Home Wozniak, Circa 2004: Google’s Value Is “Not Likely to Appreciate”

Wozniak, Circa 2004: Google’s Value Is “Not Likely to Appreciate”

Steve Wozniak, two years later

It’s been fun to watch the normally exuberant tech press go through the rationalization process of what went wrong with Facebook’s IPO, starting with claims that Friday’s flat opening meant the IPO was perfectly priced to outright ignoring the story. It’s been almost as much fun as watching the business press declare Facebook dead on arrival.

Before we dig too deeply into either discussion, let’s remember that the same doubts, along with the same proclamations that an issue had chilled the tech IPO market, were being bandied about eight years ago in the days after Google went public.

”I’m not buying,” Apple Computer co-founder Stephen Wozniak told The New York Times in August 2004. ”Past experience leaves the taste that a few people – never ourselves – will make out the first day, but that it’s not likely to appreciate a lot in the near future or maybe even the long future.”

Google, as we all know, now trades at more than $600 per share, up considerably from its first-day close of $110 in 2004. That’s despite technical glitches that delayed the IPO (much like Facebook faced technical glitches that delayed the start of trading on Friday) and jaws dropping when it first announced its initial pricing, which valued the company at $36 billion on its first day of trading.

“The price range – stunning even by Silicon Valley standards – is based on the assumption of continued rapid growth by Google, whose revenue has soared from $439.5 million in 2002 to $1.46 billion last year and which had a profit of $105.6 million in 2003,” The New York Times wrote in 2004. “But Google’s dazzling growth has lately shown signs of slowing. And the popularity of its search service has attracted a range of competitors, with others, including Microsoft, soon to follow.”

The takeaway is simple: Stocks go up and stocks go down, and we’d be making the same point if, rather than having dipped below its IPO price, Facebook rose to dizzying heights in this first full week of trading: The life of a publicly traded company, particularly one with a market capitalization of more than $100 billion, is long. It’s way too early to call Facebook a success or a bust. For that matter, it’s arguably way too early to call Google a success or a bust.

Woz photo by Scott Beale/Laughing Squid.

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