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Not Com

Am I old-fashioned? It offends me that Mary Meeker, “Queen of the Internet,” earned $15 million last year.

I’ve got a confession to make. I don’t own any Internet stocks. Not one. Nada, zip, zero. Dot com, I ain’t.

Call me old-fashioned, but my instinct is to discourage people from buying shares in companies that don’t have profits or even products.

My confession helps explain why I find the humongous salary paid to a so-called “Queen of the Internet” obscene. The “queen,” in case you don’t know, is one Mary Meeker, author of a book on Web businesses and holder of an MBA from Cornell University. Meeker, 40, was given her moniker by Barron’s, the respected financial weekly. Her nickname caught on and has been broadcast by such elite publications as The Wall Street Journal. Fortune named her the third most influential woman in U.S. industry.

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Meeker is a genuine technological visionary, or so her press agent, the media and scads of Web executives say. In this, she is an emblem for our times, a Gatsby of the Internet. Though she is forever opining about the future of technology, Meeker has never sold a line of code or published a scientific paper or founded a high-tech business. Yet last year she earned a reported $15 million from Morgan Stanley, the top-drawer Wall Street firm. Meeker’s achievement: She touts Internet and e-commerce stocks.

People who tout stocks are known as “analysts” in the industry, and in the pecking order of Wall Street they have traditionally rated a distant third in compensation behind stock traders and the investment bankers who actually raise money for companies. A scant half-decade ago, respected high-tech analysts earned $150,000 a year, 100 times less than Meeker’s 1999 take.

The rise of Net stocks changed all this by elevating the status of stock analysts. Because the value of Net companies is based almost entirely on future performance (since many of them don’t even have any revenues, let alone profits), analysts fill a crucial role in explaining to potential investors just how these new businesses will mature into market-dominant, profit-heavy titans. The best Net analysts combine the revolutionary zeal of Che Guevara with the cynicism of P.T. Barnum.

It helps to be positive. Some analysts routinely anger companies they cover by advising people to unload their shares. Not Mary Meeker.As of late last year, according to published reports, she’d never placed a “sell” order on any e-commerce stock in her decade as an analyst.

But, hey, don’t underestimate the value of cheerleading. The rewards can be immense. Morgan Stanley, Meeker’s employer, was the leader in bringing shares of Net companies to the public in 1999, ringing up as much as $100 million in fees from underwriting initial public offerings of Net stocks.Meeker gets a lot of credit for this from Morgan Stanley-and from the firm’s competitors.

Meeker’s success offends me. Call me jealous or meanspirited, but I just can’t accept it when Barron’s insists Meeker is underpaid. Or maybe I just want an excuse to issue a reminder that when stock analysts earn more than inspired engineers and scientists, society loses. It isn’t fair that innovators who don’t happen to pursue e-commerce languish. Is it really possible that energy, materials, transportation and a variety of medical technologies aren’t worth betting on, too?

There’s no way of telling what promising innovations in other fields are being ignored; it’s impossible to know for sure everything that hasn’t happened as a result of the Internet frenzy. But the numbers are sobering. In the final quarter of 1999, venture capitalists directed a whopping $5.2 billion into Internet-related startups, more than four times the amount one year before. Sadly, the decision to go hog-wild on the Net wasn’t based on deep insights into the future of technology but the simple fact that the market value of Net stocks soared last year to $1 trillion, from $200 million.

Meeker is the human face behind one of the great sales jobs of modern times.When everyone-big or little-wants a piece of a Net stock, then there’d better be plenty to go around. Meeker helps to create the excitement around the companies entering the market, ensuring that there is enough to go around.

If there were justice in the world, Meeker would stick around as a Net analyst long enough to see if her grandiose predictions start to come true. Then even if her picks went south, she’d gain credibility by patiently explaining her failures. But in the surest sign that I’m not crazy after all, Meeker isn’t likely to do this. She is quietly plotting her exit from her field, according to published reports.

Meeker won’t comment on reports of her exit plans or any aspect of this column (she’s too busy, her PR person says), but Meeker-watchers say she may soon join a high-tech business. Fittingly, in my opinion, she has her sights on a so-called “incubator” company whose aim is to launch other Net companies. The incubator Meeker is expected to join intends to sell stock to the public later this year.

No doubt Meeker is needed to help this incubator sell stock. But it makes you wonder.When companies go public who help other Net companies go public, it would seem the endgame is near.

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