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 COLUMN
Predicting events is hard, especially predicting those events before they happen BEFORE PREDICTING that Bill Gates will get "retired" next year, let's go over some of my favorite past predictions.
In 1996, I predicted the Internet would gigalapse -- lose a billion user-hours in one outage. The largest outage was only a 118 megalapse. So I ate my column. In 1997, watching telephone gigamergers following the Telecommunications Act of 1996, I predicted a Telecommunications Act of 1997. I figured the only thing worse than a few big, regulated monopolies is fewer bigger, unregulated monopolies. Well, um, the mergers continue to this day. In 1998, I predicted the takeoff of what Larry Ellison called "network computers." Personal computers are passé in the Post-PC Era. But they weren't passé enough in 1998 to make Larry and me right, yet. In 1999, I predicted the Internet stock bubble would burst on Nov. 8. Well, it didn't appear to burst. Through Dec. 11, Internet stocks appeared instead to have inflated another one-third. Appearances aside, I stand by this prediction. I still predict the Internet stock bubble will burst on Nov. 8, 1999. Stranger things have happened. For example, take recent initial public offerings (IPOs). Akamai (www.akamai.com) is my favorite. It's a 15-month-old, 250-person, MIT-born Internet software start-up that went public on Oct. 29. On Dec. 11, it was valued at an astounding 17,260 times revenues (since inception). Its billionaire founders no longer show up for work at MIT, where, according to Michael Dertouzos, director of the Laboratory for Computer Science, "they have called in rich." Compare Akamai to Inktomi (www.inktomi.com), a competitor, which I touted here on July 12. Inktomi's price-revenue (PR) ratio was only 440 on Dec. 11. Only 440? Keep in mind that a company's PR ratio is its share price times shares outstanding divided by annual revenues, not to be confused with the often quoted price-earnings (PE) ratio, which like many Internet companies, Akamai and Inktomi don't have. Those of you interested in Internet governance may have noticed in The Wall Street Journal last week that there is a Queen of the Internet. She is Mary Meeker, software analyst for the investment bank Morgan Stanley Dean Witter (www.msdw.com). She will get a $15 million bonus this year for helping win the IPO business of companies including Akamai. How will Meeker rate Akamai in coming weeks? Assume she concurred in pricing Akamai at $26 for its IPO on Oct. 29. With Akamai selling at 9.4 times that, shouldn't Meeker advise investors not to buy, not to hold, but to sell Akamai? Wall Street insiders say she'd end up in the East River. So, how does Akamai get from a PR ratio of 17,260 to a PE ratio near, say, Microsoft's, which on Dec. 11 was 62? Perhaps there will be a lesson from Beanie Babies, to be discontinued on Dec. 31, 1999. Well now, I was proven right about one thing on Nov. 8: Microsoft is guilty of being illegally anti-competitive. I've been writing that since 1991. I was wrong, however, to predict here on Feb. 16, 1998, that Bill Gates would have an Antitrust Epiphany, like his Internet Epiphany of 1995. Turns out I gave Gates too much credit. He has defiantly led his company into a morass of litigation. It's the classic outgrown-founder syndrome. So I predict that, during 2000, Gates will be "retired" by his board to make room for a more levelheaded CEO. Steve Ballmer? Technology pundit Bob Metcalfe is levelheaded, but knows nothing about today's stock market, and has stopped eating columns when his predictions appear to be wrong. Encourage him with e-mail to metcalfe@idg.net. MORE > SPONSORED WHITE PAPERS 
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