Dot.Con: The Greatest Story Ever Sold.

• Author: Thompson, Nicholas
• Position: Political booknotes: net loss

JOHN CASSIDY PROBABLY SET OUT to write the first really readable, definitive history of the Internet: from the wild levers of early punch-card machines to the glorious late '90s, when you could log onto Kozmo.com, order a pint of ice cream or an old comic book, and get it delivered in minutes for free.

Cassidy earns his keep writing for The New Yorker; and, as with many of the narrative pieces in that magazine, Dot.con starts out with a time, a place, and an important person you don't know much about, in this instance, it's Vannevar Bush, father of the National Science Foundation (NSF), and his World War II dream of using computers to organize massive amounts of information with links mimicking the way our minds associate. As Cassidy explains, Bush didn't accomplish his ultimate goal, but he did kick-start the research that would lead to the Internet and then the World Wide Web.

Cassidy then does a good job of describing the extraordinary moment, right before the Internet boom, when hordes of people foresaw amazing things happening with information technology but few actually had any clue how it would really work. Time Warner, for instance, spent about $150 million trying to build a network of television sets in Florida in the early '90s, and Bill Gates barely mentioned the Internet in the first edition of his 1995 book The Road Ahead.

Soon, however, Netscape Navigator emerged and the Internet and the Web began to grow exponentially, along with the number of users, the wild prognostications about its importance, the number of pimpled millionaires it created, and so on. At about this point in the tale, though, Cassidy leaves the narrative track and begins to push the theory that comprises his title: Dot.con, The Greatest Story Ever Sold.

Cassidy's theory is that the Internet stock boom wasn't just a Ponzi scheme inadvertently created out of exuberance for a remarkable new technology. It was a Ponzi scheme maliciously created by a selfishly-motivated cabal of journalists, analysts, investors, politicians, entrepreneurs, and others. This "unscrupulous alliance helped turn an exciting technological development into a dangerous speculative bubble."

Perhaps the best example of the lunacy came in 1999 when 3Com spun Palm Computing off as a subsidiary. Palm's stock spiked upwards, and its market value soon dwarfed 3Com's, even though 3Com controlled 95 percent of Palm's stock.

Cassidy is also right to argue that many of the rowdiest boosters were...