On this day in economic and business history...

"Prices of Stocks Crash in Heavy Liquidation; Total Drop of Billions," read the front page of The New York Times after a 6.3% drop in the Dow Jones Industrial Average (^DJI -0.11%) on Oct. 23, 1929. The stock market had peaked that September, and by the end of trading on Oct. 23, the Dow had shed nearly 20% of its value. It was a frenetic day, with 2.6 million shares sold in the final hour as the market plunged to a loss of $4 billion, equal to about 4% of the national GDP.

Eight days after predicting a "permanently high plateau" for stocks, economist Irving Fisher again made his bullish case amid increasingly frenzied pessimism. At a gathering of the District Bankers Association after the market closed on Oct. 23, he reasserted his belief that stock prices were not inflated as much as some bears believed. "Public speculative mania," Fisher said, was at the bottom of a list of reasons why prices had gone parabolic over the preceding year, trailing by far his leading explanation: A number of large mergers had "effected great economies and [had] therefore increased the profits of corporations to a great extent." Strangely, he also cited America's decade-long prohibition of alcohol as one reason for the bubble. Perhaps, having less money to spend on booze, Americans decided to buy stocks instead.

Other market insiders supported Fisher. The Times interviewed several leading bankers on Oct. 23, and their consensus was that "the market might easily be supported since the sound stocks had fallen to levels that made them attractive for investment." One banker found his reason for optimism in the fact that the day's turbulence would "send back to work many people who have been sitting around brokerage offices for a year or so on the trail of easy money." He pointed out that the many thousands of merchants, farmers, and other workers who had abandoned normal business operations to speculate would have to "by necessity have to go back to earning their living in normal ways." If that banker had known what was in store, he might not have been so glib about the economic jolt so many would soon feel.

The sudden drop of Oct. 23 also brought out the poets of Wall Street. H. I. Phillips penned several market-oriented nursery rhymes in response to the drop, which were published in The Washington Post the following day. Here's a collection of three, for your amusement:

Jack Spocks would buy no stocks,
His wife no tips would play,
And that explains just why they both
Got three square meals a day.

There was an old woman who lived in a shoe;
She bought lots of issues untested and new;
She did everything that her broker said to --
Now gone is her money and also her shoe.

I had a little oil stock
No bigger than my thumb;
I bought it on a phone tip --
Oh Lord, but I am dumb! 

How Apple got its groove back
Apple (AAPL 1.27%) launched itself into a post-PC era when it unveiled the iPod to the world on Oct. 23, 2001. Analysts and tech-industry insiders enjoyed Apple CEO Steve Jobs' signature promotional flair at the debut of "a breakthrough digital device," which "invented a whole new category of digital music player" that meant "listening to music will never be the same again."

Analysts weren't sure what to make of the iPod. Many were skeptical that its $399 price tag could compete with similar MP3 players, such as the $249 Nomad Jukebox from Creative Labs. The market has long since proven those doubting analysts wrong. Creative Labs lost 70% of its value over the following decade on its native Singapore stock exchange, while Apple went on to post gains of over 4,000%. By the end of 2011, Apple had sold over 300 million iPods worldwide. At that point, Microsoft, which had attempted to enter the MP3 player market with the Zune in 2004, waved the white flag, and announced it would discontinue its device.

How Google found its cash cow
Google (GOOGL 0.55%), the scrappy but fast-growing upstart in the online search wars, launched its self-serve advertising platform AdWords on Oct. 23, 2000. AdWords, in Google's own words, "enables any advertiser to purchase individualized and affordable keyword advertising that appears instantly on the google.com search results page." It was the big breakthrough Google needed to step up from a company with a great product, but a dubious path to profitability, to a highly profitable world-class technology company.

By allowing anyone to easily access millions of potential viewers by simply selecting a few keywords and bidding on how much they were willing to pay, Google expanded the advertising market from the traditional sphere of mid- and large-sized companies, to anyone who needed to attract some attention and had a little money to make it happen. The results were readily apparent: Within the first year of AdWords' operation, Google booked more than $70 million in advertising revenue, a huge leap from just $220,000 in total revenue in 1999 and a modest $19 million in 2000. Google continued to refine and expand on its advertising platform, and revenue continued to soar. Its $3.2 billion annual revenue stream in 2004, the year of its record-breaking IPO, was 3,600% greater than its total in 2001, the first full year of AdWords' operation. And by this point, many of Google's biggest product breakthroughs were still ahead.

Google's advertising revenue continues to drive the company's engine of innovation today. The company's 2012 ad revenue\, at $43.7 billion, represented 87% of its total revenue. AdWords had helped to propel Google's advertising revenue 80% higher each year for 11 straight years -- a truly impressive feat of growth for a young company.