Apple’s 1980 public offering came more than half a decade before Microsoft’s 1986 IPO, eras of technology before Amazon’s 1997 flotation, Google’s 2004 IPO, or Facebook’s 2012 public market kick off.

Heading back in time as we are, we lack readily-accessible S-1 documents that the younger entrants to the group have posted. Instead, in our look back at Apple’s IPO days, we’ll deal with the firm’s (similar to our Microsoft jaunt).

Follow Crunchbase News on &

So what was Apple’s story as it raced to the public markets?

Apple Back Then

When you think about Apple today, you probably conjure up the image of an iPhone, or an iPad, or your hatred of iTunes. Given how successful the company’s current product cycles have been, it’s almost too easy to forget that there was an Apple before the iPod

However, back in 1980, there was no such mix of consumer gadgetry pouring out of Cupertino. Apple sold computers.

From its prospectus, here is how Apple described its personal computer business:

The Company’s principal product is the Apple II personal computer system. Apple II systems in typical configurations may be sold for suggested retail prices as low as $1,850 and up to $5,000 or more […] As of October 31, 1980, Apple had sold approximately 131,000 Apple II computer mainframes. In May 1980 the Company announced the introduction of the Apple III.

The Apple III cost comfortably more than the Apple II ($4,300 to $7,800, according to the document). Apple also noted that “approximately 100 independent vendors have developed applications software for use in connection with Apple computers.” That’s an early draft of “there’s an app for that” that the iPhone .

In addition to computers, the company noted its peripheral business. That revenue stream included “video monitors, disk drives and printers,” with a disclaimer that some of those peripherals may be “manufactured by others.” But the document’s focus was clear: Apple was a computer company, not a peripheral shop. As a computer company, it sold two main types of PCs: one aimed at consumers, and one aimed at businesses in the form of Apple III. (That the Apple III would was not yet known.)

So how lucrative was the PC business back in 1980? It turns out that it was very lucrative.

Stellar Numbers

We live in the era of recurring revenue. Microsoft and Apple have both come to appreciate subscription income as well. Apple wants to sell you Apple Music every month, and Microsoft wants you to subscribe to Office. But back when both companies were just going public, one-off sales drove revenue, which was a very profitable sales strategy.

Turning again to its IPO prospectus, observe the following set of numbers detailing the company’s financial performance leading up to its debut:

There’s a lot in the image, so let’s walk through it together.

Reading left to right, Apple didn’t quite manage $1 million in sales during its first, approximate fiscal year. It still generated net income of $41,575, which isn’t too shabby given how young the company was.

Moving temporally forward, Apple put up more than ten times the revenue result in its fiscal year ending on September 30, 1978. And, notably, its net income grew by far more than ten times. So the company’s revenue and profit grew. Additionally, its net profit margin expanded. That’s about as good as it gets in terms of growth.

By the next year, Apple’s revenue expanded by more than six times and its profit grew a bit faster at 6.4 times. In its fiscal year ending September 26, 1980, Apple doubled its revenue and profit.

For fun, track how close to 10 percent Apple’s net income is as a percent of its revenue through time. Impressive, right? The company today is even more impressive. Apple’s net income as a percent of revenue? Just over 19 percent.

So during its infancy, Apple quickly grew while increasing profits. The company would later fall into difficult financial times, most famously culminating in the return of Steve Jobs as , and later CEO. Eventually, the company also took on a massive from Microsoft.

But, at the time it went public, Apple was piling up net income.

Who Owned What?

Apple went public at $22 per share, raising about $100 million in its debut. The firm itself raised about 88 percent of the total, with other shareholders taking in the rest. For fun, here’s how the math worked out:

What was the company worth at the time? As noted before, with companies that went public back in the mists of time, there are far fewer digital records to be had. Happily, venture capitalist Keith Rabois :

Approximately $1.7 Billion in 1980 dollars. Apple went public on December 12, 1980.  I have not been able to find the exact marke[t] cap on that day (just the price per share), but as of December 30, 1980, the market cap was $1.7 Billion.

Quick math on the total Apple shares at the $22 price kicks out a lower number, but we can safely put it somewhere near Rabois’s figure. Regardless of the exact market cap, we know Apple had $11.7 million in trailing profits and was doubling revenue. Yet that growth still placed its value at less than $2 billion. It’s a fact to keep in mind when looking at .

