Monday, July 21, 2003

Web companies buy mind space We've already noted several mergers and acquisitions in the dot-com world, including those of US Interactive (now InterActiveCorp) and Yahoo. The pace of acquisitions keeps speeding up, according to a story in Business Week ("Dot Coms Choose Their Partners," (7/17/2003).  In the last few months, for example: Yahoo's move to take over Overture followed Overture gobbling up AltaVista and Norwegian Fast Search & Transfer, while Yahoo had already acquired search engine Inktomi. Aside from changing its name, InterActiveCorp recently acquired LendingTree, the major Loan Company on the Web. It is added to such other sites as Expedia, Hotels.com, and TicketMaster. Spanish Telefonica announced it would acquire portal Terra Lycos Online advertising companies FindWhat.com and Espotting announced merger plans RealNetworks acquired music download company Listen.com Roxio acquired music download company Pressplay. eBay announced that it would acquire EachNet, a Chinese online auction company. After years of irrational exuberance followed by numbed confusion, the surviving dot-com companies are at least sorting out what is still valuable and they are on the market for proved Internet businesses. Many of the mergers are defensive, as companies need to avoid being squashed by rivals like MSN, Apple, and Google. Others want to extend their services to international markets. Along with the acquisitions, several companies look to be going public soon. They include search powerhouse Google and travel site Orbitz. The Business Week article concludes that MSN needs to acquire its own search engine (they now use Overture), and may even make a hostile bid for Overture. The article sees several of the modestly successful dot-coms as being the next targets. The idea of an oligopoly on the wide-open Web seems paradoxical as we've pointed out before. True, there's no limit on the number of sites than can be created (shelf space). But the problem is getting attention in the vast, echoing void of the Internet. The few sites that do have a revenue potential and which have any brand recognition left are valuable commodities. Mind space is the most valuable commodity on the Web. 6:17:08 PM

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