CBS buys CNET. Comcast buys Plaxo. Ask.com buys Dictionary.com.
There is something happening here, and what it is ain't exactly clear. But those of us with memories that extend to the previous millennium do detect a bit of irrational exuberance.
Remember when we partied like it was 1999? We are starting to have painful reminders of those heady days when it was morning in America every single day at 9:30 a.m. sharp.
CBS’s decision today to pay almost 45 percent more for CNET than shareholders thought their company was worth yesterday may not qualify as the dumbest old media foray into new media, but that might only be because there is plenty competition for that distinction:
Who can forget all the love (Ted Turner notwithstanding) when insightful old media company Time Warner saw the infinite and indisputable wisdom of being taken over by new media vanguard AOL?
“AOL Time Warner” memorabilia is probably worth more than most people now think the merger was. AOL is a division in the company, which is now Time Warner again, and it doesn’t take too much imagination to see a future when it is a separate company again.
It's been less than a decade since CMGI, the “Internet Incubator,” thought $2 billion was a good price for Alta Vista. What’s that? Never hear of either of them?
CMGI now “operates a number of core businesses that support technology-driven companies in distinct ways,” whatever that means. It’s trading above its historic lows but well off its lifetime high of more than $2,000 per split-adjusted share. And Alta Vista, one of the original portals, still has search (really, it does, despite its sub-1% market share) but it is the site's Babelfish translation site that people seem to know about.
How about Netscape, the company that started the internet business frenzy with a product it gave away in a market even it disclosed to potential investors was likely to be dominated by Microsoft? An eye-popping IPO priced at $28 did nothing to deter day-one investors who bid the company up to as much as $74.50.
Flash forward three years to 1998 and AOL -– at this point a “mature” new media company -- thought it had to have this jewel in the crown at a 45% parity to its own inflated share price, or more than $4 billion. Nowadays Netscape doesn’t do browsers anymore and lives on only as another entry point to AOL’s stable of web properties.
There are success stories, of course. Google is still on the ascent, its domination of ad-supported search the driving force behind such maneuvers as Microsoft’s attempted takeover of Yahoo.
Ebay is still going strong, though its purchase of Skype for $2.6 billion might qualify as curious money, if not outright dumb. On the other hand, its acquisition of PayPal was a slam-dunk.
Amazon.com is reinventing itself as a cloud service with considerable street cred. Yes, it still sells lots and lots of stuff.
What may distinguish these and other successful companies in the internet space is adaptability rather than a determination to remain independent – or to position itself for a lucrative buyout.
It isn’t clear what CBS has in mind for CNET – or, for that matter, what Microhoo would actually be. But if we have learned one thing from recent history, it is this: evolution is a bitch. And, overpriced.
