Marimba in Push for Stock Offering Amid Net Frenzy

Marimba Inc.--a leading purveyor of the once-hyped “push” technology to broadcast news and update software over the Internet or corporate networks--is preparing a first-time public stock offering, industry sources said.

While Marimba executives are in a mandatory “quiet period” that prohibits them from saying anything that could be construed as touting their stock in the weeks before and after the offering, industry sources confirmed that the deal is being hammered out and that a filing will be made with the Securities and Exchange Commission in the next few weeks.

“It is fair to say that process is underway,” said one person close to the company.

Barry Newman, managing director and head of global high technology for investment bank Salomon Smith Barney, who has not been involved in the deal, said Marimba, like many Internet companies, has long been considering an IPO.

“They’ve been thinking about it for a year and a half,” he said. “It’s a robust environment for them to go public.”

But several analysts suggested that Marimba’s plan reflects more of a desire to cash in on the public’s apparently insatiable appetite for Internet-related stocks than the company’s business prospects.

Push technology--which turns a personal computer into a news terminal with continually streaming headlines, stock information and graphics--was widely considered a breakthrough idea in 1997. But the concept turned into a target of ridicule last year as it became widely viewed as a network-clogging distraction.

Corporations can use push to communicate with customers or employees, but few have done so because “most companies already have a push system,” said Ted Julian, an analyst with Forrester Research in Boston. “It’s called e-mail.”

Another leading push company, Sunnyvale, Calif.-based PointCast Inc., withdrew its IPO plan last summer, deciding to seek a strategic partner instead.

While PointCast has positioned itself as a media network that broadcasts news and information over the Internet, Mountain View, Calif.-based Marimba specializes in letting network administrators remotely and automatically install or update software programs on hundreds or thousands of computers.

Marimba’s customers include Intuit, OnSale, Lockheed-Martin Networks and Sun Microsystems, and current sales run about $6 million per quarter, according to another source close to the company.

Chief Executive Kim Polese “at one point had the media exposure of Madonna, but much of that buzz has subsided in a big way,” said Patrick Keane, an analyst with Jupiter Communications in New York.

Still, none of the analysts ruled out a successful IPO, given Marimba’s high profile in Silicon Valley and the Internet stock frenzy.

Last year, investors drove up prices for some Internet IPOs 200% and more in just a few hours of trading. High-tech companies grabbed headlines as six of the market’s all-time best first-day performances occurred in 1998, including New York-based The globe.com, whose stock rose 606% on Nov. 13, and Broadcast.com of Dallas, which rose 249% on its first day in July.

“The marketing, the sterling venture backing this company has and the sex appeal of Marimba will eclipse the concerns about how well the technology really works and how much money there is to be made on it,” said Gail Bronson, a Silicon Valley venture capitalist and an analyst with IPO Monitor, a Calabasas-based data firm.

Sources said several Wall Street investment banks are now using Marimba’s software.

“If you think back to the Netscape IPO, the reason it did so well is because the Wall Street firms were using Netscape,” Bronson said. “Now that Marimba has the Wall Street endorsement, it makes it a lot easier to go out.”

Piller reported from San Francisco and Vrana from Los Angeles.