Thursday, May 27, 2010

Yep, it really happened (just not quite the way I remembered it)

My visit to the Valley last month was a chance to look back at the dot-com Madness from a safe distance and even to appreciate what's become of some of the leftover pieces. Throughout the visit, one tale from those times kept coming to mind: Excite@Home buying online greeting card provider for two billion dollars, half of it in cold hard cash, even though it had never produced any revenue, much less profits.

Well, not quite. It was actually $350 million in cash and stock worth (at the time) another $430 million, for a total of $780 million. True, BlueMountain had indeed never turned a profit, its main product was free, it didn't advertise and the company was well-loved for not trying to "push related services on its users." Nonetheless, they did have some revenue (not sure how much) from a deal with an online florist.

So everything's true but the facts. Even if it was only $0.8 billion for a company with a little revenue, it still seems no less jaw-dropping.

Just under two years later, Excite@Home sold to American Greetings for $35 million in cash. Excite's spin: "For Excite@Home, the sale of maps our action plan to focus on broadband and to bolster our cash position and lower our operating costs." The next month, Excite@Home filed for Chapter 11 bankruptcy. Its buildings on the 101 had steadily emptied out as the bills came due, and they stood empty for what seemed like forever before eventually turning into a medical center. Not the only time a pre-dot-com dinosaur snapped up a dot-com brand for a song. The purchase of eToys by Toys"R"Us comes to mind.

The excite brand lives on, though, having changed hands a few times. Wikipedia has the rundown on that.

Oh yeah: Not only did they buy BlueMountain for $780 million, they didn't buy Google for $750 thousand, forcing Sergey and Larry to neglect their studies and make a go of it on their own.

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