Don't believe the hype: The 21 biggest IT flops

Overhyped 'Next Big Things' of the technology business


Presaging our current era of Netflix and downloadable movies, DIVX (not to be confused with DiVX, the video codec) flashed brightly in the late '90s, then flamed out. The idea, hatched by electronics retailer Circuit City, was interesting -- you would rent movies on DIVX discs that you could keep and watch for two days. Then you'd toss or recycle the discs, or pay a continuation fee to keep viewing them.

Prices were to be competitive with video store rental fees, with the added benefit of not having to return the disc. All that was required was a DIVX player, which Circuit City would be happy to sell you, and the movie discs, which Circuit City also would be happy to sell you.

Hardware vendors went along for a while but weren't overly enthusiastic, since the DVD format, for which they also were manufacturing players, was starting to gain traction at the time. And the video-rental industry fought the concept tooth and nail, loudly proclaiming the benefits of the DVD format, which they called "Open DVD," over DIVX.

Consumers didn't warm to the scheme either, fearing that DIVX vs. DVD could turn into another costly Betamax vs. VHS debacle. DIVX died a rapid death -- it was launched in 1998 and was pretty much sunk by the middle of 1999, leaving some people with worthless equipment -- although vendors did offer a US$100 refund for those who bought a DIVX player. Still, left behind were lots of bad feelings about yet another bright idea that flopped.


Oh, those glorious days in the late '90s, when everyone thought they'd get rich off the Internet! One poorly conceived dot-com company after another was launched and promoted with an influx of money from the venture capital community. The lucky ones went public and saw their stock prices go through the roof and then plummet after the bubble burst in 2000. Many others never even made it that far before fizzling out.

Although they represented a wide range of concepts and products, it's hard not to think of these "dot-bombs" as one entity, which is why we've entered them as a single nominee.

If there's one enduring symbol of the dot-bomb era, it was's wretched sock puppet advertisements, which figured prominently during the 2000 Super Bowl broadcast. Other advertisers for that year's big game included forgettable (and forgotten) companies like LifeMinders, and the cheerfully named

Maybe the dot-bomb CEOs should have banded together to start The CEO of, which spent US$5 million to advertise on the Super Bowl, was quoted in BusinessWeek as saying, "I consider myself a visionary." He apparently couldn't foresee that his Super Bowl spending would hasten the end of his company.

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David Haskin

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