Regardless, who owned what? Here’s the doozie of a dossier:

Does 15 percent seem light for Jobs? Recall that when Box went public quite recently (in terms of Apple time, at least), CEO Aaron Levie .

Coda On Profits

What happened next at Apple is well-tread history. There’s no need to recount it here.

But something that I did pick up on writing this short series with you all is the power of market adoption. The companies that became the Big 5 tapped into mammoth demand and managed to (Amazon aside) quickly tap a profitable vein.

Now, you can build an incredibly valuable company while losing money. But it seems that those firms that become the biggest didn’t have to.

±õ±ô±ô³Ü²õ³Ù°ù²¹³Ù¾±´Ç²Ô:Ìý

Living in the post-Snap IPO era as we now are, it’s a great moment to look back at Facebook’s public offerings. After all, Snap is a key Facebook competitor and a prior acquisition-target for Big Zuck.

But it wasn’t that many years ago that Facebook was the Snap of its day: The social property of note, with questions regarding its financial future at least partially unanswered. So let’s rewind the clock and take a look at Facebook’s IPO.

2012

Facebook’s first S-1 is dated . Its final S-1/A was filed of the same year. The firm went public two days later on the 18th.

Follow Crunchbase News on &

In the end, Facebook settled on a $38 per-share price after a positive pricing cycle. As Forbes , the company both raised its price above-range and threw in more shares:

Facebook priced at the top of its $34 to $38 per share range, showing the strong investor demand for the stock. This week Facebook  the price range of the offering from a range of $28 to $35. Then the company  the size of the offering from selling shareholders. The Menlo Park, Calif. company is selling 421 million shares, 180 million from the company and 241 million from selling stockholders.

You can quickly do the math yourself: $38 per share times 421 million shares works out to a smidge under $16 billion—an incredible IPO sum. However, the firm only collected a portion of that total, as the final clause in our quote notes. The company’s 180 million shares worked out to a smaller $6.8 billion sum.

Still, the aggregate value of shares sold in its IPO was staggering, as was the valuation Facebook settled on: . Media coverage wasn’t kind at the time to the figure, despite investors being willing to buy the company’s shares at the price.

The Verge, for example, : “Can Facebook live up to its $104 billion valuation?”  The article also featured the following URL slug: “facebook-ipo-peaked-overpriced-stock.” That’s plain enough.

Around the same time, , noting that Facebook’s IPO was the “third largest IPO in U.S. history,” argued that the social company’s rich valuation implied that the firm would “likely need to add bold new revenue streams to justify the mammoth valuation.”

How fair was that skepticism? Let’s find out by looking at Facebook’s then-current financial performance.

The Financials

For our work today, we will employ Facebook’s  It includes the company’s Q1 2012 results that were unfinished in its earlier filings.

What is immediately remarkable about Facebook is that, unlike nearly every technology company pursuing an IPO today, it sported both revenue growth and rising profits. (So far, only one of the four companies in the Big 5 that we have examined was a money-loser at the time of its IPO. And the exception is Amazon, which remains an exception to this day.)

In fact, observe the following chart showing Facebook’s remarkable trailing quarterly results:

(Drilling a bit further, Facebook had very little share-based expense in the then-year-ago first quarter (2011). Deduct that cost from the company’s 2012 first quarter, and its profit rose, in case you noticed the year-over-year profit results and found them wanting.)

Regardless, Facebook was going public with a history of revenue growth, GAAP (meaning inclusive of all annoying costs) profits, and its first seasonal decline in revenue that we can see.

Dialing back a bit, from 2010’s fourth quarter to its first quarter in 2011, Facebook’s revenue stayed flat, implying that it managed to meet its holiday-bolstered quarter in the following period through sheer growth. From 2011’s holiday cycle to 2012’s opening three months, Facebook shrunk.

We care about Facebook’s first seasonal slip as Snap, our modern comp of sorts for Facebook’s IPO days, saw in its revenue far earlier in its growth curve. Snap is barely over the $150 million-per-quarter revenue milestone and saw seasonality-induced revenue declines in its first quarter. Facebook was multiples larger before it had the same issue; how bullish that was for Facebook, or how bearish today’s situation should be for Snap, is up to you.

