Why Is An Internet Access Company Getting Into The Flower Business?

from the reverse-zapata? dept

If you lived through the first dot com bubble, you probably remember the story of Zapata. This was the former fish-oil company that suddenly decided it wanted to become an internet powerhouse. It put out an unsolicited bid for Excite.com and later announced that it was willing to pay millions for totally random web-based startups to build into its own Zap.com portal. It was a laughingstock of the dot com bubble -- highlighting a non-internet company's rather hamfisted attempt to be thought of as an internet company. However, the news that United Online is buying flower company FTD feels like a Zapata-like moment -- even if it's in reverse. United Online, of course, was formed from the merger of NetZero and Juno, two dot com-era "free/cheap" dialup providers. A few years back, it also bought also-ran quasi-social networking site Classmates.com, and more recently failed to spin that off into an IPO. United Online also bought an online "loyalty" points provider, MyPoints, which again, seems rather unrelated to its other businesses.

While you can understand why the company would want to diversify from crappy dialup internet access and a failed social network that no one uses any more, it still seems weird for it to get into the flower business. Yes, it's true that FTD does a ton of business online, but it's difficult to see what sort of "expertise" United Online has to offer FTD. It's even more odd when you consider that things like Barry Diller's attempt to build a conglomerate of disparate internet properties is being broken up, as he was unable to make whatever "synergies" appear. Maybe there's some explanation that makes sense for United Online, but it feels Zapata-like. It may not quite be fish-oil, but an internet company buying a flower company just doesn't seem right.

Filed Under: flowers, internet
Companies: ftd, united online

Market Still Not Totally Crazy: Classmates.com IPO Shuttered

from the a-little-sanity dept

In all the talk about a "new" internet bubble, the one thing that many people have pointed out over and over again is that we're still not seeing the same sort of crazy IPOs that were everywhere in 1998 and 1999. However, that's not to say some weren't interested in trying to push the envelope. More internet firms -- including quite a few that were unprofitable -- have been looking to go public lately. However, perhaps the most outlandish was Classmates.com's IPO plans. Classmates, of course, was a survivor from the original bubble, and had something of a web 1.0 social network, helping classmates reconnect. It tried to make money on premium services that very few people signed up for -- and even fewer as things like Friendster, MySpace and Facebook came along. However, with social networking sites getting astounding valuations, United Online (the current owner of Classmates) decided to try to polish the company up and position it as a social networking IPO. Of course, it didn't take Sherlock Holmes to realize this was a dud from the very beginning -- and it seems that message finally got back to the folks at United Online who have pulled the offering costing the company $4.5 to $5.5 million for a lot of nothing. Still, this should be seen as a positive development. Even with the hype and crazy valuations around social networking, the folks on Wall Street have at least some sense of when a company just has a story rather than anything of substance.

Filed Under: ipos, social networks
Companies: classmates.com, united online