The Internet is perhaps the most dramatic proliferation of technology ever witnessed. Like other rapidly evolving technologies, it has evolved in stages. The first stage was the development of the core technologies that took place in the early 90's, before the start of significant commercialization.
Current developments are primarily taking place in the area of infrastructure. There are two main areas of activity. The first is the production of software for accessing material on the Internet. This includes software for consumers to run on their PC as well as the server software run by the suppliers of information. The main activities currently involve the development of World Wide Web browsers and servers. The second area of activity is in the provision of access to the Internet through Internet service providers (ISP's). These are services which customers subscribe to that allow them to link their computers to the Internet, usually through a telephone connection to the ISP.
The Internet is providing excellent opportunities for investors, especially those who get in early, before companies go public. The price of initial (seed) stock is often a fraction of the initial public offering price, and companies often see rapid gains in stock price when they do go public. The following are a few examples of Internet companies that have recently gone public.
Netscape : Netscape was the first of the new Internet players to go public with a huge flurry of publicity at the beginning of August. The company is best known for its web browser, software for accessing the World Wide Web (WWW). The company has captured a large share of the WWW market by making a basic version of its browser available for free. It also sells Web server software. The company intended to offer its stock in the $25 (US) range, but there was such demand that in the first day of trading the price rose to over $75 (US) before settling back to the $50 (US) range. It has since seen a fairly steady increase and is currently trading in the $140 (US) range. The seed stock price for Netscape was in the area of $0.90 (US).\plain\f16\fs22 \par
Spyglass : Spyglass was formed in January 1990 by scientists and software engineers from the National Center for Supercomputing Applications (NCSA) at the University of Illinois at Urbana-Champaign. It is another company providing software for the World Wide Web. It also has a WWW browser (Mosiac) and as well builds software that other companies incorporate into their products. It has alliances with a number of major players in the industry, including Microsoft. Spyglass recently (Summer 1995) went public and its shares, which traded initially at $17 (US) are now trading in the $100 (US) range. The company recently announced a 2/1 stock split for mid-December.
Things are perhaps moving a little slower in Canada, but just in the last few months some companies have gone public.
iSTAR Internet : iSTAR Internet is a Canadian Internet service provider that went public in November of this year. Its strategy has largely been to buy up existing service providers in major centres in Canada in its bid to become a National provider. It is currently operating in 30 cities in Canada and claims to be the largest Internet service provider in the country. Locally, it recently bought MindLink and has an agreement to buy Wimsey, two of the largest and most established Vancouver-area providers. The company has just gone public and quickly sold out its initial offering at $12.00.
Cyberion Networking Corporation : Cyberion Networking Corporation, based in Surrey, B.C. is another Internet company that has just gone public. Cyberion, through several subsidiary companies, acts as both a provider of services, and a creator of content. Through an affiliation with Norsat International, a distributor of satellite communications equipment, Cyberion plans on offering direct to computer satellite service, similar to satellite television. This will allow them to provide services in remote areas where access is currently not possible. Cyberion has just gone public and its stock is currently trading in the $3.50 range. Seed stock was priced at approximately $0.40.
As you can see from the descriptions of the companies above, the major players tend to fall into the categories of software or service providers. The next stage in Internet development will be triggered by a demand for quality content and the need for services for handling financial transactions. The Internet will become a new, broadly influential mass media - likely to be on a par with the telephone and the printing press. There will be explosive growth in infrastructure, services and content between now and the turn of the century. This explosive growth will provide unprecedented opportunities for companies in the industry.