With Google’s IPO filing Silicon Valley is crossing its fingers, praying that the event marks one of those epochal turns of the boom/bust cycle (like Netscape’s 1995 public offering) signalling a new technology-industry bonanza. Never mind the destructive consequences of the last turn of this wheel; everybody strap on your belts and jump on for another wild ride — after all, maybe you, too, will get rich!
I love using Google; I’m still proud to have been among the first technology writers to recommend it to my readers, back in late 1998, and for a long time I got e-mail from people thanking me for turning them on to it.
I’m also happy to see that Google has chosen to use a “Dutch auction” approach to pricing its IPO. Those of you with long memories may recall that Salon used a similar method in its 1999 IPO. (A Dutch auction IPO allows the stock offering’s price to be set by a complex but fair market process rather than by bankers sitting in a closed room trying to figure out how to price the stock so as to best enrich their pals.)
Google is a wildly different company from ours in many ways — and a lot more successful as a business! But the basic arguments they cite for the Dutch auction — the desire to level the playing field, to give small investors a chance to participate, and to avoid the sort of cronyism that gave boom-era IPOs a bad name once the market turned south — are the same ones that persuaded us to go that route five years ago. Salon took a lot of brickbats for the choice back then, so it’s nice to receive this kind of after-the-fact endorsement of our decision from such a significant player.
All that said, I’m kind of amazed at how eagerly some corners of the Valley seem to be anticipating a return to boom-era insanity. I’m crossing my fingers, too — praying that a successful Google IPO, which I certainly think it deserves, doesn’t spark a new round of stupid investments and “we’ll figure out the business model later” startups.
In the ’90s, many people had the excuse of youth and inexperience — they were building their first companies, and they’d never experienced a downturn. Today, the scars of the bust are still fresh. No one can plead ignorance. If we fail to make smart choices and build sustainable businesses that can support innovation rather than fuel get-rich-quick dreams, we have no one else to blame. Certainly not Google.
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