Re: CMGi Goes Wireless...

Date view Thread view Subject view Author view

From: Adam Rifkin -4K (
Date: Thu Mar 09 2000 - 16:50:43 PST

I wrote:
> > (That fund's latest investment, I kid you not, is a $12 million
> > investment in, the "Internet's first seafood market
> > maker" which has closed more than $41 million in venture funding
> > during its first six months of operations. GoFish is headquartered
> > in that hotbed of Internet development: Portland, Maine. :)

Tom replied:
> It's a real business, Adam -- I wrote about the company in August of 99 --

That it's a real business, I have no doubt. The wonderful thing about
all of these "New Economy" companies is that they are populated by smart
people doing real things to change the way the world works. And the
potential stock market gains available for a successful endeavor
incentivize the smartest people in the world to work on all kinds of new
ideas. It really is a great time in human history to be an entrepreneur.

> and a $12 million investment is pretty modest.

I can remember long long ago when $12 million was a lot of money, but
you're right, in the "Nasdaq 5000 World" $12 million is now just "Round A
Money". When an idea like AllAdvantage -- that's the company that pays
you to surf the web -- can get $100 million from Softbank and others in
Round C money, you realize just how much money is out there to be thrown
at ideas nowadays. It is at once amazing and obscene, but like I said,
it does inspire the smartest people in the world to go out and try to do
interesting and radical things.

> And as for Portland, Me: The whole pont of doing REAL business on the
> Net is that it will happen in real places--Portland happens to be a
> key place for the fish business. (And Portland does have two big
> semiconductor fabs.)

I wasn't knocking on Maine, we're indebted to the state for giving us LL
Bean and Stephen King.

What I was knocking on was the fact that it USED to be easy to follow
all of the startup activity in America -- it was pretty much centered in
Silicon Valley and Boston. Then, we added Seattle and Austin Texas to
the map. Now we have to keep track of activities in a dozen cities if
we want to be "up" on what's going on.

We used to just have to read the New York Times and the Wall Street
Journal. Now we have to stay on top of The Industry Standard, Red
Herring, Forbes, and about a dozen more niche newsletters.

I'm not lamenting the fact that the amount of stuff we need to keep
track of is growing exponentially. What I'm lamenting is that with this
exponential growth of information, my productivity tools have gotten no
better: I have nothing better for searching, filtering, and organizing
information now than I had, say, in 1997.

One hobby I enjoy is watching CMGi (the company) because, as I said in
an earlier post, they are always chasing whatever is hot. CMGi of
course had a conference call today and the feedback from it was
illuminating. Here's their long term plan:

> From CMGi's conference call today:
> Question: What are the top 3 priorities over 4-6 quarters and 2-3 years?
> Answer: Top is to launch the 2 new businesses (a global web platform
> company and a caching company) -- each of which promises to be as much
> or greater value than current holdings
> - Next is to move companies to profitability
> - Next is acquisitions
> - Next is organic growth
> - Stay ahead in global perspective (investments, r&d)

Regarding the caching company, we know from his message board posts that
CMGi's CEO David Wetherell has a lot ofrespect for Mirror Image and
Akamai (in fact, CMGi owns a bunch of Akamai shares), so it seems
intuitive that CMGi would want to start its own caching company. [Also,
from the press release: "Akamai Technologies Inc. will collaborate with
CMGI on the development of new technologies to create and deliver
dynamic content and applications. Additionally, CMGI and Akamai
announced an increasing number of cooperative efforts to enhance the
performance of company sites within the CMGI network. CMGI-related
companies currently partnering with Akamai include NaviSite, AltaVista, and NaviNet."]

I'm still not quite sure what CMGi means when it says it wants to build
a "global web operating system". I posted CMGi's last comments on this
matter a few weeks ago:

Holy knockers, in that post (February 27) MicroStrategy was only an
$11.5 billion company?! As of its close today (March 9) MicroStrategy
is now a $22 billion company. That's a solid double, folks, in just
two weeks. Unbelievable. [Meanwhile, the service that's
piping junk to my Nextel phone has gotten this strange bug where it
sometimes feeds me stock quotes that are negative...]

CMGi's a really interesting company to watch; three of its most recent
spinoffs are Engage, Venator (was Chemdex), and NaviSite. Each of them
IPO'd in the middle of 1999 with market caps around $500 million apiece,
if I recall correctly. Now Engage is an $10 billion company (once it
completes its acquisitions of Flycast and Adsmart), NaviSite is an $8
billion company, and Venator is a $6 billion company. And they're
taking AltaVista public in early April, they claim. Hmmm. CMGi's stock
price compared with its siblings is looking really low again...

Well, relatively speaking, at least. But see, this gets back to the
point Tom was making, that $12 million is pretty modest as an investment.
In the "Nasdaq 5000 World", $12 million *is* a modest investment, just
like CMGi having a market cap of $39 billion "looks" low compared with
the value of its public holdings (must be about $24 billion now and
rising, especially with AltaVista IPOing around the corner...):

But how can you NOT root for a company that just announced that its
"Internet Segment Revenues Grew 2251% Over Prior Year Second Quarter"?

And heck, CMGi is already making good on their plans to "go wireless".
[From the press release: "Since the quarter end, CMGI announced its
participation in SoftNet Zone, a major initiative designed to bring
mobile computing and Internet services, both wired and wireless, to
business travelers worldwide. Under the agreement, CMGI and Compaq will
provide funding, expertise and technology to SoftNet Zone, which will
operate local area networks and computing business service centers
throughout public facilities such as major airports, convention centers,
and hotels. In addition, Nokia Corp. and Cisco Systems Inc. will provide
technological and equipment support to SoftNet Zone."]

Okay, I admit it, CMGi-watching is a hobby is as productive as my
hanging out on Napster all day. That is to say, it FEELS productive,
but at the end of the day I still have real work I need to do... :)


What have I ever done to make you treat me so disrespectfully? -- The Godfather

Date view Thread view Subject view Author view

This archive was generated by hypermail 2b29 : Thu Mar 09 2000 - 16:51:04 PST