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The Last Days of Net Mania

Marc Andreessen was there when the dot-com boom began. His IPO for Loudcloud marks its end

Internet legend Marc L. Andreessen is running on adrenaline. It's the late afternoon of Mar. 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 Inc. (LDCL ) 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 (MWD ) Manhattan headquarters. Outside, dark clouds engulf New York's steel towers. But the road-weary Andreessen and his pals have their own storm to contend with.

Loudcloud is going public at the worst possible moment. A day earlier, Web portal Yahoo! Inc. (YHOO ) sent the market reeling by announcing a massive sales shortfall. Today, chipmaker Intel Corp. (INTC ) warns it will badly miss first-quarter revenues and will cut 5,000 jobs. The Nasdaq Composite Index sheds 55 points and is nearing a 26-month low. The cratering conditions are ominous for the startup, which runs complex Web sites for businesses. 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 Oct. 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 & Co. (GS ) aren't having an easy time selling all the IPO shares to institutional investors. Finally, at 5 p.m., they finish. The thrift-store price: $6 a share.