Partner With Us

Welcome to the third annual AtNewYork.Com 25, a list of the most important and interesting companies in Silicon Alley. Although this is actually the fifth holiday season that has come along since AtNewYork.Com began telling the world about Silicon Alley in 1995, it's only the third year in which the industry here has been established to the point that we've felt comfortable rating the achievements of local players.

But this was the hardest year yet to cull 25 deserving companies out of Silicon Alley to highlight. The reason is simple. Always a subjective listing, the AtNewYork.Com 25 has historically tended to reward ideas. In the early days of the local Internet business, ideas were all we had and AtNewYork.Com took it upon itself to analyze the best of the companies pursuing those ideas every year and single them out. But today we have 44 public companies worth billions of dollars. And these companies compete in enormous consumer and business-to-business marketplaces. Simply put, to make the list this year a company had to be big; it had to be a marketplace leader or damn near a marketplace leader in its space; and it had to have made some sort of interesting or important tactical, strategic, or financial moves to solidify or further its position in 1999.

And even following those criteria, pulling 25 companies meant leaving major companies off the list. While the top few were no-brainers for us, every other company represents at least one other company almost as deserving. Take the interactive services sector. There are many strong, important local companies with typically $80 million a year in revenue. And many of these companies are profitable. But only one such company made the kind of strategic moves that separated it from the pack this year. So Razorfish ranks high in our estimation this year while excellent companies like ModemMedia.PoppeTyson, Concrete Media, Icon Nicholson and others didn't make the list.

Similarly, interesting and excellent young Silicon Alley companies like Bolt, iTurf, Alloy Online, and PlatformNet -- all in the business of capturing a young demographic and selling fashion and accessories -- have not yet separated themselves from one another, nor have they grown sizable enough to make the list, although Alloy is clearly the most advanced of the local players and a company to watch.

Also, ethics require us to leave internet.com off the list. Alan Meckler's company, which provides news, information, and resource to Internet industry professionals is clearly a large company, a leader in its space, and has made some great tactical and financial moves this year. But of course we're biased because among its great moves this year was the acquisition of AtNewYork.Com and SiliconAlleyJobs.Com.

Finally there's always the question of how to deal with the traditional media companies. This year Time Warner launched a new interactive business, a new ambitious entertainment Web destination site, coupled with local community company FortuneCity on a joint venture, and launched a $500 million Internet investment fund. Clearly they're a major Silicon Alley player as are CBS, NBC, MTV Networks, and others. Deciding which of these players made the list and which didn't had a lot to do with how many agile forward thinking moves they made this year.

Company of the Year - 1999

1. DoubleClick

Four years ago, there were eight people at a tiny start-up founded by a guy from Michigan with a belief in the Internet as a place where marketers would eventually spend large sums to find customers. Now, the company Kevin O'Connor founded has more than 1,000 employees and revenues of nearly $200 million per year, and a market capitalization over $10 billion. The company is so far in the lead in the Internet advertising market that DoubleClick has virtually lapped the field. In fact, the company was the unanimous choice for @NY's company of the year for 1999.

The numbers tell a compelling story. DoubleClick serves more than a billion online advertising units per day. Its revenue doubled from the first quarter of 1999 to its third quarter. It has nearly 4,000 advertisers on more than 1,500 sites and its retention rate is 93 percent. And did we mention that of the advertisers dipping their toes into the tiny broadband space right now, DoubleClick serves 100 percent of their advertising?

But DoubleClick's influence over what users experience on the Net goes beyond banner ads. That's because the company has long believed that the knowledge it gains from selling and serving banner ads -- itself a tidy business -- will eventually be worth more than the advertising itself. Indeed, the money it makes from exploiting its massive databases of unique users and their surfing preferences continues to increase as a percentage against good old-fashioned ad sales. It's an infrastructure company, not just a sales company.

That's why the company's moves in 1999 seem so smart. The biggest was a $1 billion merger with Abacus Direct, a leading direct database marketing company that tracks consumer behavior. DoubleClick also bought up ad serving and targeting technology firm NetGravity for $350 million, bringing in more infrastructure and technology. DoubleClick is also in a position to lead the current explosion in e-mail advertising, extending its DART tracking and serving system to e-mail with DARTmail, inserting advertisements on the fly into e-mail newsletters and tracking their progress and effectiveness. To that end it has acquired boutique shop Opt-In E-mail for its expertise and clients.

