March 2004 Archives
Russ Horowitz's Marchex (Nasdaq:MCHX) went public today. The IPO came out at $6.50 and closed at $8.88 (up 36.6% or $2.38 for the day). [I want to add that I purchased shares in Marchex today.]
Russ was the creator of Go2Net several years ago. Go2Net was sold to Infospace. Russ proved to be adept at acquiring and creating a variety of connected services at Go2Net.
Marchex is in the paid search business and has a variety of brands including A-HA and Enhance.
Marchex's availability on the market means that there are four (I believe) "pure" search companies that are public (findwhat.com, askjeeves, looksmart and mamma.com). Beyond these four we also have the public Yahoo-Overture and MSN that are directly involved in search, but whose respective businesses go into several other areas of information and technology. We can add InfoSpace to this latter category as well.
The successful offering of Marchex and the huge jump in value of mamma.com earlier this month will certainly spur Wall Street houses to bring out more IPOs in the search and paid search area.
One can only imagine what the first day offering of Google might bring! The prospective Google offering could easily trump Marchex's results by 5 times.
It is remarkable that some people still don't understand how the Internet
works. Just the other day, executives at CMP, a print publisher, decided to
block links from one of our Web sites LinuxToday.
CMP wasn't happy because LinuxToday published an excerpt from an article at CMP's Information Week.
Apparently, this block was the print publisher's way of punishing us for
what they felt was an unfair use of their content. Of course, they did far
more harm to their own business. LinuxToday's use of the first few sentences
of an article is a popular form of Web publishing that is protected by fair use rules.
Many of CMP's own employees understand this and they frequently ask our LinuxToday staff to include CMP's articles. The value it gives to CMP is not just the flow of new readers but the value of search engine cross-linking. I guess things have not changed too much at CMP; this is the same management that paid Vanity Fair columnist Michael Wolff close to $10 million for the name "net guide."
Last Friday brought news of two Internet deals. First, Yahoo purchased Kelkoo, a French company that runs online shopping comparison sites in nine countries, for approximately $575 million in cash (about 16x Kelkoo's yearly revenues). And Infospace announced its acquisition of Switchboard (an American localized search company) for $160 million in cash and stock (paying 15x yearly revenues).
These acquisitions hammer home the trend that Internet shopping and search information are two hot commerce areas. We are also seeing a rapid consolidation of properties in these sectors.
The large multiples being paid (in excess of 15x revenues) further indicate that the whole Internet sector is getting white hot. Some pundits are saying that the excesses of the 1990s bubble are erupting again. But 2004 is different than a few years ago because companies being acquired today are solvent, profitable and grabbing market share.
Jockeying amongst the biggest players is fierce. You can count on deals from Yahoo, eBAY, Amazon, InterActive, Google and others to accelerate in the coming months. Lots of excitement for the Internet Planet!
One of the themes of this blog is "growing business online." Two news stories in the past few days certainly exemplify this theme.
The New York Times had a story today by Richard Sandomir titled "Baseball May Offer Stake in Web Business." The story deals with the success of mlb.com and how major league baseball is considering a public offering for a portion of the Web site, which might have a value of as much as $1 billion.
Glory to the Internet! The 30 major league teams and their respective owners could never have imagined that their franchises would someday have an Internet media stake of such potential value.
I am sure the baseball owners would have no argument with the idea that they have "grown their business online." As an aside I must also congratulate star JupiterResearch analyst David Card for his insightful thoughts sprinkled throughout the article.
On the Diet front: DM NEWS had an article by Mickey Alam Khan (March 22, 2004) titled "South Beach Diet Grows Fat on Web Site Traffic." Khan has this amazing stat: Since the June launch of the South Beach diet site "more than 200,000 people have signed up at $5.00 a week for access..." This is "growing business online" at its best!
So there you have it. Baseball and diets making big adjunct dollars online. Of course the tie-in for Jupitermedia is that our Internet Planet trade show coming in June is loaded with JupiterResearch sessions to help all organizations grow their businesses online. Check out the program and the opportunity to meet one-on-one with our JupiterResearch analysts.
A quick update on the continuing saga of the way the Mandalay Bay Convention Center and hotel group does business.
Readers know that the Mandalay Bay group used unethical trade show business practices against Jupitermedia and our cdXpo trade show last November.
I have been warning exhibition managers to stay clear of the MBCC and a few unfortunately have been silly enough to book shows at the far end of the Strip.
I see that the Mandalay Bay people are advertising on the weekly email newsletter of the Expo magazine Web site meaning that they need to drum up business. Needless to say, if you are a trade show manager check in with me about the way Daniele Babbalino and Neil Mullanaphy do business in Las Vegas.