Returning to our question of how fair media skepticism was for Facebook’s IPO, let’s again read The Verge and TechCrunch. First, , from its Facebook IPO coverage:

When you compare Facebook to other public tech companies, its valuation also looks way out of whack. The company earned around $1 billion last year, which means its price to earnings ratio, a common method for evaluating stocks, is roughly 100 to 1. Google currently trades around 20 to 1 and Apple, far and away the most profitable tech company of our times, is trading around 16 to 1.

And TechCrunch : “A $104 billion market capitalization puts Facebook at more than 100 times its trailing earnings.”

In short, both publications harped on Facebook for being expensive on a price-earnings basis when compared to its already-public rivals. This is notable for a few reasons when we stack 2012 against the current market:

1. Facebook was judged as not profitable enough, growth aside. Snap, in an imperfect but directionally-useful comparison, was judged at IPO only on growth–staggering losses, and recent gross-margin-negative performance be damned.
2. It was thought to be reasonable not only to demand that tech companies be profitable at IPO, but that they should, perhaps, stack up (at least somewhat) next to far more mature public companies in terms of profit metrics.

The market was therefore very different in 2012 than it is today—something I think that we forget. Reading through coverage of Facebook’s IPO, it’s obvious that Snap would not have been able to go public in 2012. The market would not have tolerated something so unprofitable to sport a sky-high valuation so close to the 2008 recession. There simply wasn’t the same appetite for risk.

So Facebook had to go public under stricter rules. That isn’t some sort of punishment, per se, but that market conditions at the time did bite Facebook in the ass eventually. Despite putting up $1 billion in trailing profit, Facebook was in for a rough ride after its shares started to trade.

The Aftermath

Returning to our chewing of contemporary media reports, here’s of Facebook’s results just over ten days following its IPO: “Facebook Has Lost About $35 Billion In Value Since IPO As Shares Dip Below $29.”

The company went public at $38, as you recall. The company’s ensuing share-price declines led to a dramatic spurt of negative coverage of the company. Headlines like “” came out as Facebook’s share price continued to fall.

Facebook didn’t stop deflating until it slipped under the $18 per-share mark. It was a staggering reversal of trend. Recall that Facebook raised its IPO price range before pricing at the very upper-end. The fall from $38 to $18, for example, is just over 50 percent.

Of course, the time in purgatory didn’t last forever. In mid-2013, Facebook shares  following its  and never looked back, at least as of the time of writing.

What went wrong for Facebook and what eventually went right for the company have the same answer: mobile; if Facebook was going to manage a switch to the mobile world was, for some time, an open question. Investors were worried, and fear leads to a lower share price.

And so when Facebook answered the mobile question, that same fear was mitigated. And its share price recovered. Before we go, let’s remind ourselves of what happened in that critical 2013 spring quarter.

Coda: Mobile Victory Leads To Corporate (Value) Salvation

If you will allow the self-quote of Facebook’s Q2 2012 earnings for TechCrunch:

Mobile income as a percentage of ad revenue totaled 41 percent, up 11 percent from the preceding quarter, when it totaled 30 percent. In the final quarter of 2012, mobile ad income was but 24 percent of the total advertising top line. Facebook has proven that it can monetize its growing mobile usage in a big way. Investors will be satiated in that concern.

Facebook later noted that mobile revenue will soon outstrip desktop incomes. The company also reaffirmed that Instagram will monetize in the future, largely through advertisements.

Frankly, in my view the 41% figure is quite impressive and unexpectedly strong. However, we should not take as indicative that all desktop Internet giants will be able to monetize at similar levels in mobile settings. Facebook data on its users is nearly without compare, and likely provides it with a key competitive advantage in how it can deliver targeted ads to users on the go.

There are two takeaways from this coverage:

1. Facebook managed to significantly expand its mobile ad revenue percentage for the second time (sequential).
2. The company said that its mobile incomes would best its desktop revenue.

It seems that investors, at that juncture, bought that Facebook was going to do well in a mobile world (Instagram aside). They were right of course. The company crested its IPO price following that earnings release. Today it trades for more than $167 per share.

The company is still profitable, still growing, and can claim the mantle of mobile-first.

So much for its post-IPO chop. Tying this up neatly, what can we apply from the Facebook lesson to Snap? Nothing. Snap still loses so much money to compare the firms past our superficial alignment would be silly. GAAP profits are an anagram for “the ability to control your own destiny.” On that front, Snap has a long way to go.

Homework: How well did Microsoft do with its Facebook investment . This .