Finally, perception counts for a lot in this business. DoubleClick continues to lose money ($5 million last quarter), and faces well-financed challenges from the likes of CMGI. But the media world perceives DoubleClick as the prohibitive leader, and so does Wall Street. Come to think of it, so do we. In fact, DoubleClick is the lone Silicon Alley firm in 1999 poised to enter the pantheon of top Web companies that includes Yahoo, EBay, and AOL.

http://www.doubleclick.net

Last Year: No. 3

2. Razorfish

An explosive year of growth carried the company founded four years ago by Jeff Dachis and Craig Kanarick into the top tier of interactive service shops worldwide, with a market cap of nearly $4 billion and -- gasp -- a profit on the books. Razorfish pulled off the biggest deal of the year in its sector, merging with well-regarded back-end integrator iCube in a deal worth nearly $700 million. It was the kind of merger the interactive services industry has been waiting for -- uniting front-end with back-end. And the deal has catapulted Razorfish to the head of its class. Razorfish today represents the ultimate evolution of a hip 2-person shop into an interactive powerhouse with 1,100 employees and offices in Silicon Alley, Amsterdam, Boston, Hamburg, Helsinki, Los Angeles, London, Mannheim, San Francisco, Stockholm and Oslo. The company is among the favorites on Wall Street these days as well, trading at more than double its opening day high.

http://www.razorfish.com

Last Year: No. 9

3. Flatiron Partners

Because they were early and because they were right (and because they had the backing of Chase Capital Partners), Fred Wilson and Jerry Colonna and their four-year-old firm are poised to be as important to New York as John Doerr and Kleiner Perkins were to Silicon Valley in the old days. Outside of CMGI's @Ventures and Highland Capital in the Boston area, Flatiron is the leading East Coast Internet-focused risk capital shop. It's not so much size that has made Flatiron what it is, as it is leadership. Of course, it didn't hurt that StarMedia, iXL, IXTC, and TheStreet.com went public this year. But Flatiron made New York safe for tech-styled venture capital and spawned a host of imitators. And instead of sitting around an marshalling itsmoney to pour into its early portfolio, Flatiron this year built a new pervasive computing practice and moved into the incubation of new companies.

http://www.flatironpartners.com

Last Year: NA

4. TMP Worldwide

There are several good reasons why Wall Street valued old-line classified advertising company TMP Worldwide as a hot Net property and sent its stock soaring and its market cap to over $5 billion. But the best is that TMP and CEO Andy McKelvey completed the reinvention of the company during 1999, moving its industry-leading Monster.com employment site out front and launching an innovative marketplace for freelancers of all stripes. And it turned a profit in the process. Now, TMP is poised to dominate one of the biggest trends the Web has created -- the movement of classified advertising online.

http://www.monster.com

Last Year: NA

5. StarMedia

Two factors put Fernando Espuelas and his Latin American portal so high up on our list: massive ambition and big money backing. There are few companies around with plans as big as StarMedia's -- nothing less than total media dominance of a huge region of the world. The Internet is, of course, the way in, and StarMedia spending lavishly to grab early marketshare, losing $25 million last quarter alone. In the wake of its successful IPO, StarMedia is already valued at more than $2 billion, but just wait: this is a company that wants a hand in all future Latin media technology, and its many deals this year are testament to that ambition. And strong competition from the likes of Microsoft and AOL just makes the plan seem that much better.

http://www.starmedia.com

Last Year: No. 11

6. Wit Capital/Dawntreader

Only in the Internet era can you take a microbrewery and turn it into an investment bank. But that's what Wit Capital founder Andy Klein and current company honcho Bob Lessin have done. For the most casual of observers, 1999 would seem to be a decidedly mixed year for Wit. Sure, it had a successful IPO and flew high for a while, but it suffered a black eye when it pulled back from its plan to launch an after-hours trading place and had its system of apportioning IPO shares to retail traders. Furthermore, the year saw the launch of high-profile, well-financed competition. And its stock is languishing in the teens. No matter. Chopping the ECN plan will be seen as a brilliant move, as will consolidating Lessin's Dawntreader venture fund holdings under the Wit umbrella. A couple of years down the line, Wit has the chance to be one of the dominant investment banks -- or whatever they'll call them then -- of an expanded digital economy and they set the wheels in motion this year.

