(This is chapter 23 of my ongoing memoir of the Internet industry.)

In July 1998 a three-year-old Internet streaming audio startup called Broadcast.com began selling shares on the NASDAQ stock exchange. The shares opened at $18 and shot up to $74 on the first day -- a stunning success, and one of the biggest first-day stock jumps in modern financial history.

Internet stocks had been exciting high-risk buys on Wall Street since Netscape's historic initial public offering in August 1995, but it was still a shock to see a small, little-known company like Broadcast blow the ceiling open. I had visited their site once or twice, but they didn't have much music and I figured they were mainly good for college basketball webcasts. Yet somehow Wall Street's many-to-many mind chose Broadcast.com as a super-winner must buy, and shot it to the sky on its first day.

Future anthropologists studying the strange event known as the dot-com bubble of the late 1990s must understand that there were two separate phenomena operating at once: there was a dot-com craze, and there was an IPO craze. The dot-com craze happened when it became the fashion for investors to take unusual risks on futuristic Internet companies with very hazy business models. More and more professional and amateur investors began playing the dot-coms, thought traditional and conservative investors naturally scoffed at the airy stocks. My savvy stepfather Gene had always enjoyed playing the stock market, and had made out very well over the years with blue chips like IBM and General Electric. He advised me to go ahead and work for a dot-com -- Pathfinder was a dead end, he said -- but said I should never, ever put my own money into one.

Playing the dot-com market had become a sport. My friend Dan Woods, former Pathfinder head of application development, joined Jim Cramer to become CTO of TheStreet.com, a highly reflective dot-com that reported in detail on the dot-com market while positioning itself for a huge IPO.

The IPO craze was a unique aspect of the overall dot-com bubble. This was a new trend for Wall Street: investors were suddenly more interested in what happened to a stock on its initial public offering day than in its long-term prospects.

The IPO thing was really a bit of a scam, and I never understood (even when I soon began profiting from the scam) why regulators allowed it. If you are an insider at Broadcast.com, or an early investor or a "friend or family", you get to buy a stock at $18 a share on opening day. You instruct your stockbroker beforehand to flip the shares as soon as they reach a certain threshold -- say, $58, or $68 (depending on your tolerance for risk).

The stocks are artificially priced low on opening day to ensure that they shoot up like a rocket. If you bought 1000 shares of Broadcast.com at $18 and flipped them at $68, you made $50,000.

1000 shares? Screw that. That's what the Assistant VP of Whatever's uncle gets. The Assistant VP of Whatever, on the other hand, gets to buy 10,000, and makes half a million. The management team and dozens of early investors make much, much more than that. Many lucky dot-com players and investors are still living off the instant wealth they made by flipping shares on IPO days between 1998 and 2000 (when the bubble finally burst).

The IPO scam was fully legal, even though it clearly undermined the very purpose of a Wall Street initial public offering, which is to fund a company, not to reward the individuals who have shares in the company. If Broadcast.com was worth $74 a share, the shares should have been priced at $74 a share. The underwriters who set the price at $18 did so precisely because they wanted to profit off the price jump. I still don't understand why this was legal (but then I don't understand why a lot of things are legal, and I also don't understand why a lot of other things aren't legal).

By any healthy business ethic, launching a company on the stock market to profit from the IPO is wrong. It's like marrying someone for the wedding night. Not that that probably doesn't happen often too.

Anyway, I wish I could say I took an ethical stand against the IPO craze. But I didn't. I got caught up in the fun and excitement. The NetGravity IPO had been a bust -- I only purchased half the 1000 shares I got as "friends and family", and flipped them for almost no profit -- but the experience left me hungry for more.

I began seriously thinking about a job-change when Charlie Thomas, a friend of mine and the former ad sales chief of Pathfinder/Time, jumped ship to join Mark Cuban at Broadcast.com. He urged me to interview for the sales/marketing tech team, which built prototypes and demonstrations for sales. I went to visit the New York sales office in their nondescript Chelsea building and liked what I saw. They made me an offer -- $125,000 a year, more than $20,000 above my salary at Time.

But there was a big problem: the IPO was over. I wanted to play the game, but a company can only go public once, and the big day was over. I stalled on the job offer and ultimately said no. I guess I was infected with IPO fever, by proxy.

I also just didn't want to leave the Time-Life Building. It was a cushy and homey place to work. I was now spending most of every day on the Time Magazine floor building a rudimentary feed system in Vignette Story Server and TCL to transfer Time's headlines to the Pathfinder main page automatically. My co-developer on this project was a pleasant young man named Andrew Arnold, who would go on to write the Comics column for Time Magazine. I never knew he was into comics; we just talked about feeds and TCL.

We worked in a circular office, and there was a fancy made-up desk with a bunch of studio lights and TV cameras pointed at it in the center. Every afternoon at 4:30 Walter Isaacson, now Time Magazine chief, would sit down and do a half-hour cable news broadcast.