±õ±ô±ô³Ü²õ³Ù°ù²¹³Ù¾±´Ç²Ô:Ìý

Microsoft went public in 1986 for $21 per share, a price that was both higher than what many expected it to command, and a figure that was than Bill Gates had wanted.

The firm was profitable, had money in the bank, and was not under pressure from external investors to go public. Essentially, Microsoft was the complete opposite of what we often see in the current tech cycle: unicorns limping across the finish line, nursing haircuts, thirsty for cash.

Follow Crunchbase News on &

Our series of brief looks at the IPOs of tech’s biggest players have thus far included Amazon, which booked shocking growth and comparatively slim losses, and Google, which, before it sprouted a parent company, was merely a profitable juggernaut. Microsoft, debuting just over a decade before the bookstore, went public in a different era.

1986, after all, was the year in which Metallica . By 1997, when Amazon went public, Metallica was short hair and all. If that doesn’t illustrate the different periods under which the firms did go public, nothing will.

For Microsoft, we’ll start with a look at the company’s roots. We will then look at its IPO numbers and wrap up with notes. Let’s go!

A Short Pre-IPO Preamble

The first milestone Microsoft lists in its comes in 1975 when the firm built and sold a “BASIC Interpreter.” In 1980, the document later noted, the firm began to build for IBM’s “Personal Computer.” In 1981, the IBM Personal Computer came out with Microsoft’s MS-DOS.

In 1983, Microsoft sold its first mouse and released Word. In 1985, it started selling Excel. And, later that same year, the company started “shipping Microsoft Windows, a graphical operating environment that runs on the Microsoft MS-DOS operating system.”

In 1986, Microsoft went public.

A Code On IPO Timing, Venture Capitalists, And Control

That Microsoft waited 11 years from its founding date to go public is notable. It smacks a bit of the modern unicorn, a cohort that can take far longer to go public than the for a software company.

But Microsoft held a couple of cards in its hand that helped it avoid going public: it never lost money on an annual basis, and it was never materially beholden to venture capitalists to help it grow (mostly). Therefore, its path to IPO was devoid of the normal pressures of falling cash reserves and impatient investors.

On the first point, a that took place at Harvard is worth our time. A  of a Gates’ remarks is illustrative. Here, Gates discusses the company’s history of operational profit:

We didn’t have to build any factories, we were cash positive, and we didn’t have a year where we lost money.

So that’s the profit point. Gates did also note, in the same answer, that there was a time where he was not paid by the company. Therefore, we should take the profit point with some salt. But the fact that the company could self-fund is fair either way.

To our second point, :

We eventually gave away, or sold, 5% of the company for a million dollars at a 20 million dollar valuation, just to get a venture capital company to join our board and give us some adult advice about various things, which was quite helpful. We picked one in the valley, a guy named Dave Marquardt came on our board and did a fantastic job.

That money sat in the bank, and it’s still in the bank today, so it was not for anything to do with capital, but rather just to join the team.

To the credit of the company, I initially thought that its Crunchbase profile was wrong. It lists a single, million-dollar investment from Technology Venture Investors. And that’s what Microsoft took on before its IPO.

In short, Microsoft grew, made money, launched Windows, and then went public. Let’s get to that last bit.

Private Growth

In the following paragraphs, listed dates and time frames hew to Microsoft’s fiscal calendar, which ends at the close of June. In short, Microsoft’s fiscal fourth quarter of any given year is the same as the calendar second of the same. Similarly, the third calendar quarter of any year is the first quarter of Microsoft’s next fiscal year. If you don’t like it, join the club.

Heading into its IPO, Microsoft’s revenue grew quickly in the 80’s. The firm booked just under $25 million of top line in 1982, which roughly doubled in 1983, and doubled again in 1984. The firm’s growth slowed to around 40 percent in 1985.

Through all of that, and per our prior Gates notes, the company booked profit. Its net income grew from $3.5 million in 1982 to $24 million in 1985. In the six months (calendar) that closed out 1985, the firm netted a stronger $17 million.

According to its IPO prospectus, the firm had $38.2 million in cash on hand at the time it debuted, similar to the proceeds it expected to garner in its IPO ($39.4 million, before certain expenses). If those figures sound small, recall that this was the era of Master of Puppets, not Reload, and (one year before Google’s own IPO).

