More Great Info on CMGI (Part 2) of Daily news Article ....
Then he found the Internet.
In its first Internet venture five years ago, the company created a Web-based subsidiary called Booklink
Technologies. It quickly attracted attention, and America Online bought it for $30 million in stock — which
Wetherell subsequently sold for $73 million.
Flush with cash, Wetherell set up @Ventures, his own venture capital firm to back Internet startups.
Its strategy was simple: it would focus only on the Internet, an even narrower niche than successful tech
venture capitalists like Silicon Valley's Kleiner Perkins Caufield. And it would create an incubator
environment where each company in the CMGI fold would have access to the brains and the experience of
the others.
"David plays a great coach," said Bill White, CMGI's president of marketing and operations. "He knows how
to push the buttons to make it work very well."
Today, CMGI has invested in more than 30 companies, including some that analysts think could be as
successful as Lycos or GeoCities. Combined, those companies capture more than half of the Web's monthly
audience.
With the market for Internet-related initial public offerings ultra-hot, CMGI could spin off as many as a
half-dozen of its investments to the public this year, potentially including Engage Technologies, a collector of
consumer data, and Planet Direct, a private-label portal, which is a way for Internet users to navigate the
Web and access information.
CMGI's Net power has brought the company its own powerful backers — Microsoft, Intel and Sumitomo
— each of which has bought a minority stake. And it has given CMGI the luxury of viewing hundreds of
business plans each month, rejecting most of them.
Its reputation has made it the investor of choice for many startup cyber firms.
"We knew they were our first choice," said Curt Allen, chief executive of the genealogy site Ancestry.com,
who sold 30% of his company to CMGI for $10 million late last year. "Of all the venture capital firms that we
had talked with, we handpicked these guys."
Bill Martin, a 21-year-old college dropout who with two friends co-founded Raging Bull, an Internet message
board company, recalled how he got a phone call last summer from a CMGI exec.
"He said, 'Our chairman was on the Web site and wants to see a business plan.' Three days later, I was at
Dave Wetherell's house for dinner, and we cut the deal," Martin said. "Then, I called the dean and said I
wasn't coming back to school."
The whole discussion, which resulted in CMGI investing between $1 million and $3 million for half the rights
to Raging Bull, took just a few hours — Wetherell was in a rush to catch a plane for a West Coast meeting
with former Intel chief Andy Grove, Martin said.
In fact, the home run investment in GeoCities came about similarly. A friend had passed on a business plan
for something called Beverly Hills Internet with 18,000 members, and Mills threw it on the stack of proposals
on his desk. Then, two months later, entrepreneur David Bohnett, now GeoCities' chairman, called.
"I said, 'I haven't looked at it, and my foot's out the door right now. Why don't you describe it?" Mills
recalled. "And after 20 seconds, I said, 'Geez, this is great.' "
Despite the nonstop predictions that the Internet sky will soon fall, Mills has a different vision.
"It is easy for people to think short term in such a hot market, but our view is that we haven't even gotten off
the blade of the hockey stick yet. There is a lot of running room left," he said.
Original Publication Date: 02/01/1999 |
