Internet Guru Marc Andreessen is running on adrenaline. It’s the late afternoon of March 8, and he has just completed a backbreaking, initial public offering road show that landed him in 70 meetings in 16 days with moneymen scattered across North America and Europe.

Andreessen has been trying to wow institutional investors with his 18-month-old Internet startup, Loudcloud Now he’s hunkered down with a handful of Loudcloud associates in a sixth-floor conference room at investment bank Morgan Stanley Dean Witter’s Manhattan headquarters.

Loudcloud is going public at the worst possible moment. A day earlier, Web portal Yahoo! sent the market reeling by announcing a massive sales shortfall. Today, chipmaker Intel warns it will badly miss first-quarter revenues and will cut 5,000 jobs. When Loudcloud first filed to go public 164 days earlier, it was valued at $1.15 billion, in spite of losing $107 million on only $6 million in revenues in the three quarters ended October 31. At the most recent price range of $6 to $6.50 a share, it would be worth just $440 million. Even at the new price, the salespeople from Morgan Stanley and co-underwriter Goldman, Sachs aren’t having an easy time selling all the IPO shares to institutional investors. Finally, at 5 pm, they finish. The thrift-store price: $6 a share. On a phone call to a reporter, he sounds chipper in spite of the gloomy outcome. "We raised the money!" he nearly shouts. "We’ve done it."

Stepping back, this bittersweet moment for Andreessen could mark the end of an era for Wall Street and for the Internet bonanza. And in one of life’s little ironies, it’s fitting that Andreessen is the one to witness its passing. It was his first company, Netscape Communications, with a browser elegant in its simplicity that opened up the potential of the World Wide Web. When Netscape went public in 1995–with zero profits, but lots of promise–its stock rose 107%, whetting appetites for more Net IPOs. Over the next five years, some 420 Web companies would go public before Net mania turned into Net aversion.

Racing the clock

In fact, Loudcloud’s drubbing has all but slammed the door for other Internet offerings. And even when conditions improve again, it’s unlikely investors will bet their money on long-shot Net companies without a whiff of profits. Since Loudcloud’s March 9 IPO, no tech firm has filed an application to go public.

It’s a disappointing turn of events for the 29-year-old Andreessen. The news for Loudcloud is not good. Goldman Sachs spent at least three days propping up Loudcloud’s stock price by buying millions of shares, according to Scott Ryles, CEO of Epoch Partners, a secondary underwriter. Goldman declined to comment. The stock still sank to a low of $3.88. It has since drifted back to $4.53.

Now Andreessen’s once-promising startup is in a race to build revenues and profits before it runs out of money. Loudcloud has about $225 million in the bank after raising $150 million in its IPO, but it’s burning through about $10 million per month. Although Loudcloud has booked $120 million in contracts for the next two years and boasts blue-chip customers such as Ford, News, and Nike, many of its 46 customers are startups and several are in trouble. Even the analysts for Loudcloud underwriter Goldman Sachs don’t expect Loudcloud to break even until sometime in early 2003.

Loudcloud’s a brand-new sort of business. Operating out of leased data centers with leased computers, it provides super-reliable Web sites for everything from media outfits to e-tailers. And it does it fast. Loudcloud’s secret sauce is a layer of software, Opsware, which quickly integrates e-business software programs made by different companies–from Oracle’s database to Vignette’s software for handling Web pages. That way, Loudcloud can manage its customers’ Web operations, updating and expanding as needed.

The real threat comes from tech behemoths such as EDS and IBM Global Services and an up-and-coming powerhouse, Exodus Communications. The bigs offer corporations the option of handing over the keys to their information systems to proven and trusted service providers. Companies have been slow to turn over their Web sites to upstarts like Loudcloud. More than 500 Web hosters have sprouted up over the last few years, but analysts expect up to 60% of them to fail by this time next year.