Since 1994, we have seen many companies come out of nowhere, off the radar, only to grow into positions of leadership and dominate their sphere. Some go on and galvanize that leadership positions, others falter and let someone else pass by.The following is HipMojo.com’s list of Internet Company of the Year, based on growth, market leadership, traction, strength of management, prospects and overall accomplishments.
All right, time for the envelopes, and the winners are:
1994: AOL.com
The year 1994 marked the appearance of ISPs across the web landscape. By August 1994, AOL merged with Redgate (a multimedia publishing company specializing in CD-ROMs), and a couple of months later, in November, AOL declared war on Microsoft, betting the farm on an online strategy. This marks the beginning of the rise of the Web versus the desktop theme. AOL begins to mail out millions of CDs trying to win over the masses. It works. AOL becomes the fastest growing ISP ever, surpassed only by Japanese wireless service provider iMode a decade later.
1995: Netscape
Netscape was created by Mosaic Communicatyions Corporation on April 4, 1994 by Marc Andreessen and Jim Clark. On October 13 1994, Mosaic Netscape 0.9 was launched, and renamed Netscape Navigator shortly thereafter. But it was on August 9, 1995 that Netscape went public, offering shares at $14 and closing at $75. In doing so, it ushered in the first wave of the World Wide Web’s golden era.
1996: Altavista
AltaVista remains a poster boy for the “what could have been” lot. It was launched on December 15, 1995 by its parent company DEC, but given its pedigree, it was used primarily as a showcase for DEC’s computing power. In 1996 however, it became Yahoo!’s exclusive search provider, and by 1998 was sold to Compaq, who then began the even-more-misguided plan to remake the search engine into a portal. By then, of course, Google was rising amongst pure-play search engines. In March 2004, Yahoo! bought Overture, who had previously bought Altavista; Overture itself is the runner-up for the “what could have been” prize.
1997: eBay
The “Candy dispenser story” is created by eBay’s PR manager, which changes its name from AuctionWeb to eBay. In 1997, the company captures the imagination of the masses, the next year the stock goes public, like many dot com entrepreneurs, founder Pierre Omidyar becomes a billionaire. Unlike most, thanks to eBay’s 80% profit margins, Omidyar remains a billionaire to this day.
1998: Yahoo!
Yahoo! was founded in January 1994 and incorporated a year later on March 2, 1995. It grew reasonably quickly from the onset, and on April 12, 1996, the company’s IPO raised $33.8M for growth opportunities. The subsequent year, in 1997, it acquired Four11 and its Rocketmail service, which became Yahoo! Mail. The rest, as they say, is history: in 1998 the stock rose from a split-adjusted $4 to $40, cementing its spot as the future leader of web media. In October 1998, it made its first acquisition, that of Yoyodyne, by 1999 it was acquiriing larger firms, first Geocities (1999), then eGroups (2000). Yahoo! could have also been named 2003’s Internet Company of the Year, in all fairness, since that’s when it started its resurgence.
1999: Amazon.com
In December 1999, when Time Warner (still separate from AOL) published its end-of-year issue of Time magazine, it put Amazon.com CEO Jeff Bezos on its cover for Man of the Year. While cracks had began to appear in the Web facade, the fact was that no one, and we mean no one, saw the storm that was brewing around the corner. Amazon.com was still a money-losing enterprise, but one that was widely believed to be making a run to acquire venerable retailer Walmart. Yes, you read that correctly. Today Walmart is worth 10 times more than Amazon.com. But within weeks of that cover issue, publisher of Time magazine Time Warner merged with AOL, ushering in the beginning of the end.
2000: Lycos
Launched in 1995 by Bob Davis, Lycos grew to become the most visited portal in the world by 1999. It was sold to Terra in May 2000, for $12.5B. By 2004, South Korea’s Daum Communications paid $95.4 million - less than 1% of Terra’s buyout price. What could have been was, came and went and Lycos today is an asterix of the Web’s go-go days… but Davis legacy remains somewhat unscathed as the architect of one of the premier brands of the Web’s first era of prosperity. Today Davis is a VC, Lycos is Korean.