Before this, I'd always wondered what it was like to be one of the busy people working behind a broadcaster during a news show. I always assumed there was something phony or put-on about the whole set-up. Here's the surprise: they did the show in our office every day, and nobody seemed to care. Walter sat in the center of the room and spoke inaudibly into a mic, cameramen and boom mics swirled around, making no noise (the cameramen always spoke in a whisper), moving almost like mimes, and we all simply ignored the commotion and went about our business. Nobody involved with the show ever instructed us as to what or what not to do, nor did they ever thank us for not making funny faces at the camera (I can't be the only one who was tempted).

The feed system Andrew and I were building was so cool we often forgot to notice the show. Our project was a success, though it would have been cooler if we had known about the universal XML-based feed format a computer scientist named Dave Winer was inventing right around this time. Our approach was basically to clump data into packets and take it apart. XML? Not quite. But Dave Winer created a very friendly and sensible standard called RSS that I wish we had used for the Time Daily feed.

1998 was a year of exciting tech innovation. E-commerce companies were starting to put together transaction systems that didn't make customers want to jump out of windows and that actually managed to work correctly more than 50% of the time. Meanwhile, early adopters were starting to buzz about a new search engine, something called "Google", which had a gorgeously blank front page and returned surprisingly good results.

My C++/Sybase/Perl/Java/TCL skills were in super-high demand in late 1998, and I knew I could join any Silicon Alley firm I wanted. I could have found some really smart company doing innovative things to help humanity, but instead I just kept watching the IPOs. In November 1998 a frankly dumb community website called TheGlobe.com -- they allowed members to build chintzy-looking "home pages" -- had the single most successful IPO in history. They opened at $9 a share and jumped up to $97. This had never happened before in any modern stock market. It was the greatest single day jump in the history of western finance.

TheGlobe.com? With a home page that looked like a toothpaste coupon? I didn't understand how they could be worth so much, just as I didn't understand how Broadcast could be worth so much. (In fact, these companies were on to something -- TheGlobe was an early prototype for MySpace, and Broadcast was an early prototype for YouTube).

I found another company that seemed to have much more substance, more of a real and grounded community. iVillage.com had begun as a message board for women on America Online and had grown under the feisty leadership of Candice Carpenter into Silicon Alley's most promising next IPO. The launch was scheduled for April 1999. My friend Paul Schrynemakers, a graphic designer for Pathfinder, had just left to become their art director, so I now had a connection there.

I had been enthralled by a Candice Carpenter speech at a conference earlier in the year. She was unlike any other entrepreneur. She spoke of her stewardship of iVillage in deeply personal and dramatic terms, and I related to her sense of "whole life" involvement in her mission. She spoke of forest retreats and rock climbing challenges as metaphors for work, and the Thoreau connotations pulled me in.

I also thought iVillage's IPO was going to be a big winner. They had everything TheGlobe.com had -- a strong community presence, an aggressive ad sales operation -- and also maintained loyal and enthusiastic message boards that really worked, mostly focused on "women's issues" like feminism and parenting.

I went down to the chic Chelsea office across the street from the Flatiron Building to interview at iVillage. I found a happily disheveled hive. I met Chief Financial Officer Craig Monaghan, a gruff Korean War veteran who'd come from Reader's Digest and was clearly the iVillage management team's designated "square". We got along very well.

He had an emergency, he told me. The web server operators -- the techies who kept the website alive day after day -- were in full revolt against their former manager, who had now been displaced. Nobody was currently in charge of the web server operation. The angry, overworked and neglected techies had a long litany of complaints, he told me, most of them probably justified, and they were now at the point of total mutiny, and refused to even hold peace talks until certain demands were met. They had the power to destroy the company's entire web presence.

It was certainly an unusual situation for a company that intended to go public in three months. That's why Craig wanted to move fast to bring me in. I would be the new boss of the web operations department, and I'd take control of the situation before it doomed the IPO.

It seemed like a situation out of Heart of Darkness by Joseph Conrad. After speaking to Craig I met Chief Operating Officer Alison Abrahams, who told me a different version of the same story. They were frankly desperate for me to join, and I was in a great position to ask for a good stock option deal. They offered me $110,000 a year with 25,000 stock options. I accepted on the spot.

I had a poignant and raucous farewell party with all my Time/Pathfinder friends. It was a big and well-attended event, and for once I felt truly popular and well-loved at my place of work. It's only when you leave, I guess, that you find out people liked you all along.



I look pretty excited in the blurry photos from that night, smiling big with Flora, Ariel, Vicki, Janice. We look pretty out of it because most of us were drunk, and whoever was taking the picture was probably drunk too. Oh, and there would be more drinking and partying in the months to come.