April 24, 2003

A VC revisits dot-com land



Bill Gurley of Benchmark Capital took a little time off recently to examine what had happened to the world of "dot-coms"--a category treated as the ultimate pariah by VCs everywhere for the last 3 years.

Here's what Gurley says he found in his latest column :

"Amazon's market capitalization has climbed 79 percent in the past year to $9.7 billion. Yahoo, over the same time period, has climbed 63 percent to reach a corporate value of $15 billion. And eBay, the cream of the crop, is up 61 percent to reach a whopping $28.4 billion. Cumulatively, that is more than $50 billion in value for the top three players in this newbie industry, which seemed very un-business as we crashed to earth in late 2000......

Other public Internet companies are seeing a resurgence, or at least are holding their ground. WebMD, Verisign, TMP Worldwide (Monster.com), and DoubleClick all sport market capitalizations north of a billion dollars. Additionally, Overture, Earthlink and RealNetworks are hovering in the $700 million to $900 million range. Even newcomer NetFlix has seen its stock jump from a 52-week low of $5 up to a respectable $22 per share."

Gurley analyses the reasons why these companies are doing decently well for themselves and their investors in such a touch economic climate. Click Here to read Gurley's full column

PS: Interestingly, Gurley also takes a shot at the media in this article:

"Things are so good that last week Barron's dusted off its charming fondness for everything Internet with a newly negative article titled "Bubble Redux." It turns out that Barron's is quite unhappy that consumer Internet stocks have risen in value and suggests that the "real" value of eBay, Yahoo and Amazon are actually far below what their current stock prices indicate." :-)