Worlds Dot Com?

By Shamus Posted Monday Dec 30, 2019

Filed under: Personal 46 comments

It seems some folks are taking an interest in my old adventures. Someone left the following comment over the weekend:

Hey Shamus, sorry for the unrelated comment but I can’t find your twitter anywhere and I’m not sure where else to put this.

I seem to recall in some of your older posts you mentioned that at one point in the late 90s you worked on an MMO called Worlds Online. I recently saw this video here about some creepy things going in that game, which is apparently still online. Just thought you might find it interesting.

The linked video is this one:


Link (YouTube)

That video looks to be an internet spook story about there being some cult operating within the inexplicably still-operational Worlds.com MMO. I have nothing to say about the cult stuff, and I haven’t even watched the entire video. I skipped through and saw it saying something about pedophiles, which – shit man. That’s scary stuff and I can’t even think about that topic without getting really upset. For reasons of mental health, I can’t watch the video and I’m not going to discuss the topic.

But for the curious, I want to make it clear that I never had anything to do with Worlds.Com. I never used the software, I was never employed by the company, and I only heard about those people through second-hand gossip.  I worked for a competing product called Activeworlds. Actually, I worked on AlphaWorld. Actually, I was a cub-contractor. Actually, it’s… complicated.

This is messy, so let’s rewind to the early 90s.

At the time, Worlds Dot Com was just called “WORLDS”. Maybe the software was sometimes called “Worlds Online”. It’s hard to remember. To my knowledge, the “Dot Com” branding didn’t come until later. WORLDS was run by the company Worlds Inc.

People call WORLDS an MMO, but I think it’s more accurate to say it was a chat room. Sure, you had 3D characters in a shared space, but to my knowledge there was never any gameplay. You just walked around and talked to people. Each chat room was a different world with its own scenery. It’s important to note that the word “massive” in “massively multiplayer” is probably a bit misleading here. These early virtual chat worlds were incredibly small by modern standards. The typical population for a particular world – a single chat room – would have been in the dozens.

Worlds Inc. actually owned two of these quasi-MMO chat programs. WORLDS was the original. In 1994 it was followed by AlphaWorld.

I know all these names are confusingly similar, so just to make it as clear as possible: Worlds Incorporated is the company, which owns two different chat programs, WORLDS and AlphaWorld. Got it? I hope so, because it gets more confusing from here.

Remember the #1 secret to success: Be in the right place at the right time. Afterward, you can write a book about how you got rich by being in the right place at the right time.
Remember the #1 secret to success: Be in the right place at the right time. Afterward, you can write a book about how you got rich by being in the right place at the right time.

In my book, Worlds Inc.  is one of the great pioneers of the disastrous Dot-Com business model. I’ve described it before, but the short version of it is this:

In the early 90s, lots of people recognized that this internet thing was a big deal. This was the future. History was about to create the next Henry Ford or Walt Disney. Someone was going to position themselves in just the right spot to become a legendary billionaire. Nobody wanted to end up being remembered as the idiot who claimed that automobiles would never catch on or that commercial air travel was a pipe dream. So you end up with lots of people trying to found companies, and even more people trying to invest in them. It was a gold rush.

The business model would go like this:

  1. Imagine some good or service that could somehow, someday be delivered over the internet. Write up a business plan describing how this theoretical and unproven market might eventually work and how you could make money at it.
  2. Gather up a huge pile of venture capital from hopeful investors.
  3. Get some fancy prestige office space, high-end office furnishings, and top-of-the-line equipment.
  4. Hire a bunch of people. You’re not sure what you’ll need, so just hire a little of everything. That goes double for management.
  5. Stack the board with people you trust. (Which has the side-effect of stacking the leadership with your friends and family.)
  6. Now that you have a huge company that’s burning through cash at a terrifying rate, hire a few kids fresh out of college and ask them to design the software you’ll need to make this all work.
  7. Now survive long enough for your target audience to show up so you can begin making money.

That last step is the tricky one. Pets.com is the archetypal example of a company with an insane burn rate and no coherent plan for short-term survival. There were a lot of these companies by the late 90s. Hundreds of them. A lot of money vanished very quickly. While a few companies did indeed take off, for the most part everyone lost their fortunes on mismanaged companies that never had a prayer. This was the Dot-Com bubble in a nutshell.

