MergerMania.com

April 6, 2009 at 2:03 pm 1 comment

Alex told me about this entertaining talk he went to in central London.  He had one Hell of a time with the trains (he couldn’t get a mortgage for his peak hour Anytime Return to Euston), got lost on the Northern Line and was held up in traffic outside Morrisons in Bredbury before – stood behind El Tel Turkey Toreador’s 4×4 near the Travellers’ Call!

Apart from that he had a great time (once he found the venue).  He also stumbled upon this handout from the conference.  It was a nostalgia trip into the merger mania before and after the dot.com bubble.  The author of this article has agreed to let me publish it on my blog, so long as he is identified as the author of the piece.  Without further ado, here it is.

 

MergerMania.com: How the cottage industry came of age: Stuart Vallantine, 06 April 2009

Sometime in 1997, the World Wide Web was still to make an impact in most people’s homes throughout the UK. We were excited at the prospect of 56k baud modems speeding up our web browsing, and online shopping seemed to be some sort of novelty. Back then, the dot-com companies of the day were small scale, at least till the big boys started sniffing around.

Among the first to do so was Microsoft. Competing with Netscape to deliver a new web browser, they also saw the need to add a free webmail service to the mix. In December 1997, they purchase Hotmail, for $400,000,000. The timing was right, as a year later Microsoft launched Windows ’98, which was bundled with Internet Explorer. This resulted in Netscape losing browser market share, and Netscape Communications being sold to AOL.

The Dot-com Boom also saw a myriad other acquisitions. For example, GeoCities, a free web space provider, was bought by Yahoo! in January 1999. With stock market prices at a high, it seemed to be the best time to form new dot-com businesses and abandon outdated business practices. By 2000, the dot-com boom turned to bust.

For some, it could have been a reality check, or rather the fact that the old ways of doing business were still pertinent. In the throes of the Dot-com bust, the bubble’s last hurrah was the merger with Time Warner and AOL. Formerly known as America Online (and Quantum Computer Services before then), the company was merged with an old media player, later dropping the AOL name from AOL Time Warner in 2003. Since then, its customer base has fallen to just 10.1 million, with its UK arm sold to the Carphone Warehouse in October 2006.

Starting to make its presence known around 2001 – 2002 was an up and coming search engine from Stanford. As an antithesis to the cluttered interfaces of search engines at the time, and the patchy nature of search engine results, Google.com was a breath of fresh air. It gained popularity among its users due to its simple interface – a blessing given that around 2001 – 2002, most personal internet access came from dial-up connections.

Buoyed by the success of its users, Google added other features from blogging to video sharing space, secondary to the searching experience. Its first main acquisition was Pyra Labs in 2003, which led to Google taking over Blogger. 2006 saw SketchUp and Writely bought by Google, in a bid to develop online software applications, without the need for a license key or telephone registration.

Later that same year came Google’s acquisition of YouTube, a popular video sharing site. For $1,650,000,000, it cemented Google’s position as a major provider of search services and as a leading player in the phenomenon which we know as Web 2.0.

In the last 15 years, the internet has become part of everyday life for most people. Shopping online no longer seems a novelty, more a normality, so much so it has impacted on traditional ‘bricks and mortar’ retailers. The last 5 years however have seen old media non-dot-com type businesses muscle in. For example, CBS now owns Last.fm and CNET Networks. Rupert Murdoch’s News Corporation owns MySpace and Easynet.com (the latter through its British Sky Broadcasting subsidiary).

In the next five years, we could see the boundaries between the old media companies and dot-com companies blurring. The switching off of analogue terrestrial signals could increase media convergence between TV and the internet, possible with developments in HDTV. Who knows if the spare analogue signal capacity could be given over to high speed broadband services?

 

That fellow sure talks a lot of sense.  Thank you very much for the article, Alex, it is well appreciated.

T.U., 06 April 2009.

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Entry filed under: Computing, History, Internet.

“This time, the star of the show, could be you…”

1 Comment Add your own

  • 1. A.D.N  |  April 7, 2009 at 7:37 am

    “In the next five years, we could see the boundaries between the old media companies and dot-com companies blurring.”

    I’d be much less surprised to see the latter entirely superceding the former. Take the dissemination of news for an example. Google news gives me unlimited and unfettered access to up-to-the-minute news from thousands of sources. For free. Compare that to the anachronism of walking to a newsagent, handing over 90 pence of my hard earned cash and having to sift through a heavily edited single-source take on yesterday’s news.

    Expect to see stiffer resistance from traditional media as .com companies encroach on “their turf”, before things like newspapers abandon print and wholly embrace digital formats. The Grauniad’s April Fool about moving from a tree-based to a Twitter-based user interface may not be too far from the truth.

    Reply

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