
were outpacing where it was at.
-At least 135 dot-coms went belly-up.
-They are roadkill on the information superhighway,
and the carnage is just beginning.
-CEO Julie Wainwright
needs a way to weather the financial storm.
And the sock puppet seems to be her best bet.
-We ventured into the world of character licensing,
which can be very lucrative, so we signed a toy licensee
who manufactured a Pets.com sock puppet
that wasn't as cool as the real ones,
but they were pretty cool.
-Then they started to get savvy with the puppet... dog bowls
and lots of other things that had the puppet's likeness on it,
and they owned that.
-So, when Wainwright learns of another pooch
besmirching the sock puppet's good name in the media,
she's quick to pick a dogfight.
-This is what I hear of Pets.com.
I hear your stock's going down faster than me on a Pekingese.
[ Laughter ]
-Triumph the Insult Comic Dog,
the creation of comedian Robert Smigel,
is a staple on "Late Night with Conan O'Brien."
His act includes making fun of other dogs,
including Pets.com's beloved mascot.
To stop the alleged damage, Pets.com slaps Smigel
with a $20 million defamation lawsuit,
and Conan responds on the air.
-It's literally a sock puppet suing a sock puppet.
-Well...
-A sock puppet suing a rubber puppet.
And why can't those two kinds of puppets learn to get along?
-Take a look at this lawsuit!
Now I know why human beings wipe their ass!
[ Laughter and applause ]
I just threw away my arm, too.
-There was this fear that Triumph was gonna ruin
the Pets.com brand because of all of his insults
and really do some damage to our, um, brand integrity.
-Well, listen, I like the press to check it out.
-But the lawsuit backfires, and Pets.com
ends up on the wrong end of the publicity stick.
To avoid more bad press,
puppet publicist Melissa Menta goes to work.
-I kept saying, "It's got to be puppet versus puppet,
not puppet versus evil dot-com
that's trying to take over the world."
The Pets.com sock puppet should have a press conference
and discuss why he is not a knock-off of Triumph.
We went to New York, and we hosted a press conference.
The sock puppet said he was innocent
because he was an ancestor of Knickers from the Mayflower.
And the next day, the cover of the...
I believe it was the "New York Daily News"...
Had the puppet on the front cover,
and the words were, "I am innocent."
And suddenly, the narrative changed,
and people weren't bashing Pets.com as much
after that press conference.
-But will saving its brand integrity be enough
to help the battered dot-com survive?
-In late 2000, Pets.com's total debt
is a staggering $147 million.
Even 50-percent shareholder Jeff Bezos,
already worth $4.7 billion,
isn't willing to chase good money after bad.
So Pets.com, once the poster child
for a thriving dot-com,
announces they're shutting down.
-What I notice amongst the failures is they think
if they just throw the words dot-com at people,
they will come, and they won't come.
-There's a cascading line of companies waiting to go under,
unfortunately.
-I have no idea what I'm gonna do.
-The message is clear.
In its two years of its existence, Pets.com,
like many other dot-coms,
had spent their money frivolously
on over-the-top advertising and free shipping to customers.
But for Oscar and his coworkers,
their job was about so much more.
-We believed we were transforming commerce.
We loved our coworkers.
It was something that we had dedicated so much time
and energy and commitment to, and so much belief.
-But it wasn't enough to keep Pets.com afloat.
-The last day was hard.
We... We showed up for work, and there were news cameras
and the news teams in front,
and they wanted to talk to all of us, but we...
We just wanted to get into the office,
kind of wrap up our things, say goodbye.
-I just remember being devastated.
I just remember being just so sad
and definitely crying a lot.
-We did go to someone's house after that,
and we held a vigil for the sock puppet.
This creature made of socks and a button...
In the end, we almost felt that he was human, he was real.
He is symbolic of the team that put all the work into it
and, also, of course,
the era that we all lived through together.
-It was like a death. It was.
It was like a death of a company
and a group of people that I love so much.
And I just didn't want it to end.
-The good times were followed, short order, by dark times.
You suddenly had people getting, you know, laid off en masse,
companies shuttering... All these cool office spaces
in south of Market in San Francisco
that were just empty.
-Pets.com was the canary in the dot-com coal mine.
By the start of the millennium, 100 million individual investors
across the country
had lost $5 trillion in the stock market.
-The amount of money lost was phenomenal.
The people who really got hurt in the dot-com bust
were mom-and-pop investors...
People who had their money in tech stocks
that they believed were gonna be their retirement.
-People had to move back in with their parents...
Just, you know, were so devastated or frustrated,
they just got out of the industry altogether.
-In 2003, CNBC media darling analyst Henry Blodget
settles fraud charges related to several companies
he analyzed during the late '90s.
He's fined $4 million and banned from the industry.
Julie Wainwright is the CEO and founder
of the successful luxury consignment site The RealReal.
And Pets.com's star investor, Jeff Bezos,
can afford a vanity trip to space.
But before the sock puppet is put to bed,
one final insult would strike deep when E-Trade,
one of the last dot-coms standing,
takes aim at Pets.com's spectacular rise and fall
in a 2001 Super Bowl ad.
-There was the E-Trade ad with the... the chimp on the horse,
um, looking through this desert
of other failed Internet companies,
and kind of the last one that he comes upon is Pets.com.
[ Crashing ]
[ Horse neighs ]
There is a little bit of indignance
that they would use you and the work that you had done,
but at the same time, there's a little bit of pride.
We're the finale of this ad, right?
We're the one that people remember.
-Hey, the sock puppet was the best thing
that came out of the '90s, let's just face it.
[ Laughs ]
-What sort of message do you have for all of us?
-Don't invest in dot-coms.