Internet investment fever cools in Silicon Valley

For all the sound and fury about the Internet business, it accounted for only a few of the most successful Silicon Valley start-ups in 1996 - and it was the subject of some of the bigger flops.

For all the sound and fury about the Internet business, it accounted for only a few of the most successful Silicon Valley start-ups in 1996 - and it was the subject of some of the bigger flops.

The new company which saw its share price rise most over its first-day close, was Cotelligent Group, a computer consulting firm which nearly doubled its value in 10 months. But the stratospheric, Netscape-style Internet performers are notably missing from the list of 1996 Bay Area IPOs (Initial Public Offerings).

In fact, the best performing IPO directly related to the Internet was that of Visigenic Inc, at 11th on the list. The company specialises in database and distributed connectivity for the Internet and enterprise networks. C/Net, the high-profile TV/Internet content business, could manage on 15th on the list, its stock having finished the year 52% up on its July launch.

The real story, perhaps, lay with the cluster of Internet search and navigation services near the bottom of the list. Infoseek's year-end share price was 44.6% down on its first-day close, Yahoo!'s was 48.5% down and Excite's 48.8%. Yahoo! was the first of the three to launch, in April, and its figure is somewhat distorted by its wildly optimistic first-day price of $33. Currently trading at $17, as compared to an initial offer price of $13, it is the only one of the three to be worth more than its initial offer price.

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