2000 to 2009: The Rise of Social Networks and Economic Crises - The Technical and Social History of Software Engineering - page 266

The dot-com bubble had collateral damages as well. Many network and tele-
communication companies had expanded their own networks to support the anti-
cipated growth due to dot-coms. For example, WorldCom became overextended
and declared bankruptcy. Many cities and states tried to attract high-technology
companies with tax breaks, business parks, and technology centers and were left
with empty offices and unused auditoriums. In total, the dot-com bubble burst
lowered technology stock values by about $5 trillion compared to their peak value.
Two more recent examples of collateral damages show that effects are still oc-
curring even today. The first was in 2009 when the city of Port St. Lucie, Flor-
ida, offered substantial incentives so that the graphics art company Digital Domain
would move a development lab to the area. A massive 115,000-square-foot office
and studio complex was constructed on the western side of Port St. Lucie and was
occupied by about 300 software and graphics personnel early in 2012.
However, in spite of an IPO in 2011, Digital Domain soon declared bankruptcy
in September 2012 and closed its Port St. Lucie facility, with a loss of hundreds of
jobs. The city of Port St. Lucie is now trying to sell or rent the huge office com-
plex, currently without results. The only space in it being used today is an auditor-
ium for church services.
Digital Domain was not a novice startup with unproven talent. The parent com-
pany had won seven Oscars for special effects in films, including Titanic and What
Dreams May Come . It employed some of the top computer and software graphics
artists in the world.
After the bankruptcy, quite a lot of the intellectual property of Digital Domain
was acquired, but that did no good for the huge vacant offices in Port St. Lucie,
which are now being maintained at municipal expense and may push the town to-
ward its own bankruptcy.
The second recent collateral damage example was Studio 38, which was given
a $75 million loan by the Economic Development Commission of Rhode Island
in 2005. This was an animated game company started by former Boston Red Sox
pitcher Curt Schilling. In return for the loan, the company moved to Providence
and began operations with about 250 employees.
As is common with software applications in the $75 million startup range, the
main product of Studio 38 ran behind schedule. As is also common with startups,
the company itself ran low on funds and fell behind in its payments to the state.