http://www.witcapital

Last Year: NA

7. Datek Online

New York is of course the world's stock trading capital, so you'd think it would be a major player in online stock trading. Instead it's just in the middle of the pack with TD Waterhouse, Wit Capital, and of course Datek as some of the big players. But Datek may be the most ambitious. Although Paul Allen backed out of an investment in the company, Datek did raise $195 million from TA Associates this year to fund its operations. And the company's working on building its Island ECN in a Netcentric attempt to overthrow Reuters' Instinet.

http://www.datek.com

Last Year: NA

8. Globix

Who'd believe New York as a center for infrastructure and bandwidth? Anyone who has visited Globix's impressive new state-of-the-art command center in Chinatown, that's who. This is a still-smallish company with aspirations of joining the big-time telecomm ranks and founder Marc Bell's strategy seems to be on track: its Internet hosting business grew by more than 100-percent in '99. Globix is growing rapidly and piling up losses, but Wall Street has rewarded its global vision handsomely, pumping the stock a thousand percent duringthe year.

http://www.globix.com

Last Year: NA

9. Sony

With apologies to LA and Nashville, New York is the center of the recorded music industry, and it's full of online music start-ups from Reciprocal Music to PlatformNet. But this year's biggest, most prescient online music player in Silicon Alley was, of all companies, Sony. Led by young executive Fred Ehrlich, Sony Music has taken a decentralized, investors approach to its Net strategy. The company has made equity investments in Web chat pioneer Acuity, online radio services Spinner.Com and OnRadio, music destination sites like Launch.Com and Platform.Net, online video delivery service Digital On-Demand, and Latin American portal Yupi.Com. The company has also acquired e-mail publishers InfoBeat and Emaze. And the Columbia House record club, which is co-owned by Sony, recently acquired CDnow. But Sony hasn't stopped at music. The company's online gaming business is a leader in small, game-show styled online games making Sony a local Internet powerhouse.

http://www.sony.com

Last Year: NA

10. Mail.com

The most powerful word in the Internet business is "free." And the most powerful application is messaging. Wed the two and you've got the idea behind Mail.Com. It may be a hard road to profitability for the company, but this year Mail.Com achieved scale, with more than 10 million e-mail boxes registered thanks to distribution deals with NBC, CBS, Prodigy, Earthlink, and others. That's more than six times as many registered e-mail boxes as StarMedia had in all of Latin American as of September. And this year Mail.Com made a spate of acquisitions to push into broader the universal messaging market, buying up assets that will allow it to add fax and Internet telephony to its Web service. The company even made a recent move into the potentially lucrative business market.

http://www.mail.com

Last Year: No. 17

11. Net2Phone

With a market valuation several times the size of its pre-spin-off parent IDT, Net2Phone was much-beloved by the Street this year, giving its somewhat shaky technology the chance to gain momentum. Now, thanks to deals with major destination players like AOL, it's clearly the leader in the expanding Net telephony market.

http://www.net2phone.com

Last Year: NA

12. MediaMetrix

Given that the Internet is the one media platform where companies can actually measure who is doing what at their sites, we're not at all convinced that extrapolating data from a representative sample is the appropriate way to measure Internet traffic. But for better or worse, this Long Island-based company has become perhaps the most widely quoted Internet measurement company and the company came public this year to the tune of a $755 million market cap.

http://www.mediametrix.com

Last Year: NA

13. About.com

Community and content-based traffic generating many ad impressions and e-commerce placements: It's an old model, in terms of the Net, but About.com is making it work with increasing revenues and narrowing losses. And when you look at the Media Metrix rankings, it always looks like David in the neighborhood of 10th place on the entire Net, against the Goliaths (it sometimes beats eBay in traffic). But the company reportedly pulled 8.9 million unique month users to its network of sites in the fall. True, that's around 10 times less that Yahoo's typical numbers, but it ain't chopped liver and it's quite possibly tops among local Internet media properties not affiliated with some traditional media brand.

http://www.about.com

Last Year: No. 18

14. Jupiter Communications

$443.5 million is an awfully high market cap for a consulting and market research company, particularly a money-losing one. But Jupiter remains the most powerful research company in the Internet business and going public this year will give it the capital to expand its market leading reach.

http://www.jup.com

Last Year: NA

15. CBS

Last year it was NBC among New York's traditional media companies making noise by cutting a spate of ads-for-equity deals and moving strongly into the Net business. This year it was CBS's turn. Media mogul Mel Karmazin many have been slow to embrace the Net but he went whole hog this year investing $100 million in cash and ads in local portal and sweepstakes company IWon. He pumped another $150 million into Silicon Alley start-up Medscape, which now forms the backbone of CBS's much hyped health site. The company also invested in the Office.Com portal developed by local new age telecom WinStar. And, after merging with Viacom, CBS is now owner of the soon to be spun off MTVi, the Internet arm of MTV. We'd say CBS has become a major Silicon Alley player.

