from cmgi webpage, i post questions and answers with ny times reporter. can he speak english? can you understand him? r things bad, so he talks like this - to avoid facts, logic? is it because he talks, thinks fuzzy, that things r bad? were times, reality, questions too tough? am i missing something?
am i too upset because of trouncing of the stock?
Included below are the questions provided by reporter Saul Hansell for his Sunday New York Times feature story, as well as the actual text of responses submitted by CMGI Chairman and CEO David Wetherell. 1) What do you see as the opportunity for CMGI?
2) After you achieve profitability what are the engines for growth?
3) Does the current segment structure represent the best long term approach?
4) Is it important that none of your portfolio companies are No. 1 in their fields?
5) Where are the opportunities to build market leaders?
6) How well has the transition from an investment company to an operating company worked?
7) What are the strengths and weaknesses of the central CMGI management?
8) How would you define your own role?
9) Is there a need for a senior operating executive?
10) What is your philosophy about how CMGI companies should do business with each other and are combined with each other?
11) What is the trade off between independence and synergy?
12) Are there financial reporting issues?
13) Many people say the strength and weakness of CMGI has been its quickness to adapt to new circumstances and modify its strategy. I'm interested in your reaction to this thought?
14) I am also interested in your thoughts on the relationship between the company and its stock price and the impact of such a great rise and fall?
15) State and prospects for Engage?
16) What about AltaVista?
17) What happened with iCast, MyWay.com and 1stUp .com?
18) Other questions: CMGI Stadium and other marketing strategies?
19) Your compensation structure?
20) Capital resources and burn rate?
21) How long have you been looking for a COO? Why did you decide to do this? What sort of experience do you want in that person?
22) Regarding conflicts between CMGI companies, some CMGI CEOs have wondered why you and other CMGI board members didn't recuse yourselves when deals between CMGI companies were discussed. Isn't that a conflict of interest? Similarly, why didn't you recuse yourself from the GeoCities board discussions of the Yahoo bid, considering that Lycos was a possible bidder?
23) What do you make of the money expended towards strategies you have now abandoned? Specifically, the $120 million portal advertising campaign by Alta Vista. Also, the money invested in iCAST, MyWay, and the now closed @Ventures companies. How much do you expect to write off as a result of these changes?
24) People who have worked with you characterize your style as impulsive, making decisions based on enthusiasm for technology and a sense of the market's appetite of the moment. Does that sound accurate and to the extent you think it is, how do you feel your decision making style has served you and CMGI?
25) David Wetherell's (closing) remarks to Saul Hansell
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1) What do you see as the opportunity for CMGI?
a) Given the current state of the Internet, and Wall Street's current disposition to all-things-dot-com, we believe that CMGI has an extraordinary opportunity. First, the growth of the Internet remains at record levels, as millions of new users join the Internet community daily. More, the introduction of higher-speed, affordable, connections are leading individuals to spend more of their free time online. In turn, greater volumes of content need to be available to the users, on a global basis. Simply put, the growing demand for traditional and multimedia (interactive) content are creating huge demand for infrastructure services, solutions, and management.
b) CMGI recognized this trend several years ago forming NaviSite and, more recently, CMGIon to address many of the complex, global-scale issues and needs. Today, we are finding organizations facing the inordinate challenge of designing, building, deploying and supporting web-based content systems. This, in our mind, closely parallels the environment of large-scale corporate computing in the late 1970's and early 1980's. Just as the explosive demand for computing resources (to keep companies competitive with one another) led to major multi-billion dollar growth of hardware and out-sourcing opportunities (e.g. EDS), we expect a similar phenomena to become present in the Internet space. This creates opportunities for CMGI companies, including NaviSite, Tallan, Activate, and AltaVista near-term. Longer term, we expect that media attention will transition (and stay more firmly planted) to the online, interactive medium. This suggests that services for advertising management, profiling and support will become ever more necessary as product vendors turn to the interactive venue of the Internet for one-to-one marketing opportunities.
c) From a development perspective, we see the promotion of wireless devices and services by telephone carriers (e.g. the cell phone companies) as a major catalyst for infrastructure and services growth in the networking, storage, and wireless spaces - each areas where our CMGI@Ventures arm is actively expanding our portfolio representation. Back to Top
2) After you achieve profitability what are the engines for growth?
a) Again, the global growth of the Internet and trends to outsourcing create recurring revenue opportunities for several of our portfolio companies. Near term we expect that the need for organizations to identify and organize massive amounts of unstructured corporate data will create even greater opportunities for AltaVista. In this context, we believe AltaVista can enjoy a software business model's high gross margins and increasing operating leverage.
b) Similarly, the software portion of Engage's revenue streams lend themselves to considerable revenue growth and recurring streams (via annual licensing agreements). Tallan's ability to develop solutions for complex interactive computing applications, and the demand for ongoing support and maintenance present strong potential revenue catalysts. NaviSite's managed services offerings, and expanding storage services offer high growth and strong recurring revenue potential as well.
c) Finally, I'd draw your attention to uBid. While the auction business may not be terribly sexy, we are finding that the viral nature for B2B and newly introduced B2C offerings offer great return on invested advertising / marketing dollars. This is clearly a volume-oriented business space, and we believe that the markets (corporate and individual) will expand their adoption of the uBid space as audiences grow in size and as uBid is able to offer first-line goods in addition to traditional auction merchandise. Back to Top
3) Does the current segment structure represent the best long term approach?
a) We certainly recognize the fluid nature of the Internet space and Internet audiences - so flexibility in the segment model is essential. By its very nature, the segments will expand and contract following market opportunities and conditions. Over time, we would expect new sub-segments to emerge and create rapid growth opportunities while others consolidate.
b) Our objective was to organize the 17+ operating companies into a cohesive, related taxonomy. From our point of view, the use of the six segments have enabled CMGI to focus our efforts and resources on a more concentrated basis. The results, then, are almost self-evident: accelerated growth rates, leverage in reducing operating expenses, and more effective communication and teamwork, within, and between, the operating companies that reside in today's six segments.
c) Through the segment vehicle we believe that CMGI will be able to more effective identify and exploit synergistic opportunities - offering members, and investors greater economic leverage, accelerated growth and increased long-term profitability. From a 10,000 foot perspective, the segments, which today number six, present a value-add tool for our companies, employees and investors, alike.
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