SAN FRANCISCO — Most of the time, the Digital Revolution rushes by so fast it's little more than a blur of mergers, high-tech breakthroughs, and big ideas.
There are days, though, that deserve to be pulled off the assembly line of time. Freeze-framed, they capture the personality and sheer force of the changes afoot. Friday was one of those days.
The financial markets were closed, highway traffic was light, and a thinned-out work force was gearing down for an Easter weekend.
Here in Silicon Valley, a pair of recent college graduates had every reason to relax - each had made millions in the stock market the previous day. Yet for Jerry Yang and Joe Kraus, Friday was no holiday.
Mr. Yang, cofounder of Yahoo! Inc., and Mr. Kraus, cofounder of Excite, are at the nexus of a business that is dazzling Wall Street. Their companies run Web sites that help people surf the Net - and as the number of people coming to their pages each day continues to grow, their stocks are becoming some of the biggest gainers in the market. And with many Internet companies still struggling to turn a profit, it's an indication that the Web is emerging as a major player in the economy of the future.
For Yang - whose net worth is more than $760 million - Yahoo's rise has allowed him to think a little more long term, but he says, "We're always paranoid."
No wonder. Just miles up the road, Kraus acted surprised when asked if he planned to take part of the day off. "I didn't know it was a holiday. I can't. The other guys are working."
The other guys would be Yang and Yahoo, as well Lycos, InfoSeek, and America Online. They're all companies rushing frantically to become to the Internet what CBS, ABC, and NBC once were to television. They want to be the home base, the channel setting for users to find all they need on the Internet.
And timing is everything. The Internet has been around for 30 years, but only recently has it become a true mass-market medium. It has achieved an audience of users now estimated at more than 50 million worldwide, and as the market broadens the demand for ease of use intensifies.
Gateways to the Web
Jerry and Joe want to be your facilitators. They and their competitors are transforming their businesses from providing search engines that help people just find things on the Internet to something much broader. Now, they want to be the gateways to personalized news and information, chat rooms, e-mail, and direct sales of consumer products. Their revenue comes from advertising and partnerships with companies that want the audience their services deliver.
And increasingly, companies like Yahoo and Excite are delivering more of an audience. Yahoo - the Web's most-visited site - is now registering 95 million page views a day, and with people making so many visits to the site, advertising dollars are going up. Last week, Yahoo reported first-quarter earnings that were twice as high as most Wall Street forecasts.
Internet for the masses
In effect, Yahoo and Excite are trying to make the Internet Revolution user-friendly to a broad consumer audience. The companies think big and move fast. They typify what makes Silicon Valley unique as a business and cultural icon of the 1990s.
Excite was created in 1995 when six college graduates borrowed $15,000 from their parents and went to work in a garage, writing software to search databases. Today, three years later, the company's market value is just over $1 billion.
Yahoo was more a hobby than a business when started in 1994 by a couple of Stanford graduates. Yang and cofounder David Filo collected the addresses for Web sites and published them on the Internet. Based on Thursday's stock price, which leaped $17.25 in a day, Yahoo is now worth just over $5 billion.
All Yahoo employees are issued stock options, so an overnight boom like that benefits everyone, instantly.
What does it feel like? "We've had a lot of ups. We've found we just have to adapt to this kind of environment," says Yang. "We don't pay a ton of attention [to the stock price]. It's good to be up this week, but we take it in a healthy balance."
Excite's Kraus is equally unflustered by his company's spurt last week. Its stock price jumped $9.63 to a record of $63.13 per share. "You keep your head down and just keep hoping the market catches up with what you're doing," he says.
Kraus and his colleagues had a fairly simple goal in 1995: to "start a company as friends and not work for anyone else." Today, things are bigger in every sense. "We like to say the opportunity is so big that we face an insurmountable opportunity," he adds.
Carving out a niche
Vernon Keenan, an analyst with Zona Research in Redwood City, Calif., says the value of Excite and Yahoo is growing because they have carved out strong brand identity worldwide. It may be, he says, that consumers will prefer only a handful of such brands as their "media channels" to the Internet, thereby making it much tougher for other brands to dislodge them.
But then again one of the few lasting features of Silicon Valley and its technology products is change itself. Next week or next month, the markets could ignore or even punish both firms. "The Internet forces you to be always changing," says Yang. "Three years ago, we wondered if the Internet was a fad."
That question, at least, has been settled.