In the new dot-coms, just because you have money doesn't mean you have to flaunt it. Tech executives say a humbler and healthier attitude toward riches permeates the industry nowadays.
"It went from hype to hate, and now it's about getting back to the basics of business," said Mark J. Pincus, chief executive of Tribe Networks Inc., which provides technology for local searching and networking and is based in San Francisco.
Google employees prepare for a ski lesson during the company's trip. Google paid for skiing, snowboarding, tubing and ice skating for its employees.
(Ariana Eunjung Cha -- The Washington Post)
Transcript: The Post's Ariana Eunjung Cha discussed her article about the tech sector's cautious revival.
That is important because there is abundant evidence that money is pouring back into dot-coms. The three most successful initial public offerings last year were for Internet-based companies few had ever heard of: Shares of Shanda Interactive Entertainment Ltd. and employment search site company 51Job Inc. nearly tripled in value. Online marketer Marchex Inc.'s shares more than doubled. For the first time in four years, venture capitalists boosted their investments in Internet companies, handing more than $20.4 billion in 2004 to entrepreneurs with the next new idea.
Companies like Audible Inc., Varsity Group Inc. and the Knot Inc. that were worth millions in 1999, became jokes in 2001 and were all but given up for dead in 2002 suddenly seem viable again. Yahoo Inc. and other companies that were ridiculed because they boasted about their "eyeballs," or number of people looking at their sites, are making money on just that, reporting record profit based on online advertising revenue. Internet icons such as venture capitalist L. John Doerr, who dropped from the media scene, are back in the spotlight, again touting the virtues of the Internet Age.
Some say the resurgence of some companies makes them nervous. There is more of 1999 in the current atmosphere than they would like.
"There is a little creep back, and I'm concerned about this enthusiasm without evidence," said Prem Uppaluru, a self-described serial entrepreneur who is chief executive of Transera Communications Inc., which provides technology to companies that outsource operations.
Others argue that things may be looking up for Silicon Valley but that it still has a long way to go to regain its former strength.
"In the past, every time we went into a recession, Silicon Valley came out roaring. . . . This is the first one where we have come out like a lamb," said Shayam Nagrani, principal analyst at iSuppli Corp., a market research firm in Santa Clara, Calif. He has lived in the region for 25 years.
Stephen Levy, director of the Center for the Continuing Study of the California Economy, said that while company profits and stock prices are soaring, that hasn't translated to job growth. The state is still down some 200,000 jobs since 1999 -- more than were lost in Detroit when the auto industry declined or in Pittsburgh when steelmakers filed for bankruptcy protection. The good news is that there is less bad news: In 2004, for the first time since the bust, employment remained relatively steady instead of falling.
A report released yesterday by Joint Venture: Silicon Valley Network, a coalition of local government and corporate officials, concluded, "[T]here is something profoundly different this time around: how we grow has changed. The technology revolution and intense global competition have led Silicon Valley companies to achieve high productivity gains without adding to their payroll."