In Web years, BoomTown is now officially 143 years old.

Why? Well, I was the one who got to write the big Page One piece in The Wall Street Journal after GeoCities was sold to Yahoo in January of 1999 for $5 billion in stock.

GeoCities was, in its way, the Facebook of its time.

But instead of “friends,” its users were “homesteaders,” since the Web then was a place to be pioneered and settled.

As Cher so eloquently sings: Those were the days my friend, we thought they’d never end.

Except they did. Yahoo (YHOO) announced yesterday that it was closing the GeoCities unit down, part of new CEO Carol Bartz’s war against useless assets at the troubled company.

But a full decade ago, the Yahoo-GeoCities transaction was a big, big deal, struck at the peak of the Web 1.0 bubble.

The move shook up the then-Internet landscape, in which Yahoo was the undisputed king.

The sector then had begun to rapidly consolidate, as stronger players snapped up weaker ones in a race for market share.

The Yahoo-GeoCities deal closely followed another deal in which At Home, a high-speed Internet access service, bought search and directory service Excite for stock valued at $6.7 billion. In another key deal at the time, then-independent America Online agreed to buy Netscape Communications for stock then worth $4.2 billion.

Of those then-dominant Web companies, only Yahoo and AOL–now a troubled unit of Time Warner (TWX)–survive relatively intact.

And, what exactly did Yahoo get for its giant payment back then? A money-losing, low-revenue company with a whole lot of users.

At the time of the purchase, the publicly-traded Marina Del Rey, Calif., company had reported that fourth-quarter sales increased to $7.5 million from $1.7 million a year earlier. But the company’s loss had also swelled, to $8.4 million from $3 million, in the year-earlier period.

Sound familiar to some current Web 2.0 stories? I thought so.

Another weird irony: One of GeoCities major investors was a venture firm called Flatiron Partners, whose principal, Jerry Colonna, was on the board.

And who was Colonna’s parter? Well, Fred Wilson, who has a different firm now called Union Square Ventures and is–wait for it–one the the major investors in the 2009 hotsy-totsy start-up, Twitter.

(You can read Wilson’s terrific take from the VC perspective of the GeoCities experience here.)

In other words, the more things change… Well, actually, they don’t change.

So, if you want to take an instructive trip down memory lane, here is my piece below, which appeared in The Wall Street Journal on Jan. 29, 1999:

Those Who Tied Fortune to GeoCities Yell Yahoo! All the Way to the Bank

By KARA SWISHER | Staff Reporter of THE WALL STREET JOURNAL

Last spring, Thomas R. Evans was nervous about leaving his longtime job at the top of a powerful Manhattan media company for an Internet start-up near the beaches of Southern California. So he talked to his boss, real-estate and publishing tycoon Mort Zuckerman.

“I was wondering if this whole Internet thing was real and sustainable,” says Mr. Evans, then publisher of the Atlantic Monthly and U.S. News & World Report. “I wanted his blessing in a way.”

Virtual Payoff

Mr. Evans got Mr. Zuckerman’s nod–and a lot more. You know the drill by now (though it may not be getting any easier to hear). He became chief executive officer of GeoCities , an electronic casbah of about 3.5 million Web sites, and helped lead its initial public offering last summer. Then Thursday, Yahoo! Inc. agreed to buy the young company for about $5 billion in stock. It means the value of Mr. Evans’s stock options soared by 65% Thursday to a dizzying $200 million.

Yahoo! Agrees to Buy GeoCities in $5 Billion Stock Transaction

That’s some kind of money for nine months’ work. After you’re done banging your head on a wall, consider that members of the new financial elite in Silicon Valley are being created in less time than it takes for a kid to finish his first-grade year. That puts oil, real estate and finance magnates to shame. Mr. Zuckerman, for example, spent a lifetime building his $1 billion financial empire.

Asked how he was doing Thursday, Mr. Zuckerman says: “Not as good as Tom Evans.”

Mr. Evans, who commutes between GeoCities’ Marina Del Rey, Calif., headquarters and his home in New Canaan, Conn., is quick to point out the ephemeral nature of his wealth. He must wait six years for his options to be fully vested. And his net worth could evaporate if Yahoo’s highflying stock sinks.

“It does not seem real, because it is not real, because this is based on the long term and is dependent on where this whole industry is going,” says Mr. Evans, 44 years old. “Anyone coming into this industry assumes a certain amount of risk because no one really knows how it is all going to turn out.”