I cannot tell a lie about my Treo 600. I raved about this smartphone several weeks ago in this space. But alas, there is now a real problem that I am finding with this device.
I am now awaiting my second replacement. The problem has to do with an apparent design flaw with the speaker. After a few weeks use in two cases, I have only been able to communicate by using the speaker phone feature of the Treo 600.
PalmOne has been terrific on customer service in terms of replacing the broken phones. Unfortunately it is a real pain to have a cell phone that does not work properly.
I am not privy to PalmOne's experience with the speaker problem that I have encountered, but I know my son who lives in Los Angeles encountered the same problem with his Treo 600.
Alas, I will give the device one more shot and if the problem crops up again, I will have to switch back to the newest RIM.
Needless to say I am greatly disappointed, but I will keep you informed of my Treo 600 saga.
The seminar program for the first Internet Planet trade show is posted. It appears that Internet business people like the program as registrations are coming in nicely. And on the exhibition front, we now have a few exhibitors with several in the wings.
The philosophical rationale for Internet Planet is GROWING BUSINESS ONLINE. And growing business online is sweeping the world. The three seminar tracks at Internet Planet provide a good balance between the practical and the analytical. The seminar leaders are a mix of Jupiter Research analysts and individuals from organizations who are providing case studies of how they are growing business online.
I will keep you posted on developments with this show as well as our DRM event that I mentioned yesterday. Both shows are new, but needed. Of course that is my opinion, but (as stated) the early signs point to our being correct about the necessity for each.
The Internet Age has certainly brought all media companies face to face with the topic of Digital Rights Management. Jupitermedia, the company I work for, faced major DRM considerations when it purchased ArtToday --- an online seller of clipart and photos.
During our due diligence of this acquisition, we came to realize that there was a paucity of information about DRM issues. We jumped into the topic and within a few weeks acquired DRMwatch.com (one of the few editorial products devoted to this topic) and launched a new trade show called DRM Strategies being held this April in New York City. I might also add that our Jupiter Research division is launching a DRM research practice to coincide with the aforementioned trade show.
We were also fortunate to work out an editorial relationship with Bill Rosenblatt. Bill has long been writing about DRM and content management and is the founder of DRMwatch.com. Bill also put together the strong seminar program for our April show.
The interest in our show is strong which indicates that there is a need for such a property. Content security is a complex subject that is getting more difficult every month. We are excited about being in this field and look forward to the first DRM Strategies show in April.
Just a thought for readers. We all get direct mail at home. My guess is that 80% of postal mail we receive every day is so-called junk mail. This junk consists of promotions for a variety of goods and services. My second guess is that about 1% of the junk is actually read.
Let's turn to spam. My email is about 70% spam. I never open junk email. And I can delete it faster than I can flip through my junk postal mail. Perhaps we are always going to be plagued by spam (just as we are always going to be plagued by junk mail)?
There are differences of course. It is rare if not impossible to get x-rated junk postal mail (or any such offensive postal mail).
I am not condoning spam, but suggesting that history might be on the side of the spammers. I get the feeling that whatever is done to eliminate it in terms of charging for email, spam filters or whatever, we will still have spam as part of our everyday life just as we continue to have junk postal mail.
The Wall Street Journal had a good story today about the arrangement between
eBAY and Pitney Bowes. This marriage of an Internet company and an old-line manufacturer of postage machines is a great commentary on how the "Internet Grows Business."
eBAY sellers can now download postage via a PC and print shipping labels with postage on a home printer. No special software is required. Also a user does not have to have a special postage account. Instead an eBAY shipper can transact postage transactions through eBAY's PayPal division.
Needless to say, this is a terrific boost for Pitney Bowes. It can now claim a power position in the Internet space.
As eBAY continues its rapid growth into selling just about anything, it will be able to make more and more arrangements with "old-line" companies in order to make the eBAY "experience" that much more fluid.
I have a fan! Check out a new blog called MucklerMedia. My friend who writes this is having a blast.
Obviously my "fan" is a bitter person. Most likely someone who has failed miserably in the Internet business and probably everything else in life. One can tell the writer is unemployed since the writer posts several times per day ---obviously nothing else to do? My writing friend even posts on the weekend! I am just amazed that my modest efforts have created a blogger with such pursuit and dedication.
Anyway, I am pleased to have a new pen pal. Write on and bring in the publicity. Thanks.
Day four is concluding at Search Engine Strategies New York. Over 3000 total attendance --- our largest SES to date. There have been numerous news articles in the trade press about the show and all tend to be very positive.
