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To: Windseye who wrote (64045)	6/24/1999 7:45:00 AM
From: Kenya AA	Respond to of 97611

Doug: *OT* Well, I can't say it any better than M2 so I'm going to steal his lines .... CMGI is a great company for the simple reason that it is at the heart of the greatest innovation to hit us in our lifetimes -- both as an investor and now, as can be seen by its Lycos and AV moves, as an operating company. It really can't be beat. As a media company, marketer, retailer, back-room operation it is a major player. CMGI has its tentacles in virtually every aspect of the internet. This article kind of explains the CMGI strategy: At CMGI, Wetherell Stresses Bloodlines Over Bottom Lines By George Mannes Staff Reporter 4/20/99 12:17 PM ET David Wetherell has been working hard to get his message out. Now the question is whether the market will listen. In a two-day conference with investors and analysts last week, followed up by a breakfast meeting with the New York InfoTech Forum, the chairman and CEO of CMGI (CMGI:Nasdaq) tried to explain why the company is more than just a stock picker with a bag full of Internet holdings coming to market. The key, he says, is that these companies benefit not only from CMGI's cash, but also from the other companies in which CMGI has a stake. In other words, these fledglings gain in value from being added into the CMGI stew. And that's why CMGI is worth more than the asset value of the companies in which it has a stake, Wetherell says. "You can't just add up the sum of the companies," he says. "It's OK to do that with one or two companies," he says, but not when it comes to CMGI, which has invested in 38 companies -- and counting. The established companies owned by CMGI can improve business conditions for the newcomers to the group, Wetherell says. "We have these wholly owned business units that can help popularize what they're doing." He cites the example of Ancestry.com, a family-targeted Web site in which CMGI announced an investment in February. The company is getting site-hosting services from NaviSite, advertising sales from ADSmart and a syndicated presence on Planet Direct -- all majority-owned subsidiaries of CMGI. Wetherell says the appeal of being in CMGI's family has enabled him to do deals on better terms than what other venture capitalists might get. The crucial part, he says, is persuading people that the price they get from CMGI is not as important as the price they'll get from other investors down the road, once CMGI has helped them grow. Certainly, the supply of new business opportunity is in no danger of drying up; Wetherell says the company is getting more than 1,000 business plans a month and is making two to four investments a month through its @Ventures venture-capital affiliate. In the past few days, though, the pitch hasn't helped CMGI's stock. From an intraday high of 330 last Tuesday, the start of CMGI's investor conference, the stock has fallen nearly 40% to around 200 as of Tuesday, along with other Internet stocks. But Wetherell last week shrugged off the movement. "It's a sector thing," he said. "You just keep your head down and build the business. ... Stock prices take care of themselves over the long term." Of course it helps that despite the drop, CMGI's stock is up more than 200% since the beginning of the year. At the conference, CMGI's family values got through loud and clear to attendees like Steven Appledorn, senior portfolio manager with CMGI shareholder Munder NetNet fund. Referring to the Japanese word used to describe an interconnected group of companies, Appledorn reported from the conference, "That's certainly been a focus -- the positive synergies of the keiretsu." Investors are impressed with CMGI's previous successes with investments in GeoCities (GCTY:Nasdaq) and Lycos (LCOS:Nasdaq). (Wetherell isn't expanding on his previous objections to Lycos' deal with USA Networks (USAI:Nasdaq).) "In my opinion, they've really improved the odds of repeating. It's much less random than I first would have thought," says David Brady, a senior portfolio manager working on several funds at Stein Roe Mutual Funds, including the Young Investor fund. Asked last week why he hadn't invested in CMGI, Brady said, "It's been a mistake. I wish I had. I guess I'll just wait for an opportunity." He said one of his concerns was that with the stock so far up from its 52-week split-adjusted low of 16 5/8, there was plenty of room for the stock to fall if current shareholders were to take profits.