Litany of Lucre

It has turned out well so far for the new moguls at GeoCities. According to public filings the company made last summer, the biggest individual winner is co-founder and Chairman David Bohnett, 42, who owns about three million shares outright, now worth $367 million, based on Yahoo’s closing price Thursday. Mr. Bohnett insists he is overlooking that bit of extra money. “I do not see this as a financial event,” he says. “And we did not start this company with money in mind.”

Chief Technical Officer John Rezner, 35, who worked nine years for aerospace company McDonnell Douglas Corp. before co-founding GeoCities, holds 827,000 shares worth $103 million.

The management team that came in with Mr. Evans last year–taking over from Mr. Bohnett to help with the IPO–is also well-situated. Chief Financial Officer Stephen Hansen, 42, who formerly held the same position at Universal Studios Hollywood, has options for about 600,000 shares of stock, which would be worth $74.7 million at current prices. Michael Barrett, 36, advertising vice president and former online executive with Walt Disney Co., has options for 280,000 shares, worth about $34.9 million.

There are, of course, all kinds of gnashing of teeth over whether the Internet entrepreneurs deserve such riches. But obtaining great wealth through luck or artful maneuvering is nothing new in American business history. Take the stock manipulators of the 1890s and the leveraged-buyout artists of the 1980s. It may be some consolation that GeoCities’ founders can claim that they developed something that is used by many people. In its December Web-traffic report, research firm Media Metrix says the “GeoCities.com” Web site ranked third, behind America Online Inc. and Yahoo, with nearly 19 million different visitors.

Mr. Bohnett says the company was born from a “passion for giving people a chance to speak up.” Founded in 1994, GeoCities was one of the first Web-based communities, where users post individualized sites to express themselves.

Dubbed “homesteaders,” these customers create the bulk of the content on GeoCities. Their Web pages are organized into “neighborhoods” of personal interests and hobbies, such as personal finance or motorcycles, and monitored by a network of volunteers.

“My goal was to stake out a broader territory and create a community of interests, just in the same way Yahoo was helping people find their way around the Web,” says Mr. Bohnett, who led the company in a variety of top jobs, including chief financial officer, CEO and president. “Then we were going to monetize that base of users as the business model emerged.”

That model for profitability hasn’t yet arrived, in part because the company spends heavily to increase its market share. Thursday, it announced a net loss for last year of $18.2 million on revenue of $18.4 million.

Mr. Evans, a dark-haired man with a preppy demeanor and razor wit, has plenty of experience building businesses. He worked his way up in Mr. Zuckerman’s organization from sales and advertising jobs, and eventually served as president and publisher of several magazines.

After being approached several times about new-media positions, Mr. Evans says he decided to jump to GeoCities when the importance of the Internet became clear to him. “I think that by the time I really took a look at it, the whole sector had matured and gotten really interesting for those of us in the traditional media companies,” he says.

While Mr. Evans is loath to discuss the valuations of Internet companies, his former boss Mr. Zuckerman doesn’t dodge the opportunity to be philosophical about Web mania.

“It’s like they said in high school: ‘Boys will be boys and girls will be girls,’” Mr. Zuckerman says. “I don’t want to change anything, I just want to get in on it.”

Recently, BoomTown had a lovely lunch with PBS new media blogger Mark Glaser (pictured here).

Glaser is a longtime free-lance journalist whom I first noticed when he wrote a weekly column for the USC Annenberg School of Communication’s Online Journalism Review, post-Web 1.0 bubble, as well as for the most excellent “Media Grok” daily email newsletter for the now-defunct Industry Standard back in the midst of the froth.

Glaser was always able to cut through that with a clear-headed tone–while maintaining a respect for what was good about traditional journalism, as well as an excitement about the possibilities of new media.

His MediaShift site for PBS has recently gotten much beefed up, with interesting pieces about a range of digital media topics, from a cool map-timeline combo from the Washington Post to a new business venture called the Printed Blog to, of course, the impact of social media on journalism.

(There is also an interesting closely linked site called “Idea Lab,” which is a group blog about reinventing community news in the digital age.)

Glaser writes on the MediaShift blog about once a week and has about a dozen contributors.

A recent post–and thank goodness for some counter-programming in the blogosphere–was titled: “Warning: Dependence on Facebook, Twitter Could Be Hazardous to Your Business.”

