It was because most of those companies had no choice they didnt meet the NYSEs stringent listing requirements.
Thats no longer the case as we enter the next wave of Internet-related IPOs.
That marks a significant change from the tech boom of the 1990s, when virtually every new tech company listed on the Nasdaq. Indeed, one of the few that didnt, Perot Systems, which debuted on the NYSE in early 1999, saw its IPO marred by delays and halts when strong demand overloaded the NYSEs trading system.
At the time, the Nasdaqs all-computerized trading platform was often cited by companies as a reason for listing on that exchange. (It seemed so modern.) But today most of the NYSEs volume is also conducted via computers.
Online business networking site LinkedIn (NYSE:LNKD) debuted to much fanfare on the NYSE last month, and Internet radio company Pandora plans to list its shares on the NYSE rather than the Nasdaq, among many other high-flying names.
Amid widespread fears that another tech bubble is emerging, there are significant differences between the companies coming public now and the ones that caused such a sensation more than a decade ago.
Not least among those differences is that todays companies are standing on far more solid financial ground.
Consider LinkedIn (NYSE:LNKD), whose shares more than doubled in their first day of trading last month, a frenzy that recalled the heyday of 1990s dotcom IPOs.
LinkedIn has been repeatedly compared with Netscape, the Internet browser company whose 1995 IPO is credited with starting the first dotcom boom. But LinkedIn differentiated itself from the vast majority of its 1990s dotcom predecessors -- including Netscape -- by turning a profit before going public. By doing so it established an important precedent for the new kids on the IPO block.
Of course LinkedIn has its share of critics, and more than a few analysts questioned the astronomical valuation placed on its stock after its shares hit the open market. But there is no disputing the fact that LinkedIn was strong enough financially to list its shares on the NYSE. The same is true of Facebook, Zynga and Twitter, each of which is positioning themselves to follow LinkedIn into the publicly traded stock markets.
Curiously, Groupon and Pandora, the next two Internet companies in line to go public, havent turned a profit yet, although both have reported solid revenue growth. Analysts have speculated these companies may be in a hurry to go public in an effort to capitalize on LinkedIns success.
In any case, no one believes the lack of profits will dampen demand for either stock.
It certainly didnt hurt demand for stocks like TheGlobe.com, Pets.com and Webvan, among many others, back in the 1990s. None of those companies was close to turning a profit when their shares debuted on the Nasdaq amid an insatiable demand for dotcom shares.
Steven Spencer, a veteran trader at SMB Capital in New York, recalled how the phenomenal success of the first wave of dotcom IPOs changed the way investors, bankers and entrepreneurs viewed the two major exchanges.
When those companies originally listed on the Nasdaq it was out of necessity, Spencer said. But their success created a cachet for the Nasdaq, gave it some prestige.
To be sure, the Nasdaq had its share of hugely successful companies at the time, including Microsoft (NASDAQ: MSFT), Apple (NASDAQ: APPL), and Intel (NASDAQ: INTC). But the perception that grew out of the IPO hysteria was that the hippest new companies, the ones that were going to change the world and be part of what tech analysts liked to refer to as the new paradigm, had to list their shares on the Nasdaq.
Evidently that perception no longer exists.
Erin OHara, a spokeswoman for LinkedIn, wrote in an e-mail to FOXBusiness.com:
We thought the NYSE was a great fit for LinkedIn based on their understanding of our business and their vision for how we'd work together.
Groupon, which filed IPO papers last week with the Securities and Exchange Commission, announced that its stock symbol will be GRPN. But it didnt say which exchange its shares will trade on.
A Groupon spokesman said no exchange was listed in its SEC filing because the company hasnt decided yet where it will list its shares.
The smart money is on the NYSE.
Spencer said the current crop of high-profile Internet companies can be more selective in their choice of exchanges because these companies have waited longer to go public than their 1990s predecessors.
Theyve been around long enough that their financials qualify them to meet the requirements of both exchanges, he said.
The competition for these listings between the exchanges is said to be fierce.
A member of a syndicate desk at a major Wall Street investment bank said the NYSE appears to moving out ahead early in the competition. The banker asked that he and his bank not to be named because his firm is likely to participate in some of the forthcoming tech deals.
During the first Internet boom the momentum shifted in favor of the Nasdaq, but the momentum has shifted back to the NYSE and companies are waiting a little longer to go public in order to capitalize on the benefits to their brand that go with listing on the NYSE, the banker said.