So what is a company worth that just broke through the $100 million revenue threshold with a long track record of profits?

Prepare to be wrong.

Public Pricing

Microsoft’s IPO process has a storyline worth repeating as it will underscore our point about the difference in eras. Microsoft did not command a Snap-esque revenue multiple in the dozens of dozens of dozens. Instead, it went for something closer to what unprofitable current-era SaaS companies would be content with.

According to published in the Journal of Case Research in Business and Economics, Microsoft’s path to IPO entailed one of its founders working to depress its initial pricing. It didn’t work, really, but observe the following:

A bull market had been in progress during this time, and now the underwriters were suggesting a price range of $17-$20 per share, but the preliminary prospectus indicated a possible offer price of $16-$19 per share. (New York Times, 1986) In an unusual move for corporate executives, Gates insisted on and got the lower price range. He felt secure with a minimum price of $16, believing that at this price, there was little risk of having to lower it, and he was uncomfortable with the $20 price because it would push Microsoft’s market value above a half billion dollars, which he believed was too high.

Microsoft eventually did price above $20, landing at $21.

The company’s post-IPO valuation seems laughable compared to its then-current revenues, and, naturally, to its value today. But let’s be precise at what is funny. :

Its shares, offered at $21 on March 13, zoomed to $35.50 on the over-the-counter market before settling back to a recent $31.25. Microsoft and its shareholders raised $61 million. The biggest winner was William H. Gates III, the company’s co-founder and chairman. He got only $1.6 million for the shares he sold, but going public put a market value of $350 million on the 45% stake he retains.

Just using Fortune’s rough math, 45 percent of some whole worth $350 implies that the full canoe is worth around $777 million. At that sort of multiple, Snap wouldn’t be able to afford a Snapple.

Afters And Laters

Regardless, Microsoft’s IPO did well, kicking off the public life of the third most valuable tech company in the world, and the third most valuable company in the world.

All that was to come: From the , to , to the , to through , , and , , , , and the success of and its commercial cloud, the road ahead was long.

Regardless, its foundation was already in place. Microsoft had shown that making money off software was a pretty good business.

Apple and Facebook, two other incredibly fun IPOs, are next on our list. Follow so you don’t miss out.

±õ±ô±ô³Ü²õ³Ù°ù²¹³Ù¾±´Ç²Ô:Ìý

Google, , a holding company it created, went public in 2004. At the time, the firm frankly told investors in its that it was “not a conventional company,” and it did “not intend to become one.”

Follow Crunchbase News on &

For Google, the unconventional attitude worked, and it worked well. But before its IPO over ten years ago, the company’s future was hardly certain. The climate that Google went public under is almost hard to imagine: In the pre-unicorn era, the most valuable Internet company wasn’t even worth $50 billion (as we’ll see). Today, there are private tech companies worth more than that.

In the end, Google went public worth around $23 billion. That number should sound familiar, as it is a mere $1 billion from set earlier this year.

To understand Google’s debut, we have to turn the clock back to 2003. Let’s go:

2003

Before its IPO, Microsoft and Google reportedly discussed doing something together. Details are vague, but Ars Technica published some interesting details in late 2003, the year preceding Google’s debut.

Leaning , here are the words used to describe the potential for a Microsoft-Google link:

Sources are saying that , pursuing options ranging from a kind of merger to an outright takeover. It appears that their overtures failed to materialize any deal, so now the Redmond will have to wait; Google is headed in the IPO direction, and if there’s a merger to be had, it’s likely going to be with a post-IPO Google.

The same Ars Technica piece goes on to report that, yes, Google “appear[ed] to be in preparation to convert to publicly-traded status,” a result that would be “huge.” That wound up being incredibly correct.

(For fun: In 2006, Microsoft launched Windows Live search. In 2007, it was renamed Live Search. It was later rebranded Bing in 2009.)

How close Google and Microsoft ever got to a deal is now immaterial, because, on April 29, 2004, Google

Google Up Close

The firm’s initial S-1 would later be supplemented with another quarter’s financial results as the IPO came together during 2004, but it’s worth noting that, in the original document, the company reported steep growth and growing GAAP profits.

The company’s later filings have an even fuller picture of that expansion, as they included the quarter ending June 30. Here’s :

As you can quickly see, Google was growing at a tremendous clip, regarding its revenue and profit, when it filed. The firm’s first to second quarter sequential growth rate was just 7.5 percent, but the year-over-year comparison Google set in the second quarter of 2004 calculates to a 181.6 percent growth rate.

