It wasn't that long ago that Yahoo was just a directory that somehow started looking like a search engine. Eventually, it grew too big for its Stanford-based server britches, and its two founders "went commercial", to the utter despair of the shrinking-but-still-vocal anti-commercial forces in the Net.

But that was then. This week, Yahoo!, exclamation point proudly in place, offered stock to the public at thirteen bucks a share, and the public went into a veritable stampede, bidding the price up close to a startling $40 before things settled off at a still-implausible $33. Not a bad performance for an initial public offering of a very new firm, if not exactly on par with the dreammakers at Netscape. The brokerage firm making the offering pronounced itself pleased, and apparently everyone was happy.

One question, however, remains to be answered: Is Yahoo! really worth that much? In the strict capitalist sense, of course it is; the value of something is defined by what people are willing to pay for it, and you don't have to be Milton Friedman or any century's version of Adam Smith to know that. On the other hand, there's always the question of return on investment, and as the World Wide Web starts to look like the Nineties version of citizens-band radio, I've got to wonder what kind of homework some of these guys did. The commercial possibilities of the Web are still not ready for prime time; secure transactions remain the exception rather than the rule, and in my own browsing, I have yet to see an online shopping site that compares with the ostensibly more mundane e-malls at Prodigy and CompuServe, which lack Web cachet and yet which do tons of business. And it's probably a safe bet that investors aren't flocking to Yahoo! and other Web facilities out of admiration for John Perry Barlow.

I am, of course, pleased that David and Jerry are making a ton of money off this IPO, and I do hope that everything goes well for the new investor-owned Yahoo! But I keep hearing, somewhere in the back of my brain, that little voice crying ever so plaintively, "Too much too soon?"

The Vent

#2
13 April 1996

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