WebTrends founders' caution yields nearly $1 billion payoff
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Eli Shapira and Glen Boyd are not your garden-variety Internet millionaires.
The former corporate middle managers shooed away the venture capitalists. They turned their noses up at fast growth. They squeezed profits out of their business.
And finally, the sweat equity paid off.
For nearly $1 billion.
On Wednesday, the two announced they were selling their 7-year-old Portland company, WebTrends, to a California buyer, NetIQ, for stock worth nearly $1 billion.
"This, for us, is just another day at the office," said Boyd, who co-founded WebTrends in 1993 with Shapira.
Yeah, right.
The deal, if consummated, will earn each the equivalent of roughly $150 million in NetIQ stock. The remainder will go to other shareholders, provided they approve the merger in a special shareholders meeting to be scheduled sometime in the next several weeks.
Not that Shapira and Boyd are impressed by that kind of money these days. At the height of last year's Internet stock bubble, WebTrends' stock reached a lofty $86 a share, making each of the founders worth $440 million, if only for a few days.
Both had been managers at Central Point Software, one of Oregon's biggest software makers until its 1994 sale to Symantec. A year before the Central Point sale, Boyd and Shapira launched a new company that made security software that worked with Novell computer-network products.
Rather than succumb to the dazzle of venture capital and fast-track growth, Shapira and Boyd concentrated on building a profitable business, little by little. They kept it going with personal loans and cash flow from operations. For the first four years, the company was so small they ran the corporate taxes through their personal 1040 income-tax forms.
In 1995, they felt the wind change direction from corporate network software to Internet software.
"We could see all the investment that was going into the Internet," Boyd said.
So they found a new Internet use for their old network product. Instead of looking for security breaches, the new software, called WebTrends Log Analyzer, used the same surveillance techniques to look at the way visitors browsed Web sites.
In February 1996, they introduced the Log Analyzer to the world. They sold $50,000 worth the first day.
From $636,957 in revenue in 1995, they grew to sales of nearly $41 million in the first nine months of 2000 alone. From a profit of $169,369 in 1995, they cleared more than $5.8 million in the first nine months of last year.
WebTrends went public in 1999, instantly giving the co-founders a net worth of $50 million each. Today, after creating charitable foundations with some of their wealth, they still control about 30 percent of WebTrends' total stock.