A Look Back In IPO: Amazon, The Giant In Progress

And as Google’s revenue grew, its net income grew as well. In the first half of 2004, Google’s revenue totaled $1.351 billion, from $559.8 million in the first half of 2003. Profit grew to $143.0 million in the first two quarters of 2004, from $58.9 million during the first six months of 2003.

(Keep in mind as we go on that Google winds up being worth less than Snap at its IPO.)

Google had something else at the time that we’d be remiss to mention before diving into the pricing saga that surrounded its IPO. The firm had a bucket of cash — nearly $550 million — and limited liabilities.

It isn’t hard to guess from the numbers that Google was growing quickly under its own steam–the search engine didn’t really need the IPO proceeds to fund its business. Doubling down on that point, the Founder’s Letter is illustrative again: “Google has had adequate cash to fund our business and has generated additional cash through operations.” Correct.

Pricing Dance

What was Google worth? The final number was hard to uncover at the time it went public.

To wit, Google’s indicated that the firm wanted to raise as much as $2.72 billion in its IPO. Later pushed that number as high as $3.989 billion, a valuation that entailed a per-share price of $135.

Google’s IPO aspirations were eventually cut down to allow the firm to cross the finish line. The following from July 27, 2004, describes the company’s mid-summer 2004 pricing moves:

The popular Internet search company, which is attempting to sell shares to the public in an unconventional auction, said in a filing with the Securities and Exchange Commission yesterday that it expected its shares to sell for $108 to $135 each.

That would value the company at $29 billion to $36 billion, putting its market value just below the $38 billion value of Yahoo, a larger and far more mature Internet company. The most valuable Internet company, eBay, is worth $49 billion.

This analysis is interesting for a few reasons.

1. Google failed to maintain that hoped-for price range. The company’s final IPO price, $85, was under range.
2. Yahoo was worth $38 billion.
3. The largest Internet company, at that time, was worth less than Uber is today.

A different era.

Regardless, Google went public at $85 after cutting the number of shares offered to 19.6 million from nearly 25 million. The company’s valuation wound up at $23 billion.

Doing some quick math, at $23 billion, Google priced at a trailing revenue multiple of just over 10. That’s high by today’s SaaS standards (Google wasn’t SaaS as we think of it), but it becomes incredibly cheap by modern standards when you realize that you can calculate Google’s PE ratio at the time (around 120). It was already profitable, and profitable revenue is worth more than unprofitable revenue—all else being held equal.

Despite the fact that Google would have been wildly healthy by today’s standards, it isn’t hard to find naysayers from the time. This lede, for example, :

Google said Wednesday it will go public at $85 a share, paving the way for the widely awaited but troubled stock offering to finally stumble to market on Thursday.

Good heavens, CNN Money!

The point, however, was that Google thought it was worth more than the market did at the time, hoping for that $135 per share and ending up with just $85. In the end, both parties were wrong. Google was likely cheap at $135 per share, the upper-end of its highest range.

But IPOs are both magic and math, something that Google took to the next level with how it went public.

The Dutch Auction

Google, not content to do things along normal lines, went public using a Dutch auction. If that sounds unfamiliar, don’t feel bad. Aside from Google, I can’t recall a company of real note that has used a similar process since.

And, as we’ll see, perhaps there’s a reason for that. Regardless, back in 2004, the company’s Dutch auction was big news. Forbes who called the choice “definitely the biggest story” of the IPO.

That wasn’t correct; the strength of Google’s core business was the biggest story, but the quote shows how odd Google’s call was at the time.

The does a fine job detailing what a Dutch auction entails:

In a Dutch auction, a company reveals the maximum amount of shares being sold and sometimes a potential price for those shares. Investors then state the number of shares they want and at what price. Once a minimum clearing price is determined, investors who bid at least that price are awarded shares. If there are more bids than shares available, allotment is on a pro-rata basis–awarding a percent of actual shares available based on the percent bid for–or a maximum basis, which fills the maximum amount of smaller bids by setting an allocation for the largest bids.

As CNBC , the model may “[t]ake the short-term gains away from Wall Street and big money and give at least some ownership” to regular people. However, Google’s use didn’t help Dutch auctions take off.