To: Windseye who wrote (64045)	6/24/1999 7:50:00 AM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

AltaVista Could Be Big Traffic Booster for CMGI's Progeny By George Mannes Staff Reporter 6/23/99 7:49 PM ET CMGI (CMGI:Nasdaq) looks like it's buying a bigger stage on which to work its magic. The Internet incubator's reported plans for a $2 billion to $3 billion purchase of AltaVista search engine and other online properties from Compaq (CPQ:NYSE) haven't been confirmed. But if the the deal materializes, it would likely benefit the stable of three-dozen-and-counting companies in which CMGI holds a stake. By purchasing the AltaVista site, a second-tier portal tacked onto a first-rate Web search engine, CMGI would increase the visibility of the many companies it nurtures. Alta Vista's Web site is one of the most-visited places on the World Wide Web. AltaVista "probably could be a good platform ... a launch platform for the incubators to get noticed," says one buy-side analyst whose firm has been a holder of CMGI stock. "There's lots of possibility here, so it's not shocking to me," he adds. CMGI craves AltaVista's reach, or the percentage of users online who visit the site at least once each month. In May, 14.5% of the population in the U.S. who went online visited www.altavista.com at least once, according to figures from Media Metrix (MMXI:Nasdaq). That translates into 9.5 million visitors, which exceeds the 8.9 million that visited the Snap.com portal, and it beats the 8.5 million who showed up at least once at the fast-growing Go2Net (GNET:Nasdaq) network of sites. AltaVista, however, trails Lycos (LCOS:Nasdaq), in which CMGI holds a minority stake. Lycos had 30 million visitors in May. Reach, however, tells only a part of the story. Though AltaVista has superior search technology, it lacks other features to make users linger on the site -- features that competitors such as Lycos, Yahoo! (YHOO:Nasdaq) and Excite@Home's (ATHM:Nasdaq) Excite site have added to transform themselves from search engines or directories into portals. AltaVista has no free email, no message boards, no chat, no place for users to build their own Web pages and no way to customize the AltaVista experience to build loyalty to the site. That's where CMGI comes in, accompanied by the companies that it either controls or has a stake in through its @Ventures series of venture capital funds. By adding content and e-commerce options from its stable of companies, CMGI can juice up the appeal of AltaVista as well as boost traffic to those companies' sites. For example, CMGI could highlight content from the Raging Bull online investment community or promote the Ding! messaging system the company is grooming to compete with America Online's (AOL:NYSE) ICQ Instant Messaging Service. CMGI can also position its online stores like Furniture.com. AltaVista properties already include Shopping.com, but the shopping site isn't integrated tightly with the search engine. That's not all. AltaVista could use ad-targeting technology from majority-owned Engage Technologies, which CMGI is taking public, and which already provides services to Lycos and other sites. "I think there might be some technology synergies," says one CMGI shareholder, speaking anonymously. (The strategy could work also with Zip2, a Compaq-owned company that helps media companies like The New York Times (NYT:NYSE) and Knight Ridder (KRI:NYSE) build and maintain local Web sites.) It all fits into CMGI Chairman David Wetherell's strategy of stirring together all the companies in CMGI's pot. As Wetherell explained recently, the idea is that more established companies in the stew can drive attention to the smaller companies, while the smaller companies can achieve growth rates that the larger companies can't. As beneficial as the possible deal might be for CMGI, it raises a myriad of questions. A beefed up AltaVista would be a direct competitor of Lycos, in which CMGI has an 18.3% stake -- and from whose board Wetherell resigned earlier this year in a disagreement over Lycos's subsequently-abandoned plans to create USA/Lycos Interactive Networks. Would CMGI sell its stake in Lycos, buy it or stand pat? If Compaq were to receive CMGI stock as part of the deal -- a real possibility, since CMGI is not sitting on a bundle of cash -- it's unclear how that would affect CMGI's relationship with Gateway (GTW:NYSE), which recently agreed to invest $200 million in CMGI as part of an alliance between the companies. Among Compaq investors, CMGI's gain is seen as Compaq's loss. At the PC Expo trade show in New York, where Compaq has a hefty-sized booth, Compaq-watchers lamented the possible loss. "I think it's really going to hurt Compaq in the long term, because they lose their Internet-based presence completely," said Kevin Hickey, a LAN/WAN manager with Chase Manhattan Bank. A Compaq spokesman declined comment, and a CMGI spokeswoman didn't respond to a request for a comment on the possible transaction, which was first reported by Dan Dorfman on the JagNotes.com Web site and in The Wall Street Journal. Hickey said he believed that Compaq's short-lived Internet strategy was an unkept promise. (Compaq acquired Shopping.com in February and Zip2 in April, and has said it would spin off its Internet assets in a public offering.) "It seems like the only thing Compaq gets out of this deal is cash to build and buy more hardware. But that's nothing new and nothing that excites me at all," said Hickey, who doesn't own Compaq stock.