As far as I can tell, Worlds Inc. was the first of the Dot-Coms. Maybe there were a few earlier disasters that escaped my notice, but Worlds Inc. is the first one I knew about. Worlds Inc. was a full half a decade ahead of the curve. They were going broke and flaming out long before any of the famous web companies ever took off.

WORLDS was already up and running when Worlds Inc. decided to spin up a new product that would directly compete with the old one. WORLDS was chat only, while the design for AlphaWorld allowed for users to build using prefab pieces. Imagine the Fallout 4 building interface mixed with 1994 era graphics and you get the idea.

The company needed someone to design those prefab building pieces. That was my job.

In 1994, I was working on AlphaWorld as a sub-contractor. Worlds Inc. hired my boss, and my boss hired me.

Here it is in 1997. I don't have any screenshots from the 1994-1995 era I'm talking about here.
Here it is in 1997. I don't have any screenshots from the 1994-1995 era I'm talking about here.

We used to joke that Worlds Inc. had more executives than employees, but then we started to suspect that this wasn’t actually a joke. It was apparently true. We heard the names of various vice presidents and managers and marketing directors and lawyers, but almost never any employees. It was weird.

Why would Worlds Inc. spin up a new project to compete with the old? My guess is that they were behaving like a gambler coming to the end of their money. You’ve already mortgaged the house and the money is nearly gone. Your only hope is to start taking the really long bets and pray you hit it big enough to get back in the gameJust to be clear, your ACTUAL only hope is to walk away and save whatever you’ve got left. But I’m describing the thinking of a gambler / entrepreneur who has already lost too much.. The idea was that AlphaWorld would hit it big and the influx of cash would save them.

This is all conjecture on my part, of course. I was getting all my corporate gossip third-hand. I can’t prove anything I’m claiming about the company.

The Plan

If you want to win big, then you need to take repeated, enormous, ill-advised, unsustainable chances.
If you want to win big, then you need to take repeated, enormous, ill-advised, unsustainable chances.

The AlphaWorld business model would go like this:

People could create accounts for free. Worlds Inc would make money by selling virtual real estate. If you wanted a world, you had to pay them based on the size in square meters and the maximum number of concurrent users. The elevator pitch was “The 3D Web”. Like, each world was sort of its own website. In public, the software that allowed you to jump from world to world wasn’t called a “game” or a “client”. It was called the “browser”. The idea was that users would surf from one 3D space to another and companies would need to pay money to Worlds Inc if they wanted to be a part of it.

This is obviously a terrible idea.

The Apache Webserver is a free, open-source, cross-platform piece of software that allows anyone to host a website using public protocols. That’s the magic of the internet.

An AlphaWorld server was a proprietary closed-source server limited to Linux and Windows, which was designed to self-limit both area and user count  according to your license. It was a server that needed to connect to a central authority server to get its license information.

These two things seem similar if you’re an executive and your only understanding of these two things is that they’re both experienced through programs that you run on your Windows 3.1 PC, but the differences under the hood are massive. This plan makes no sense.

Icing on the cake was that these licenses were expensive as hell. I don’t remember the exact prices, but I know they wanted hundreds of dollars a month for servers that could only support a few dozen concurrent users. Worlds Inc was betting everything on this venture. They weren’t looking for something sensible like financial stability or stable growth. By this point, the company needed to win big just to stay in the gameAgain, I was just a 20-something engineer with NO knowledge of the financials. This is all rumor and hearsay..

When the public release of AlphaWorld didn’t suddenly bring in millions of dollars to Worlds Inc, the company lost interest in it. It wasn’t a a gold mine, so it couldn’t save them. In the end, they sold it to our little company for a fraction of its development cost.

Our company re-branded it to Activeworlds. We didn’t have a huge executive structure to support. At our peak the company never had more than 2 officers. Activeworlds was never a smash hit, but it was able to sustain our small company for the next 8 years or so, until Second Life crushed us. We limped along for another 8 years or so after that. I left the company in the late aughts. I’m not sure where things are these days.

