Dot-coms healthier, humbler

By Ariana Eunjung Cha
Washington Post

SQUAW VALLEY, Calif. — The first company to rent out this entire ski resort, arguably Lake Tahoe's most expensive and exclusive, didn't even exist a decade ago. But such is the fame of its name and the magic of its reported wealth that workers here immediately began dreaming of getting their own tiny shares.

Google employees prepare for a ski lesson during a trip to Lake Tahoe, where the company paid for skiing, snowboarding, tubing and ice skating. Five years after the giddy boom and four years after the gut-wrenching crash, Silicon Valley is back— but with a lot less swagger. Ariana Eunjung Cha • Washington Post

But those expecting a bonanza this time went away disappointed.

The employees of Google Inc. came aboard standard commercial buses. (It was cheaper than flying but meant that employees left company headquarters at 5:30 a.m. for the five-hour drive.) The rooms were crammed to maximum occupancy. (It wasn't unusual for strangers to be assigned to share double beds.) And while most of the employees were at the resort or in transit for 36 hours, the company provided only two cafeteria-style, buffet meals. (The resort's restaurants were too pricey.)

That's Silicon Valley five years after the giddy boom and four years after the gut-wrenching crash. It's back — but lacking some swagger. It's making money again for its investors and employees, but there is a chastened sense. No one wants to invoke the specter of excess.

Everyone here remembers the days when MicroStrategy Inc. Chief Executive Michael Saylor whisked his company off for a post-holiday Caribbean cruise; when venture capital firm Draper Fisher Jurvetson threw a party so large, it was held in a NASA hangar; and when companies whose names have long been forgotten were so flush with cash, they were able to hire Cirque du Soleil, Elvis Costello and the B-52's for their bashes.

But even though Google shares are now worth $49.4 billion in the stock market — more than the combined value of Ford Motor Co., Safeway Inc. and Kmart Holding Corp. — its employees didn't throw money around.

"The Google guys were the opposite of what you might expect," said one sales clerk here. "They were grumbling that the $2.65 price of a ChapStick was too much. Go figure."

Google employees, all of whom said they are prohibited from speaking with the media without approval from the company, jokingly grumbled that the mandatory event was somewhat like camping. But they said hanging out with co-workers in an informal setting, watching their bosses fall in the snow, and dancing to '80s music helped build camaraderie.

"It was quite a production, but it was great and I got to see people in a way I had never before," said Stacy Sullivan, Google's human resources director.

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.

That's important because evidence is abundant 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 increased 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. — worth millions in 1999 — became jokes in 2001 and were all but given up for dead in 2002. But they 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 makes them nervous, with more of 1999 in the current atmosphere than they'd like.

Others say that while things may be looking up, Silicon Valley still has a long way to go.

"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., who has lived in the region for 25 years.