Who's Still Afloat? Who Went Under? And Why?

In 1999, 21 Local Companies Took the Plunge and Went Public

For four years, companies hoping to sell stock to the public for the first time have found the doors all but shut. Stung by the dot-com disaster, shareholders were not buying and young companies stopped trying.

Now the doors are opening a crack again. More initial public offerings were completed in the first seven months of this year than in any of the previous three years.

There is more to the resurgence than the approaching market debut of Google Inc. Successful offerings by Blackboard Inc. of the District and TNS Inc. of Reston have reverberated through the Washington technology community.

Investors considering the new IPOs might draw some lessons from the boom years.

In 1999, a high-water mark for local IPOs and the midpoint of the Internet stock bubble, 21 companies in Maryland, Virginia and the District went public. Nearly all were enthusiastically received by investors, at least at their starts.

Six are no longer in business, seven were sold and eight continue to operate as stand-alone businesses.

The dot-coms among them had the worst survival rate. Many of those still alive struggled with layoffs and disappointing earnings. A few tossed out their original business strategies and aimed for different markets. Some just disappeared.

"What happened, as '99 wore on, is that the bar got lower and lower," said Raul J. Fernandez, founder and former chief executive of Proxicom Inc., a Reston-based Web development company that went public in 1999. "It was a unique moment in time, the good and bad did get to go out. And the companies that had good fundamentals were acquired or are still around."

Survivors

Among the surviving IPOs of 1999, the most successful -- Corporate Executive Board Co., Trex Co., XM Satellite Radio Holdings Inc. and United Therapeutics Corp. -- have one thing in common: limited dependence on the Internet.

Most have old-fashioned business models. They offered tangible products or services, and they collected tangible payments in return.