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.com, Leslie Walker
For Good or Ill, IPO Market Has Heated Up


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The .com column in the July 22 Business section gave the wrong time frame for Odimo Inc.'s $14 million loss on $10 million in sales. Those results were for the first quarter of this year, not for all of 2003.

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Among the most successful were online diamond seller Blue Nile Inc. and online software vendor Both are profitable. Two other online software providers that have been losing money went public: Blackboard Inc. of the District and Marchex Inc. of Seattle.

But you know the market is getting frothy when Internet survey firm Greenfield Online Inc. can raise $52 million from public investors, as it did last week. The Wilton, Conn., firm eked out its first profit last year -- $1.6 million on sales of $25.8 million. Greenfield accumulated a deficit of $72 million over the past three years, yet managed to pay its chief executive $666,667 last year. How 1999ish is that?

Other marginally profitable Internet companies also are waiting to go public, along with some that have never earned a dime.

Filing last month was Interchange Corp. of Laguna Hills, Calif. Never heard of it? That might be because it has changed its name a few times.

Created in 1999 as eWorld Commerce Corp., the company rechristened itself, then renamed itself Interchange Corp. The company runs a targeted search advertising network that competes with industry leaders Google and Yahoo Inc. It reported a profit of $60,000 on anemic sales of $8.7 million last year.

Also in registration is online retailer Celebrate Express Inc., which is hoping to snag the BDAY symbol on Nasdaq. The Kirkland, Wash., outfit sells party supplies from Web sites and catalogues. It recently reported its first annual profit.

Celebrate Express has been on the Web since 1996, one of several recent dot-com IPO filers that have been slaving away online for years, even as others were quitting, going bankrupt or selling out after the Internet bubble burst. Most still face stiff competition and are barely hanging on. They include PlanetOut Inc., the gay portal, which lost $752,000 on revenue of $12.7 million last year; ZipRealty Inc., the Internet real estate pioneer, which lost $4.5 million on sales of $32.6 million; and, which turned a nice profit last year selling advertising and helping consumers compare product prices online.

One of the weaker IPOs hopefuls may be one of the more profitable: Claria Corp. of Redwood City, Calif. The four-year-old ad network brings annoying pop-up ads to the Internet, along with spyware software to track user surfing habits. Claria earned $34.8 million on $90.4 million in revenue last year, according to its filing.

Its fat profit margin could make Claria a takeover target, suggesting it may follow of Baltimore, which recently sold to America Online Inc. after filing for an IPO. And in May, Symantec Corp. snapped up another IPO hopeful, Brightmail Inc., which sells anti-spam software.

If all these Internet companies sell stock this year, you can bet that the sudden supply of new Internet offerings will depress the already soft prices of technology companies even more, perhaps to the point that many hoping to cash out their original investors would come up empty-handed. Already, many recent IPOs have found demand so weak that they reduced the number of shares sold and slashed their offering prices.

"There is not a lot of investor appetite for IPOs," said Tom Taulli, co-founder of, an IPO research service. "Only a certain number of investors are willing to take the risk involved. Then, too, the new regulations governing investment banking are having an impact."

But if diamond retailer Odimo makes it to the public stock market, it might be time to start stashing cash under your mattress.

Leslie Walker's e-mail address is

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