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Zapata: Fish Huckster Dot-Com

Remember when Houston-based fish-meal huckster Zapata Corp. tickled Wall Street's funny bone with its $1.7 billion buyout bid for Excite back in 1998? The utter stench that made the Internet's most infamous me-too wannabe the laughing stock of cyberspace has only grown worse with age. Last week, the fishmonger announced plans to scrap one of its remaining two Web properties Word.com and put the domain on the auction block.

Cooked up as an oil drilling company by former Commander-in-Chief George Bush half a century ago, Zapata today is a shell company with a majority interest in Omega Protein, an American food processor firm. Sitting on a sagging share price and dim prospects, Zapata smelled riches in the new economy and set out to board the dot-com gravy train during the late 90's. The company kicked off its debut by scooping up a pair of marginally popular Webzines Word and Charged, and subsequently paraded both before the public by taking out dog-and-pony-show ads in the New York Times and Wall Street Journal with the headline "Zapata Will Buy Your Web Site."

To show it meant business, Zapata swapped its brick-and-mortar name for the catchier moniker "Zap," while fancying itself an Internet player that acquired and consolidated content and e-commerce businesses. Not long after, the upstart announced an unsolicited all-stock bid for Excite. At the time, the Web's second most popular search engine boasted a market cap in the neighborhood of $1.5 billion compared to Zapata's meager $250 million. Investors openly laughed at the ambitious offer and Excite promptly and publicly rejected Zapata's embarrassing advances.

Still vowing to become one of the Top 10 most trafficked sites on the Internet, the undaunted Zapata rushed into a bevy of whirlwind deals just weeks later to acquire 31 underwhelming Web properties, before ultimately reneging on the acquisitions in late 1998. Zapata's share price took novice investors on a wild roller-coaster ride driven by misguided speculation of a sexy new makeover, before depositing them unceremoniously by the wayside. More than a few armchair newbies learned a rough and tumble lesson, but most have long since forgotten the circus sideshow.

Since then, Zapata made a persistent run at spinning off its so-called Zap.com Internet assets. Without a dime in revenue and no business model in sight, Zap.com was originally slated to raise $100 million before investors sent the dot-com pretender packing. Finally forced to put its self-underwritten offering onto the OTCBB market, Zap.com ultimately managed to raise $25 million late last year. For a start-up who once couldn't seem to get enough of the spotlight, things have been strangely quiet, save for the occasional change in business model.

Today, Zapata appropriately trades at $3 a pop, sporting a $75 million market cap, well off its $25 post-frothy high. Its Internet shell trades a half dollar less but is curiously worth twice as much as its parent. With the news of Word.com's shuttering, Zap.com will now concentrate on its sole remaining property to supposedly create offline and wireless flavor-of-the-month animation and multimedia creative. Thankfully, only a few hundred shares of worthless Zap stock trade hands on a daily basis, and investors have long since learned to steer clear of this company's shenanigans. Back in the early days of his Internet initiative, Zapata CEO Avram Glazer opined, "We want to be the roach motel of the Internet."

Mission accomplished.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.