It might be Google's unique initial public offering that crowds the headlines lately, but the search kings are far from the only Internet outfit rolling out IPOs of late.
Published reports indicate at least nine other Websites are lining up for IPOs, including gay Web portal PlanetOut, Seattle-based jewelry retailer Blue Nile, Emeryville-based bookseller Alibris, and more. But analysts say questions remain open as to whether these have a better outlook than such spectacular dot-com boom busters as Pet.com, Etoys, and Webvan.
"There is more substance to the business models of these companies," Renaissance Capital analyst Paul Bard told the San Francisco Chronicle. "That's not to say that they are going to be great investments."
"[T]he prudent technology stock watcher and savvy investor will wonder whether most of those companies might eventually go bust in an imitation of their dot-com predecessors," wrote Washington Post tech news columnist Cynthia Webb. "Will 'sucker' be the word written on the forehead of the investor who bets big on 'Tech Boom: The Sequel?' We hope not, but it's not out of the realm of possibility."
PlanetOut's plans have apparently raised the most skepticism, according to the Chronicle. The gay portal - linking to everything from gay-oriented news to gay-oriented social and entertainment activities - reportedly lost $752,000 on revenues of $19 million last year. They filed for their initial public offering in late April.
"[Theirs] is probably a niche market," Tom Taulli, who co-founded IPO-tracking Website Current Offerings, told the Chronicle. "It's tough to make a case for a company like this to go public."
Another Renaissance Capital analyst, Kathleen Smith, told the Associated Press that Google cracking the code for online search just might mean they can "crack the code for getting the individual investor more involved in the IPO market." The thing is, if you want to get in on the Google IPO auction, you have to open an account with either of two Google IPO bankers, Morgan Stanley or Credit Suisse First Boston.
And even the Google IPO, as much enthusiasm as it has garnered, has its small share of skeptics.
"Google says it wants the auction to determine the price of its initial shares. Some will be distributed by Morgan Stanley and CSFB, but the majority are supposed to go to members of the public who bid at or above the price," wrote AP business writer Michael Liedtke.
"One of the biggest downsides to this system is a potential outbreak of buyer's remorse," he continued. "Because the auction is set up to determine the price most people are willing to pay for the stock, that theoretically means few people would buy the shares at a higher price in the first few days or weeks. The scenario could cause IPO bidders to worry they overpaid for Google's stock and prompt a wave of selling that drives down the price, a phenomenon known as 'the winner's curse'."
Blue Nile, Alibris, Salesforce.com, and Shanda Intera are the Internet companies set to roll out their IPOs this month. The New York Times says Salesforce is "the other big IPO" among the resuscitating dot-com world, but Webb said their plans "pale in comparison to Google, both in size and shape of media coverage." Which, according to the Times, depends on how you look at it, since the paper described Salesforce.com founder and chief executive Marc Benioff as still trying to be something of a media hound. But Salesforce.com may well prove a better gauge on whether the current small group of Web-based IPOs will prove new tech offerings promising.
"There's quiet, and then there's Marc's version of quiet," former Salesforce.com chief executive John Dillon told the Times. "He loves the media attention and courts it like no one else in Silicon Valley." The paper quoted Benioff himself as saying he has no choice, selling as he does a product only a sales executive could love: simple, efficient customer and prospective client tracking.
"The [Securities and Exchange Commission] prohibits me from making any statements that would hype my IPO," Benioff said in a formal statement released over the weekend, but one he repeated to any reporter whose interviews "drifted even close to the pending stock offerings," the Times noted.