Here’s my video interview with him, on a range of issues facing the media in the interactive world (apparently, journalists don’t know everything!):

Microsoft CEO Steve Ballmer made an appearance at the three-day U.S. House of Representatives Democratic Caucus Retreat today to talk about innovation and, let’s be real, the very bad economy and the impact on businesses like the tech giant.

Held at the Kingsmill Resort in Williamsburg, Va., the confab has already seen an appearance by President Barack Obama yesterday and one by Vice President Joe Biden this morning. Ballmer got the lunch spot.

The annual gathering is more crucial this year, given the pressure to pass the massive economic stimulus package to try to revive the moribund economy.

Ballmer was not reassuring. “The bubble has burst,” said Ballmer. “We can no longer rely on consumption by refinancing our homes or inexpensive money to fuel economic growth, and that’s certainly had a huge impact.”

And also: “In my view, what we now have will be a fundamental economic reset.”

Microsoft (MSFT) should know all about that. The powerful company recently announced weak earnings, a foggy outlook and layoffs of 5,000 employees.

Here’s Ballmer’s speech to the group:

Well, I want to thank Jay, I want to thank the speaker and all of you for the opportunity to be here today and chat with you. It’s a real honor to have a chance to share some thoughts on the economy and on innovation, and hopefully spur some thoughts on how we all participate in restarting long term economic growth.

I’m going to make one thing clear up-front: I’m not going to claim to be an economist. On the other hand, I think it’s sort of the responsibility of every businessperson to really form a model of what’s going on in the economy, if you’re going to provide proper stewardship to your business; big company, small company, it’s important to have a model of what’s going on, and certainly have been thinking a lot about the economy in the context of how we think about and plan for the future of Microsoft.

For the past 25 years, the world has certainly enjoyed incredible, incredible global growth. Average incomes around the world grew at unprecedented rates, millions of people moved from out of poverty into the middle class for the very first time.

I thank you again for the opportunity. It’s been my pleasure.

There are two schools of thought about Twitter’s decision not to sell itself to Facebook, as it did not in the fail-whale of a deal that BoomTown reported on yesterday.

Here’s my favorite quote from an Internet exec who thought the microblogging service’s decision to turn down $500 million in stock (and some cash) in the hot social-networking site was–how can I put this delicately?–stupid:

“If Twitter turned down 500m in stock, they should go see a shrink.”

But, others disagreed, with another big Web player noting: “Why should Twitter hitch itself to Facebook’s horse, when they don’t have to?”

Debate raged, depending on your point of view, with change-averse Twitter users mostly seeming relieved.

I am more toward the middle of the road, not knowing–who really does?–what was the best move. Thus, I would agree with a sentiment in an email sent to me yesterday from yet another digital guru:

“I think strategic buyers are going to be considered as options for all venture backed companies going forward. Additional rounds of financing are not the given they have been in the past few years. Liquidity is at a premium I’ve never seen before.”

Yes, indeed, as in all things, it always comes down to money and means and time.

In other words, Twitter has made the big bet that it has plenty of all of it, to transform itself into a real business and killer app before others catch up to it.

Right now, its business is deadly simple: A registered user logs in via the Internet or a mobile phone and answers the “What are you doing?” question the service asks in only 140 characters or fewer.

But that single feature has allowed the San Francisco-based Twitter to grow to about six million registrations, as reported in October, up 600 percent over the last year.

And that’s why Facebook–for all its powerful online social connections–has watched carefully as Twitter has raced past it in innovating in the “status update” arena.

And that is also why Facebook wanted to acquire it, to be able to check that important feature off its list, so it could move onto other issues (like finding an advertising model that pays off big).

According to many I spoke to about the now-ended discussions between Twitter and Facebook, both sides got along well, felt the fit was a manageable one and the union of the two made sense on many levels–and still does.

But, for Twitter, the chance to make a run for the prize was paramount, with a feeling among its investors and execs that the start-up should still take a shot at building its revenues–there are none right now–as well as it had done at building its growth.

As for Facebook, it apparently plans to keep the pedal to the metal too, in terms of growth and acquisitions–powering through these bad times economically, in order to emerge victorious when the tides turn.

In a prescient piece last week, in fact, BusinessWeek’s Spencer Ante outlined the Facebook do-or-die strategy.