The CNBC piece makes two arguments that are persuasive as to why Dutch auctions didn’t pick up a host of fans following Google’s use. First, “[similar] auctions are risky,” especially if you might need some help driving demand. That isn’t a problem for the hottest IPOs, but they make up only a fraction of the total.

The piece goes on to argue:

The second reason is that Google’s offering wasn’t a real auction, but more of a hybrid. After all, there was clearly enough investor demand to price the stock at closer to $100, because that’s where the stock opened, but at the last minute lead underwriters Morgan Stanley and  dropped it to $85. The low end of the expected range had been $108.

Still, after all the stress and pricing work was over, Google opened well and took off.

Hindsight Is 20-20 (And Very Expensive)

Google had a good first day’s trading, bumping up 18 percent or so to just over $100 per share from its $85 starting point. The company’s all-time intraday low was $95.56, and its all-time lowest close was $100.01, .

After finally getting its IPO out the door, Google did well, and it has continued to do little else. The firm is now worth around $650 billion, second only to Apple. But placing second out of the Big 5 wasn’t a sure bet back then.

:

“It’s still expensive at these levels,” said Will Dunbar, managing director with Core Capital Partners, a venture capital firm with no stake in Google. “There will be substantial competition in the near future and that’s one of the things that gives me pause about the price.”

Janco’s Pyykkonen adds that he was hearing it was difficult for traders interested in short-selling Google to find shares to borrow from the banks and brokers involved in the auction. […]

And according to an informal poll on CNN/Money, 85 percent of more than 23,000 respondents said that they did not plan on buying shares of Google once it began trading.

±õ±ô±ô³Ü²õ³Ù°ù²¹³Ù¾±´Ç²Ô:Ìý

Amidst tech’s current rally, Seattle is enjoying the updraft. Amazon, one of the area’s two critical tech companies, is busy setting records.

Shares of Amazon, the ecommerce and cloud computing leader, have busily risen, recently cresting . That per-share price is up from Amazon’s 52-week low of $682 and change.

Driving that valuation is continued growth, improved cash flow, and widespread adoption of its cloud computing unit. As the company reported in its , its revenue grew 23 percent to $35.7 billion, and its trailing operational cashflow grew to $17.6 billion, up from $11.6 billion in the year-ago period. In that same first quarter, AWS grew its revenue from $2.6 billion to $3.7 billion.

Follow Crunchbase News on

All that and Amazon is said to , the , and has made overt overtures concerning Whole Foods, where it has logged . Even for today’s platform ecosystem, Amazon’s footprint is broad.

Today, And Back Then

But it wasn’t always so. Today, let’s turn back the clock and peek at Amazon’s S-1 document it filed in 1997. What did Amazon look like back then, and if you could go back in time, could you convince yourself to bet the house on the tiny company?

Perhaps, but we’re looking backward for more reason that curiosity. Instead, just as it’s interesting to read pitch decks from companies that have seen become behemoths, it’s worth our time to examine the S-1 documents of the now-giants. What can we see in their numbers that might help us better understand later offerings?

To that end, let’s go back a few decades, to the year in which the first Harry Potter book was published, and Metallica released Reload.

1997

Before Alexa, Prime, and reasonably quick Internet, Amazon .

Back then, Amazon was a simpler entity. Its S-1 is plain about what it did back then: “Amazon.com is the leading online retailer of books.” To underscore that “leading” status, Amazon included some metrics in the following paragraph so small that they feel quaint by today’s standards: “Average daily visits (not “hits”) have grown from approximately 2,200 in December 1995 to approximately 80,000 in March 1997[.]”

The company explained its market by detailing the scale of the book market. To wit:

The worldwide book industry is large, growing and relatively fragmented. According to Euromonitor, U.S. book sales were estimated to be approximately $26 billion in 1996 and are expected to grow to approximately $30 billion in 2000, while worldwide book sales were estimated at approximately $82 billion in 1996 and are expected to grow to approximately $90 billion in 2000.

Notably, Amazon’s quarterly revenue is now larger than the United States’ book industry was per year back in those days.

Back in 1997, Amazon was tiny, with just 256 employees listed at the end of its most-recently completed quarter. That figure, however, was up from 11 in the fourth quarter of 1995. But despite its modest employee scale, and its tailored industry focus, Amazon successfully went public at a young age.

How? Let’s take a look at the numbers.