2001: Napster
Napster was built in 1999, it spread like wildfire in 2000, but it peaked in 2001. Shortly thereafter, it was forced into submission by the RIAA and the record labels, but the genie was out of the bag, paving the way for decentralized P2P file sharing sites like Kazaa, Limewire, iMesh and Bearshare. Napster was at the time the fastest growing consumer application, ever.
2002: Google
The year 2002 could be seen as an innocuous one for Google and in many ways, we’ll admit that we could have picked Google in any year. But since other companies had their standout years in specific years, we picked Google for 2002 for a few, well, innocuous reasons. After all, by 2002, the Web had just suffered its devastating crash, and while many dot com dreams had gone up in flames, one company emerged largely unscathed and perfectly positioned to benefit from it: hiring cheap and smart labor and investing in the super powerful computer it is today. That year Google’s revenue grew 409% from 2001, but 2002 was also the last year Google’s revenues were below $1B per year, coming in at $439M. Somewhat more interestingly, that year marked the last year Google’s ending headcount stood below 1,000, finishing 2002 with 682 Googlers, by the end of 2003, Google employed 1,682 people, and today it employs over 10,000. That year also saw the shift of Google from a “simple” search application to the search and advertising powerhouse it is today: the next year, it scooped up companies that added to its lethal search algorithm: first Applied Semantics in April 2003, then Sprinks in October 2003, right before it began to plan for an IPO, in August, 2004.
2003: Cisco
The network is the computer, and no company has benefited more from that than Cisco Systems, the stock that outperformed all others, and won our Top 10 Web / High Tech Stocks of Past, Present and Future (link below). In some ways, Cisco should not make this list, but since we’re looking at Internet company of the year, then it’s unfair not to give Cisco some credit, especially since they are the ones selling the shovels and hats to the many entrepreneurs and investors looking to succeed on the Web. In 2003, long after the bubble burst, Cisco’s stock rose from $13 to $24, nearly doubling and effectively ushering the return of the Web.
2004: Skype
Skype’s history can be traced back to 2002 when Draper Investment Company invested in the company, which was founded by the entrepreneurs behind Kazaa, Niklas Zennström and Janus Friis. The Skype domain names were only registered in April 2003, with the first beta version coming on the heels of that in August 2003. But by October 2005, eBay paid $4B for Skype. Oh, in between, Skype revolutionized communications and scaled to millions of concurrent users, after hitting 1M concurrent users in 2004, 2005 saw them hit 4M concurrent users.
2005: MySpace
MySpace was founded in July 2003 by Tom Anderson and Chris DeWolfe. As one of the leading and more visible players of the social networking landscape, it silenced all the critics many times over: first when it overtook Friendster as the largest social networking site, then when News Corp. paid $580M for MySpace parent Intermix in July 2005 and then when it went on to triple in size after Rupert Murdoch took over the asset and created Fox Interactive Media around it. Today, MySpace is the largest web property when measured by pageviews, with its 100 millionth user profile having been created in August 2006. We dubbed MySpace the greatest Web acquisitions ever after Google paid News Corp. $900M in an ad deal for rights to power its search engine and run contextual search ads.
2006: YouTube
YouTube went from 0 to $1.65B in eighteen months. Founded by three former Paypal employees and funded by members of Paypal who relocated to the Sequoia venture capital group, YouTube meshed user generated content with tagging to create the fastest growing startup, ever. The company secured $11.5 million from Sequoia and cashed out when Google made an all-stock bid for the company in Q4 2006.
2007: Facebook
Facebook opened its site up to the non-college crowd in September 2006, by springtime, when they announced their developer program, Facebook was clearly the “it” company of the year, despite being the second social networking site behind MySpace.com. Facebook’s growth spiraled rapidly as the 25-34 demographic connected with old friends via the site. Throughout the year, the paper valuation of the company spiraled from $2-4B, up to $6B, then $10B, ultimately settling at $15B with a $240M investment for 1.6% stake from Microsoft. Additional investors were Li Ka-shing - East Asia’s richest person - and then the Samwer brothers (in 2008). The company faced some turbulence with privacy woes, its Beacon advertising program was practically a disaster… but by year’s end, Facebook was breathing down MySpace’s neck and partnered with the world’s most valuable technology company.
Who’s your pick for 2008? Vote in the comments.
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