I am really surprised to find out that WORLDS is still running. I thought it looked obsolete in 1994, and I never understood what kept it running all these years or how the thing was funded.

I don’t know anything about the cult stuff. That sounds like a mystery for young people to chase. I just want to make it clear that I never worked for the company or even owned a WORLDS account.

So that’s my side of the story.

 

Footnotes:

[1] Just to be clear, your ACTUAL only hope is to walk away and save whatever you’ve got left. But I’m describing the thinking of a gambler / entrepreneur who has already lost too much.

[2] Again, I was just a 20-something engineer with NO knowledge of the financials. This is all rumor and hearsay.



From The Archives:
 

46 thoughts on “Worlds Dot Com?

  1. Kylroy says:

    Honestly, that business model has come back with a vengeance. If anything, a surplus of investor cash in the market has made step 7 last way longer than it has any right to (see Uber).

    1. Zaxares says:

      Something similar is happening now with the next-gen IT revolution, centered around AI, Big Data, and blockchain technology. Lots of people can sense that all of this stuff is going to be the next Internet, but they haven’t yet figured out what’s the final form the technology will take shape in a way that’s financially profitable, so they’re desperately throwing money at everything hoping to strike it lucky.

      For the record, I believe that cryptocurrencies are something that will crash and burn eventually. The currencies themselves hold no intrinsic value, and the way that bitcoins and other such currencies are produced have little to no true influence on the business streams that blockchain technology will one day support. What’s more, the fact that cryptocurrencies are extremely difficult to trace (and tax) means that governments as a whole will likely not be keen to support a financial system that can easily be used to circumvent their legal and fiduciary systems. I foresee blockchain technology getting embedded more deeply in the financial system, and used to safeguard the integrity of things like transaction records, product chains, and data fidelity. But the currencies themselves? They will last only as long as public confidence in them remains, and I think that as soon as there’s a big enough disaster (or a scam where somebody takes all the money and runs) surrounding cryptocurrencies, people are going to drop it like a hot iron.

      1. Richard says:

        None of the “cryptocurrencies” are actually being used as currencies.
        Bitcoin was for a short while, but it isn’t anymore – “mining” (transaction processing) became too expensive by design. The economists I talk to think it’s either a very clever shell game/pyramid scheme, or designed by someone who has no idea how economies work.

        So they’re already long dead as currency – they’re being used as virtual goods for speculation, similar to unregulated stocks.

        This is very obviously a pyramidal bubble that will burst the moment new money stops being pumped in.
        – The crypto bubble is considerably worse than the dot com bubble because there won’t be any useful ideas or IP to come out of it, and more ‘normal people’ will have invested.
        It’s also much longer-lived than dotcom because setting up a new crypto requires almost no expertise, almost zero up-front investment, and nearly all the running costs are borne by the marks.

  2. Kylroy says:

    Also, *Active*worlds was in the news a few years ago for some creepy weirdness on their (apparently still-running) servers:

    https://kotaku.com/youtubers-journey-into-abandoned-mmo-is-creepypasta-mat-1767500088

    1. Kronopath says:

      Yeah, about three years ago a streamer discovered an old, still-running ActiveWorlds server (AW Myths, I think it was called?) and went exploring in it. One of the regulars of that server who was watching the stream then decided to mess with him by logging in and acting spooky. The streamer initially thought it was an NPC.

      He’s got a good highlight video of the incident:

      https://youtu.be/PRgATG6PUA0

      Also interesting is the revisit he did this year, where one of the regulars of that server gave him a guided tour of the things they’d built over the years:

      https://youtu.be/e5quFpLlCh0

      It’s amazing and kind of heartening that it’s still running after all this time. Usually these things get lost to digital dust after a while, taking all the hard work and creativity of people with them. The guide from the revisit video said he’d written literal books based on the role playing they were doing in that server.

      1. Stuart Worthington says:

        Vinesauce! Wonderful streamer, and wonderful stream.

  3. kunedog says:

    Actually, I was a cub-contractor. Actually, it’s… complicated.

    You worked as a furry?

    1. Geebs says:

      I think he made juvenile lions smaller?