Wrote Ante:

“As gloom descends on Silicon Valley, most startups and giants are growing cautious and cutting back. But not Facebook. The social-networking Web site sees a bleak economy as all the more reason to press ahead with aggressive plans for growth. ‘This is not the time for tech companies to be cutting back; this is the time to be hitting the accelerator,’ says Peter Thiel, a Facebook board member and investor.”

Of course, this was the very same Peter Thiel, who told me in a video interview a year ago that “there was absolutely no bubble in technology.”

Well, with tech valuations now in the basement (as well as Thiel’s own hedge fund returns) from peaks last year, he’s right–that bubble has surely been popped.

As I said before, you just never know, a kind of equivocation that Hamlet spoke about so eloquently in his famous soliloquy in Act Three, Scene One, of William Shakespeare’s classic play.

It’s in text and video below–the Laurence Oliver version, of course!–because we all could use a little more insight than 140 characters or a post on a digital wall gives to any of us these days:

To be, or not to be: that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them? To die: to sleep;
No more; and by a sleep to say we end
The heart-ache and the thousand natural shocks
That flesh is heir to, ’tis a consummation
Devoutly to be wish’d. To die, to sleep;
To sleep: perchance to dream: ay, there’s the rub;
For in that sleep of death what dreams may come
When we have shuffled off this mortal coil,
Must give us pause: there’s the respect
That makes calamity of so long life;
For who would bear the whips and scorns of time,
The oppressor’s wrong, the proud man’s contumely,
The pangs of despised love, the law’s delay,
The insolence of office and the spurns
That patient merit of the unworthy takes,
When he himself might his quietus make
With a bare bodkin? who would fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death,
The undiscover’d country from whose bourn
No traveller returns, puzzles the will
And makes us rather bear those ills we have
Than fly to others that we know not of?
Thus conscience does make cowards of us all;
And thus the native hue of resolution
Is sicklied o’er with the pale cast of thought,
And enterprises of great pith and moment
With this regard their currents turn awry,
And lose the name of action.

Of course, the stock market had to come roaring back and it had to be extra sunny on the very day I was scheduled to have lunch with well-known Silicon Valley investor Ron Conway to talk about the worrisome state of the digital sector.

After all, it was Conway (pictured here), as well as Sequoia Capital, who sent out a stink bomb of an email last week to his start-ups to deliver a simple message: The Web 2.0 party is over.

Said Conway to his entrepreneurial troops as the market was crashing down and smacking tech companies hard in the process:

“Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again. The message is simple. Raising capital will be much more difficult now … the name of the game in this environment in some respects is survival–survival until conditions change.”

Survival!?! What ho? This from the man who is one of the more upbeat of Web investors! Who is one of the backers of Digg, Facebook, Twitter, Ning, Seesmic and 125 other Web 2.0 companies?

Ironically, our lunch yesterday was little more than a year after I had had another lunch with Conway, where I also made a video, and during which we had a lively discussion about a range of topics, including the venture business (better than ever!), innovation (better than better than ever!), monetizing video content on the Web (best of all!) and more.

Yesterday, the news was not so happy, of course, although Conway did try to explain in more detail exactly what he meant in his most recent email, which echoed one he had also sent out when the last Internet bubble was popping a half-dozen years ago.

And that is: You better have a year’s worth of cash and a revenue model or you’re toast.

Other than that, Mrs. Lincoln, he’s bullish!

Here’s the video (and below it, the one from June 2007, when things looked a little sunnier for Conway and Web 2.0):

I am sure this will be the dumb-as-a-box-of-hammers reasoning this group of Web 2.0 folks gives for this odd video effort, doing a lip-synch romp on their group vacation in Cyprus to Journey’s “Don’t Stop Believin’,” and then posting it for all to see on Vimeo.

It is titled: “20 world Internet citizens met in the Turkish Republic of Northern Cyprus in October of 2008 for a week of reflections on life, love, and the Internet.”

Um, kids, here’s a reflection: While you swim in that pricey infinity pool in your luxury villa, Silicon Valley is tanking all over the place. You might want to check your email and see if Sequoia Capital or Ron Conway has cost-cutted you out of a job!

Oh, sorry, BoomTown’s karma is so negative, isn’t I?

But the video gave me flashbacks to heedless-partying-until-the-bomb-fell attitude before the popping of the Web 1.0 bubble. It obviously still burns.