Efficient Growth

While many companies spent dotcom money on comically silly things, when Amazon went public it was a surprisingly efficient shop. Here, in screenshot form, are its performance notes from its S-1:

In case the format isn’t suited for reading, we can translate a little bit.

In 1996, Amazon grew its revenue from $511,000 to $15.75 million. In percentage terms, that works out to 2,982 percent or so. Returning to our point concerning efficiency, Amazon did lose more money in 1996 than it did in 1995. Its losses grew from $303,000 to $5.78 million.

But when we stack that next to a modern rule, say, the Rule of 40 — that a company’s growth rate plus its profit margin should equal 40 — Amazon was destroying benchmarks. And during its period of hyper-growth to boot.

That Amazon was so not-unprofitable at its then-young age at that particular pace of growth is impressive. The company was certainly riding a secular shift in the economy towards digital commerce, but the company, at the time of its IPO, was in solid shape.

Even more so, Amazon’s growth was hardly seasonal. As you can see in the above set of statistics, Amazon grew its revenue from $4.17 million in the third quarter of 1996 to $8.47 million in the fourth of that year. But the first quarter of 1997 effectively doubled the holiday quarter’s tally with $16 million in top line.

Or more simply, in the quarter before its IPO, Amazon posted more revenue than it had in the preceding year. At that pace of growth, Amazon must have been worth billions, and in the process of raising hundreds of millions in its IPO, right?

No.

A Modest Offering

Something fun about covering 1997 news is that we get to quote 1997 news. So , after noting that its debut had “[s]ilenc[ed] any doubts about its chances on the public market:”

Initially, [Amazon] had been set for a $12-to-$14 range, then got bumped up to $14 to $16 before the company’s investment bankers settled on the $18 price. […] The IPO raised $54 million for Amazon, giving the company a market value of $438 million.

Amazon closed at, again quoting CNet, “23-1/2.” It was a good result for the Internet shop, which would go on to split several times before the dotcom boom went dotcom bust. Today, decades later, Amazon is worth around 1,000 times as much as it was at the time of its IPO. Google Finance pegs the current value of Amazon at $463.55 billion, making it one of the smaller two of the Big 5, but it is still impressively up from its initial public valuation.

The scale of its IPO, however, shouldn’t be viewed as humility. In a great look at Amazon’s run-up to its IPO, that Amazon’s prep was incredibly accelerated:

Way back when Bezos was taking the company public, he was already defying convention. […] In early 1997, Amazon was coming off a year in which it generated less than $16 million in revenue. But in March of that year, Bezos gathered his top brass as well as the underwriters and lawyers together in Seattle to get an IPO rolling.

CNBC goes on to note that Amazon and its hired hands then got its S-1 together in 12 days.

Competition

We could talk about a host of other points from its S-1 and IPO, including the company’s cash position, high cost of revenue (compared to the software companies we spend too much time observing), and even its declining net loss as a percent of revenue. But its competition is the most interesting.

Recall how quickly Amazon was growing at the time of its IPO? The firm put some of the credit for that on its nascent industry:

The online commerce market, particularly over the Internet, is new, rapidly evolving and intensely competitive, which competition the Company expects to intensify in the future. Barriers to entry are minimal, and current and new competitors can launch new sites at a relatively low cost.

In that “new, rapidly evolving” Amazon saw its competition in three buckets:

1. “[V]arious online booksellers and vendors” that might compete with it directly.
2. Big tech companies who “derive a substantial portion of their revenues from online commerce, including AOL and Microsoft Corporation.”
3. The brick-and-mortar crew, namely “large specialty booksellers, with significant brand awareness, sales volume and customer bases, such as B&N and Borders.”

Amazon goes on to note that both the two physical booksellers had, at the time, “announced their intention to devote substantial resources to online commerce in the near future.” Oops! But recall that Amazon was a mote of dust, in terms of scale, at the time.

In Sum

Incredibly fast revenue expansion, efficient growth, and an early IPO would make Amazon an oddity in today’s market, where companies wait longer to go public while pursuing less profitable paths to growth by the time they file.

That’s likely the most useful thing to keep in mind: What about Amazon is different than what we see today? And do those differences highlight a weakness in modern tech shops looking to go public, or do the underscore why Amazon was an outlier after its flotation?

±õ±ô±ô³Ü²õ³Ù°ù²¹³Ù¾±´Ç²Ô:Ìý