      1. Mr. Wolf says:

        No, no. He was just very young, like a cub-scout.

    2. ElementalAlchemist says:

      Well he did say it was complicated.

    3. Sartharina says:

      ON THIS TANGENT: Furries had their own shared social hub world-thing like ActiveWorlds/Second Life in the 90s-aughts. It’s still technically alive, but a shadow of what it was even just 10 years ago. Though instead of being a 3D world, it’s only 2D, and sprite-based.

  4. Mark Webb says:

    I always love reading insight into your history with ActiveWorlds. I could sing praises for AW’s core technology forever, so it’s sad that Second Life had as much of an impact as it did (and it’s sad that Rick and JP didn’t notice it sooner). If only things could’ve gone a little differently.

    I was a citizen of AW (“GSK” / “GameShowKid”) from 2001 through 2016, and worked for AWI as an independent contractor from 2013 to 2016; as far as I know, Rick dissolved AWI sometime within that period and rebooted it as AW3DU, with some kind of educational focus.

    Your name would come up every now and then when I was in AW, and it was always in relation to what many, including myself, refer to as the ‘golden age’ of ActiveWorlds. You and I never knew each other (except maybe in passing), but I do miss those times of seeing you, Mike, JP, Tom, all of you wanting the best for the platform, its community, and the company. As an outsider for so many years, I really wish things could’ve gone differently. ActiveWorlds created so many opportunities for me, and I will always be grateful to all of you for making it happen.

    As far as Worlds is concerned, I’m pretty sure they keep it running for the same reason Rick keeps AW running: the operating cost is nil. Last I heard, AW was running off AWS, I imagine Worlds is probably there too. As for the company, they’ve been making quite a reputation in recent years playing patent troll. It gives me a good chuckle when I see “Worlds Inc” in a headline.

  5. Joshua says:

    The more I work in the corporate world, sometimes hand in hand with top-level executives, the more I’m amazed at how they balance such deep business savvy with such bone-headed decisions.

    1. danielfogli says:

      One might think they don’t actually have a clue and it’s purely random ;-)

  6. Steve C says:

    That youtube channel seemed to be a “conspiracy moral panic” channel. In the same way that there would be a “story” in the 1980s about D&D, there is a “story” about this. Reminds me of a Futurama clip with the TV announcer voice, ‘Maybe the things were used this way in the past! You don’t know! Shut up!’
    I suggest ignoring this as a molehill not worth thinking about.

    1. Tamsin says:

      No, Nexpo is nothing like that. It’s short for “Nightmare Expo” and he dives into internet horror stuff – ARGs, rumors, creepy Youtube channels, all kinds of things like that. He investigates anything that’s got rumors around it, it’s got nothing to do with moral panic or anything, just one of the many Youtube horror hosts for those with a fascination with dark and morbid things, usually fiction.

      1. Steve C says:

        Ok maybe “moral panic” is the wrong term for the channel. However what you describe is what I was also attempting to describe. It’s the same kind of show as this meme. I’m saying Nexpo could be sandwiched between Ghost Hunters and Hunting for Al Capone’s Gold in the same TV block. The topic could be a moral panic, (which this video is) or ARGs, or rumors, or creepy Youtube channels, or how ancient Egyptians hunted vampires. It’s probably dark. It’s probably morbid. It attempts to be disturbing in some way. It always tries to be edgy.
        Thing is it’s just crap. Not worth thinking about seriously.

        1. Lino says:

          What I didn’t like about the video is just how hard it’s trying to milk shock value out of nothing. It spent half an hour trying to say something he could have said in two minutes. In this case, all the video amounted to: “Old MMO. Otherwise normal user occasionally likes to creep people out for giggles. Some people like sharing nudes using the game. This is totally not okay. The owner is a patent troll.”
          BOOM! There you go! Now why did it take him 30 minutes of meandering and setting up hooks that ultimately lead to nowhere?!
          I guess people these days will do anything for views…

    2. BlueHorus says:

      Oh, yes. Seconded.

