I think the move to reenter the Internet is a smart one myself. For one thing, it obviates, or undercuts, the many class action lawsuits against ZAP. (That's worth considerable savings there -- so might as well invest it in another run at becoming a portal player.)
Long term credibility is another issue. But I think if management had been entirely duplicitous they would have stayed the course on their original strategy, at least to the point of putting up a portal page. Unless people forget, however, Internet stocks did experience a serious downturn back in October; they've only recently come screaming back to again ridiculous levels, despite the warnings of many analysts that what we're dealing with here is tulip bulbs.
And don't forget: ZAP could have gotten out of the Internet altogether, but they held onto two Net 'zines. I suspect that they gained some experience in the process, and that we can soon expect a real launch. The name Zap is itself catchy and shouldn't be too hastily dismissed as a potential barn-burner.
At this point, I'm ready to ride the wave of press releases that will no doubt soon ensue. ZAP was once at $24, and I see no good reason why it can't be there again in another month or two. Will that mean that ZAP is worth $24 a share? Who knows? On the other hand, is AMZN worth $315 a share?
All the portals are now overpriced, in terms of anyone wanting to buy advertising space on same. Is there a market for a second or third-tier portal page, where the prices are cheaper, but the exposure still good? Undoubtedly.
Are there Internet partners that haven't paired up yet? Of course. Maybe ZAP and MCNS (and others like the latter) ought to start eyeballing each other at this stage.
There's no compelling reason to think that the Net is totally fenced off property (no other players permitted) at this point. It's a gamble, for sure. But I'm going to wait this one out just to see what happens. I should add that I can afford to. Others may be in a different position and should consider their own situation. I made money in both MSPG and MCNS. If I lose it all on ZAP, I'll still break even.
And don't forget: this time ZAP will have to follow through!
Bootz |