http://www.cbs.com

Last Year: NA

16. Rare Medium

If you ever doubt the power the holding company model holds over Internet investors, just check out the chart on Rare Medium. This spring the company announced that is would become an incubator, helping grow businesses in a services-for-equity arrangement. The company's shares were trading around at around $6 at the time. Today shares are in the upper $30s. With $85 million from financier Leon Black's Apollo Management, CEO Glenn Meyers is leading Rare toward what would could be a services-for-equity powerhouse -- if, of course, the sites it's building turn into full-fledged companies.

http://www.raremedium.com

Last Year: No. 13

17. Prodigy

An Alley leader in the early days, this former proprietary service has executed on a long and painful plan to revamp as a value-added ISP. This time, it's got serious backing from the likes of telecomm leader SBC, and is moving beyond consumer dial-up into business and broadband services. So far, Wall Street hasn't caught on to what is clearly an undervalued equity in such a hot market.

http://www.prodigy.net

Last Year: NA

18. Information Builders

This veteran integration company has made a convincing dot.com push in 1999 and with a thousand employees in its New York headquarters, 2,000 worldwide, and sales of well over $300 million, CEO Gerry Cohen's company is proving that New York can be a software headquarters. The company is privately held, but after a major rebranding as the "i-business" and its subsequent "discovery" by among others, the Wall Street Journal and Fortune, the investment bankers are licking their chops at the thought of taking this baby public. After all, it's got a customer list that would make any of the Alley service shops salivate.

http://www.ibi.com

Last Year: NA

19. Hotjobs.com

A darling of the public markets this fall (revenues increased by nearly 400 percent), Hotjobs used Super Bowl-sized spending to blow by some of the biggest names in the media business to establish itself as a top-tier employment site, grabbing more than 6,000 paying recruiters and firms.

http://www.hotjobs.com

Last Year: No. 23

20. 24/7 Media

With DoubleClick growing aggressively through acquisitions, and CMGi making a strong push into the online advertising services marketplace, the heat has been on 24/7 Media all year. In fact, we would be surprised if 2000 did not bring some kind of deal for 24/7. But in the meantime the company has continued to grow, bringing in revenues of $52.9 in the first three quarters and expanding strongly in Europe.

http://www.247media.com

Last Year: 14

21. Uproar

Bandwidth-hogging online gaming has never exploded the way people expected, but smaller games often built around TV game show properties are hot. And after Sony, Uproar is the biggest player, in part thanks to an investment deal this year with British TV company Pearson giving Uproar the online rights to several TV games.

http://www.uproar.com

Last Year: NA

22. Oxygen Media

We still maintain that Gerry Laybourne's start-up media company targeting women is less a Net company and more a cable TV play, but when you raise $222 million and launch properties on TV, in print, and on the Net in a year, you're hard to ignore.

http://www.oxygen.com

Last Year: 25

23. Agency.com

For most of the year, the wired world asked "when?" to the long-expected IPO of this highly-regarded services firm. Finally this fall, the market welcomed Agency.com with open arms, even though by staying out, it had fallen behind in the M&A market. Now, Agency.com has to aim for an operating profit.

http://www.agency.com

Last Year: No. 1

24. InterWorld

Sure, Silicon Alley exists in the shadow of IBM and Computer Associates, but Silicon Alley has few Internet software product start-ups, and almost none of scale. None except InterWorld. The e-commerce software company this year shoveled out from under a management shake-up and finally came public at $15 a share in August (trading at $70 this week). Even better, revenues grew at a 200-percent clip from the first three quarters of 1998 to the first three quarters of this year. But most interesting, in an industry sector were sales cycles are long, InterWorld has inked cross marketing pacts with the likes of Ariba to tap the increasingly attractive business-to-business market.

http://www.interworld.com

Last Year: NA

25. iVillage

How the mighty have fallen and yet ... even though iVillage has a big cash burn and dropping stock, and even though it's constantly rumored to be in talks on a takeover by a larger media company, it's still a major player in the increasingly lucrative women's space and its deal to acquire the online rights to the famed Lamaze brand looks to be a killer move for the future.

http://www.ivillage.com

Last Year: No. 5

Next week, we'll take a look at companies we believe will make big strides during 2000.