      Nothing nothing more believable than phrases like ‘according to 4chan’ and apocryphal tales from random internet threads.
      This entire thing comes across as believable as that time a friend of a friend of a friend’s flatmate walked in on a orgy with, like, over 30 people, man, including [insert famous politician from your country here] and a genuine lizard-person! Honest!
      It was in a super normal house near where YOU live!!!!!

      Whever made this video spun 34 minut’es video out of a whole load o’ nothin’.

      …but my main takeaway from this video is outrage at the way the narrator pronounced ‘David Bowie’.
      Goddamn it, it’s Bowie as in ‘bow’ (act of obeisance) or bough (limb of a tree) – not ‘boo’ as in ‘your video is nothing but bullshit conspiracy theory nonsense and hot air! Boooo!’ !
      Ain’t no such person as David Boo-ie!

      1. Syal says:

        I was amazed it took 8 minutes just to get to the starting point. Had to skip ahead, and thank heavens for Adblock. But apparently missed the critical part where they reveal Mr. Bowie’s True Name.

        To sum up for people who didn’t watch it; Nexpo’s conclusion was that there’s no cult and the MMO’s probably still up for patent trolling reasons. So… yeah, whole lot of nothing.

      2. Joshua says:

        Depends upon where you’re from. Here in Texas, it is absolutely pronounced “Boo-ie” by everyone.

        1. BOWIEHorus not BOOieHorus says:

          David Bowie was from the UK and used the pronounciation common here. Which is Bowie. Not Boo-ie.

          ( /pedantics.
          It’s not that big a deal, and he’s dead now anyway*)

          * :-( **

          **…but still, it’s Bowie, not Boo-ie

          1. Zeta Kai says:

            I’ve always heard it in the media as “Boe-ee”, as in a bow and arrow.

        2. tmtvl says:

          Yeah, but that’s for talking about Jim Bowie, not David.

        3. silver Harloe says:

          Oh, no!, If you would simply go (preferably without stubbing your toe) to google and enter “david bowie says his own name” you can find some videO of him saying his own name with some clips from long ago, then you will know. The answer might disappoint you, Though I might make you feel low, I am not your foe, just an average Joe with a small ego.

          1. Syal says:

            Actually less clear than one would think, after you hear him say Major Thumb.

  7. “You already had the one with the bird yesterday. As of today I can too.”

    Online chat conversations from 1997 were weird.

    1. RFS-81 says:

      The German doesn’t look weird to me at all… What I’m getting from it is that the other person kept showing off some trick involving a bird since yesterday, and the speaker learned how to do it today.

      Oh and also, it’s very appropriate that Shamus’s avatar is called Young Shamus!

      1. Sleeping Dragon says:

        Would you believe that until this comment I had a total brainfart and thought he doctored the screenshot to put “young Shamus” over the character’s head? Like, I know that’s his name I’m just so used to always hearing it as “Shamus Young” in my head and I think he does sometimes refer to himself as “young Shamus” in biography posts or when recalling something.

  8. Madoradus says:

    Hey Shamus, I was the guy who posted the comment about this the other day. I hope I didn’t upset you with it or anything, and I definitely wasn’t accusing you of anything, I just thought it was interesting and thought you might want to take a look at it.

    I guess I mixed up Worlds Online/Worlds.com with AlphaWords, ActiveWorlds, and Worldworld. No clue how that could have happened! (Especially since I just vaguely remember reading your article about it at least a few years ago.) )(Come to think of it, does this mean the epidemic of “world” related video games came *before* World of Warcraft?))

    Anyway, at least I’m glad to see you could make an interesting blog post about that, but there’s something about your writing style that, at least I think, could probably make a compelling narrative out of paint drying.

    1. BlueHorus says:

      I mixed up Worlds Online/Worlds.com with AlphaWords, ActiveWorlds, and Worldworld. No clue how that could have happened!

      Well, at least you missed out TotalWorlds, TechWorlds, New Worlds, VirtuaWorld, VirtualWorlds, WorldlyWorld, World of Words, World of Worlds, WorldWind and WhirlyWorldWorldWorld.

      Mind you: don’t go to YiffingWorld….that place is for enthusiasts only.

      9EDIT: I’ve literally written the word ‘World’ so much that it now looks weird to me and appears misspelt to me even when it isn’t.)