The group rollicking includes Blip.tv’s Mike Hudack, Facebook’s Dave Morin, Drop.io’s Sam Lessin and–well, um, eek, bad idea, awkward!–tech reporter Jessica Vascellaro of The Wall Street Journal.

Here is the video:

UPDATE: Apparently, the makers of the video have made it private on Vimeo and blocked it on YouTube, likely due to the reaction to it, but you can see it here.

Just as there is a tendency to inanely cheerlead the tech sector valuations on the way up, there is inevitably the equally ridiculous overreaction to the downward slide going on right now for digital companies.

Thus, while by no means the weakest sector of the economy, a range of tech stocks got hammered today in the markets, getting dragged down with the market at large as investors continued to fret about a sustained worldwide recession that government bailouts could not prevent.

Consider, after a week of getting socked, even more blows:

Yahoo (YHOO) closed at $15.19, down about 5 percent or 81 cents.

Google (GOOG) closed at $369.37, down just under 5 percent or $17.54.

Microsoft (MSFT) closed at $24.91, down 5.4 percent or $1.41.

eBay (EBAY) closed at $17.89, down 5.5 percent or $1.05.

Interestingly, the company with the most consumer exposure, Apple (AAPL), fell below $90, before closing at $98.14, up 1.1 percent or $1.07.

Now, there’s no question some of this tech carnage was due to the sector riding higher than most and worries about future results. Analysts are cutting estimates across the industry, in anticipation of weaker advertising and international markets.

At this point, as much as BoomTown has warned about the impact of the financial crisis on Silicon Valley, the meltdown in tech shares is beginning to feel a little undeserved and overdone.

After all, does anyone doubt most advertising will move online? Or that tech will not continue to permeate all sectors of our society and economy in the decades ahead? Or that digital companies, for all their fattening up of late, are not the most adept at adapting themselves to leaner times?

After all, everyone in tech did learn a thing or two from the bursting of the last bubble, which was entirely appropriate.

This time, while the industry had begun to party like it was 1999, the more recent expansion–aside from the lofty valuations for start-ups–was done in a way that will make it much easier to cut back.

I kind of feel like I might be channeling Chip Diller, the annoying ROTC cadet in “Animal House” (played by Kevin Bacon), with his famous line, “All is well, remain calm,” even as all hell was breaking loose around him (see video below).

But with a little rejiggering, it’s still the right prescription for the months ahead. In the short term, all is not well.

Nonetheless: Remain calm.

Last week, one of the things that struck me about the coverage of the two main tech conferences devoted to start-ups, DEMOfall and TechCrunch50, was the almost complete lack of discussion–or, more appropriately, worry–about the troubled economy.

This, even though the subprime mortgage crisis remains in full swing, along with the continuing turmoil around the stability of Wall Street financial firms, as well as Fannie Mae and Freddie Mac. Also, let’s not forget those sky-high gas prices.

Still, one entrepreneur after another got up and spun stories of companies built on fancy new ad models to come or the more hidden premise that they would get bought by a bigger fish up the food chain like Google (GOOG) or Microsoft (MSFT).

But as I wrote last week, all those stocks are suffering, and those companies are likely to be retrenching rather than expanding.

In fact, at an interview with Internet entrepreneur and investor Peter Thiel at TC50, he called Web companies undervalued. (See my video interview with Thiel here last November, in which he says a lot of the same stuff.)

As he told me almost a year ago, Thiel repeated his contention that the technology sector was still not in a bubble.

Well, perhaps not, but that’s actually because most companies in Web 2.0–despite their massive valuations over the last few years–aren’t going to have the chance get frothy and light enough to become so poppable.

Instead, most will likely fizzle away quietly, with no exits in sight as the economy weakens and puts a vise grip on companies that cannot survive the very tough financial road ahead.

That means the popular Web 2.0 maxim of “growth before profits” is in for a very bumpy ride.

It’s going to be especially true after this weekend’s latest round of bad news–the bankruptcy of Lehman Brothers, the sale of Merrill Lynch, the impending crisis at banks like Washington Mutual.

And with more to come, I could not help but remember the well-known political phrase used in the 1992 presidential race by the Clinton team: It’s the economy, stupid.

And that’s true even here in Silicon Valley, where the sun always seems to shine, even as the clouds gather.

(Also, here is a very good piece on the topic by CNET’s Larry Dignan on some more details of the impact on tech firms, specifically on selling products to financial firms.)