Another barometer of the heat surrounding Search is the financial news that appeared this week. First we had Mamma.com reporting a profitable quarter (which resulted in a large gain in the common stock). Secondly we had news today that AskJeeves.com has agreed to purchase Ask.com for over $300 milliion. The market received the offer well as AskJeeves' stock price jumped.
I might also note that Marchex (owner of Enhance.com), the company headed by Russ Horowitz of Go2Net.com fame, is about to go public.
We are looking forward to our first SES in Toronto in mid-May and of course the other 7 SES events we run annually (with more countries to be added shortly). It is a great time for Internet marketing. Certainly no organization can be without an Internet marketing position in order to grow business online --- and more on that in the coming months.
Day three of SES (Search Engine Strategies) New York starts in a few hours. This post represents a bit of reflection on what SES means in terms of trade show evolution and Internet evolution.
SES started in 1999 with one track of seminars and a handful of exhibitors. Nobody involved at our company had any idea and neither did Danny Sullivan (the one and only search engine god) that SES would evolve into the most exciting trade show in America (perhaps the world) today. But then again nobody (in 1999) knew that search was going to be the killer application of the Internet.
The evolution of search and paid search is miraculous in the annals of advertising business history. Paid search is becoming one of the largest parts of paid ad placement across all media. And this is what is driving the growth at our SES shows. Marketers cannot get enough information in this field. It is a dynamic one that continues to evolve.
And this brings me to trade show history. I have learned a few things in 30 years in the business. One of these items is that in order for a trade show to grow, the topic it covers must be dynamic. That is, it must continue to morph -- almost to be confusing. The more confusing it is the better and bigger the trade show gets (both in terms of paid seminar attendees and exhibitors).
I have been fortunate in the past few years to have attached myself to a show called Internet World (1993-1998) and now Search Engine Strategies (1999-?). Internet World is what I would call a horizontal show --- it covered everything to do with the Internet.
But now vertical shows are "in vogue." And nothing is more stylish than Search.
We are about to see the morphing of the Yellow Pages into local search and the rapid development of niche search sites for a variety of topics and industries.
Just a few thoughts late at night after the first two days of SES.
Danny Sullivan's keynote at Search Engine Strategies filled the grand ballroom at the New York Hilton to capacity (and then some!). More than 1,400 people packed into the ballroom.
Danny started things off with a take-off on the Billy Crystal opening at the Oscars with terrific footage of a spaceship battle between a "Google craft" and a "Yahoo spaceship."
I cannot go into all that Danny said. However I came away with with a few salient points:
1. While Google is number one and Yahoo is number two, vertical and or specialized search services can thrive.
2. We ain't seen nuthin' yet in terms of where the search field is going and growing.
The exhibit hall is about to open. More later.
I was a panel member with Bob Davis of Highland Capital Partners this afternoon. Our panel dealt with the VC investment climate in the Search field.
For those not familiar with Bob, let me refresh your memories. Bob was the first employee and only CEO of Lycos (1995). Lycos went public in 1996 and Bob rode the Interent wave for four years --- Lycos was sold to Terra Networks in 1999 for nearly $13 billion. Bob has been in the VC arena since the sale.
One point to remember from Bob's talk today: Lycos has some interesting assets that might have been overlooked. Mainly that it has a variety of "communities" such as Tripod that have never (until now) been terrific at garnering revenues. However that is about to change now that contextual ads are the rage. This development means that Tripod's traffic/community might very well become a signficant money-maker. The same holds for several Lycos communities.
I am at our Search Engine Strategies trade show at the New York Hilton. Today is a pre-conference day. The show continues Tuesday-Thursday (exhibits are on Tuesday and Wednesday).
Over 1000 paid attendance has been achieved and of course these numbers will grow over the coming days. Total attendance (including exhibitors and exhibit hall only attendees should swell our numbers to over 2500).
We have about 80 companies exhibiting starting tomorrow.
The attendees come from around the world --- I will have more on this in a few days.
It is exciting to meet with people from the old Internet World days. I just ran into Jeff Dearth. Jeff sold the first ad space for a Web site back in 1994 --- it was Lufthansa airlines. Jeff was then publisher of The New Republic magazine and started a new division devoted to selling magazine subscriptions online. He later worked for me at Mecklermedia and now is with DaSilva and Phillips in Washington, DC (deal makers in the media space).
Jeff and I were thinking today that the SES show is an adjunct of what Internet World was all about. Of course it is very vertical. And only vertical shows work these days. If this were 1996, paid search and search in general would have been one session during the IW show.
I will have more later today.