      1. Higher_Peanut says:

        World looked weird to me after getting to WorldlyWorld in your comment and now I’m mispronouncing it in my head when I see it. Hopefully it doesn’t last long, language is strange.

      2. Decius says:

        There was World of Worlds and also Worlds of World, World of World, and Worlds of World.

        Welcome the the Wide World of Worlds of Worldses.

        1. Syal says:

          A whirl of Worlds. Or a Whorl of worlds. World of whorls. Whorl of world whirls.

          …I’m getting dizzy.

          1. Decius says:

            World Whirl three.

  9. Paul Spooner says:

    Typo alert “each worlds was” should be singular instead of plural.
    I always thought the “pay for a license to run a 3D webserver” thing was a bit crazy. Glad to hear I’m not the only one.
    Would still be pretty sweet if there was some sort of 3d VR internet protocol.

    1. Groboclown says:

      You mean like VRML? My brother worked with that back in the ’90s and thought it would be the way of the future. He still may be proven right.

      1. Paul Spooner says:

        I always thought VRML was just a shitty 3d file format. I see the acronym now that you point it out though.
        Given web-page responsiveness, writing a low-latency VRML browser seems like it would be pretty challenging.
        Oh man, got some ideas for how a 3D internet could work though… Exciting!

  10. Lino says:

    Very interesting article. I’ve always loved your stories about your experiences in the 90’s. It’s like reading about life in the Wild West (except there’s a lot less shooting and drawing pistols at high noon)!

    By the way, by the end of the video he stops talking about the moral panic stuff (spoiler alert – there is no cult, but there are some people sharing nudes with each other), and he goes into why Worlds.com still exists – apparently the owner is a patent troll who has sued the likes of Blizzard, Second Life and Bungie. You can skip to 29:08 (or just click here) if you’re interested.

  11. rabs says:

    I’ve read a french article about Active Worlds a few month ago https://www.canardpc.com/399/dans-les-mondes-oublies-dactive-worlds (paywalled).
    The buzz around Fujiko in 2016 revived interest in those old online worlds http://cooldown.fr/dossier/hitomi-fujiko-active-worlds/ (another french article cited in reference).

    It still looks like a ghost town or ancient civilization ruins, the journalist explored the abandoned places and read the messages left here and there.
    There was also some nice encounters, usually with old people still attached to this community, environment and creation tools.

  12. Alan says:

    Worlds.com’s website is a fascinating trainwreck. Their home page is eager to share their cutting edge patents issued in… 1996. They purchased a marijuana sales company. All of their “headlines” since 2014 is just links to sites that post any old press release that comes along. As best I can tell, they claim 10 patents, but 9 of them are just “continuations” (late additions to) the 1995 patent, meaning they expired by 2005. They couldn’t even be arsed to pay the maintenance fees on a bunch of them. It appears they’re trying to milk it anyway with some long running lawsuits that I guess must predate the expiration. It’s like they want to be patent trolls, but can’t even manage that.

  13. The Rocketeer says:

    I know you love to work in your patented Terrible Car Analogies, so it’s a shame you can’t do that for the late ’90’s dotcom bubble. Because a car analogy wouldn’t be terrible at all, because the exact same sort of bubble happened with cars!

    Yep, shortly after the automobile revolution around the turn of the 20th century, there were hundreds of car manufacturers in America. Really, hundreds! This was a very short-lived boom followed by a massive bust as these car manufacturers, which were founded everywhere around the states, quickly winnowed to a few names likely familiar to folks today: aside from Ford, of course, there were the Buicks, Studebakers, Oldsmobiles (and REO, after Bob Olds left and couldn’t legally use the name “Olds”), Willys (not “Willy’s,” pronounced like Willis), EMF, Studebaker, Chevrolet, Pierce-Arrow, Duesenberg, King, Cadillac, Lincoln, Dodge, Bentley, Packard, Maxwell, Plymouth, AutoCar, Oakland, Nash… Literally too many to list, even as they rapidly consolidated!

    A lot of that list is redundant, as a lot of these marques would eventually merge with or get bought out by the larger brands as the field continually narrowed. By the mid-late twenties, very few of these companies were still being founded and almost all of them failed; around that time is when new names mostly emerged from the death, mutation, and rebirth of brands (e.g. 1925 reorganization of Maxwell into Chrysler, which established Plymouth) rather than from wholly new brands laying down a foundation somewhere, which by then was the equivalent of your dotcom no-hopers trying the Pets.com model in the early ’00’s.

    Despite what you might suspect, the huge die-off wasn’t really related to the Depression; they were mostly all dead by then! A quick idea of the death rates here, from that list above: 1900-1909, 364 companies closed/absorbed/whatever; 1910’s, 417; 1920’s, 207; 1930’s, 48.

    I’ve got no real point here.

    1. John says:

      My favorite historical boom is the South Seas Bubble and the associated boom in joint stock companies in England during the early 18th century. Joint stock companies had been around in England since the mid 16th century, but shares in the South Seas Company, formed in 1711 to speculate in government debt and trade with Spanish and Portuguese colonies in South America, grew so valuable that there was a frenzy for any and all joint stock companies, no matter what those joint stock companies did. The most infamous of the companies to benefit from the bubble was the company “For carrying-on an undertaking of great advantage but no-one to know what it is,” which even I have a hard time believing that I am not making up but that I have seen mentioned in too many sources for me to have invented it.

      1. BlueHorus says:

        Isn’t the South Seas Company famous / infamous? As I – possibly incorrectly – recall it was founded right at the beginning of LLCs (Limited Liability Companies), and was a complete flop.
        Which resulted in a lack of trust in the concept of LLCs, because they are basically ‘investing in a company, and if you win you get to keep it…but if you lose, you get bailed out (usually by the government).’

        Like John, I do wonder if I’m remembering this right, because that sounds like an insanely stupid thing for any (government) to agree to. I mean, I’d happily gamble if someone ELSE was paying the bill for any losses…

        1. John says:

          The South Seas Company is properly infamous, yes, but it wasn’t one of the first English joint stock companies. The first English joint stock companies were founded in the 1500s, and many English colonial ventures were organized that way. The South Seas Company, as I said, was founded in 1711. Its supposed purpose was trade with South America–hence the name–but its real purpose was to finance the English budget deficit, which is why, unlike many joint stock companies, it had a royal charter. (This is also how the Bank of England got started.) The company, its officers, and its shareholders, which included many aristocrats and members of Parliament, spent the next decade buying debt, bribing government officials, and exaggerating the value of the company. The South Seas and joint stock bubble peaked in 1720, when, partly at the behest of the South Seas Company, Parliament passed a law forbidding anyone to form a joint stock company without royal permission. The law also gave the South Seas Company an official monopoly on trade with South America.

          The problem with the South Seas Company is that its business plan–trade with South America–never made any sense. Trade with South America was impossible, not least because England was fighting Spain in the War of Spanish Succession. Even without the war, the colonial powers of the time–England included–were generally reluctant to permit trade between their colonies and other nations. The real value of the company was therefore just the value of the government debt it held, which could not justify its inflated share prices, and the bubble popped in late 1720. A lot of people went bankrupt when their shares suddenly became worthless.

          There was a Parliamentary inquiry following the bust and some company officers were imprisoned. To be fair, there had been a Parliamentary inquiry before the bust as well, but it had been hijacked and then squashed by members of Parliament who owned stock in the company or had been bribed. In the end, nobody was bailed out, not in the modern sense–there were many, many bankruptcies–but a lot of people who probably should have been prosecuted for fraud or corruption weren’t because of their social standing or because of the embarrassment it would have caused the government.

  14. Taxi says:

    I wouldn’t say it was a terrible idea. For one indeed Second life had really taken off in mid-2000 and is still running strong for some communities.

    More importantly, who even still uses regular internet at this point? Today if you want to do the internet thing, you make use of Twitter, Gmail, Facebook, Instagram, YouTube and if you wanna go big, you get some iOS snd Android apps made. Everything proprietary. Even if you do have a “regular” web site, you stuff it to the brink with all sorts of plugins and host it on Amazon.

    This web site here is a dinosaur, man.

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