RealTime IT News

So Much for the Starving Poet

Five years ago I would have labeled dubious the notion that a Web site enabling people to send free electronic greetings cards over the Internet could, by 1999, fetch $1 billion.

But that's the amount being floated in a Wall Street Journal story about Blue Mountain Arts, a company begun by two flower children in 1971 to distribute hand-printed poetry/art posters, and which eventually launched one of the most popular destinations on the Internet, attracting more than 9 million unique visitors per month.

Ranked as the No. 13 most-popular Web property in August by Media Metrix (MMXI), Bluemountainarts.com draws more traffic than eBay (EBAY), About.com (BOUT), CNET (CNET), GoTo.com (GOTO) and the Snap sites. That makes it prime real estate in cyberspace.

So much so that, according to the Journal, Internet heavyweights such as CMGI (CMGI), eToys (ETYS) and Excite@Home (ATHM) have been in "advanced" talks to purchase the Web site, most likely through an all-stock deal.

The Journal said "people close to the situation" give eToys the inside track, and the marriage of eToys and Bluemountainarts.com certainly makes sense. The online toymaker faces increased competition from a number of companies, including Wal-Mart, Amazon.com (AMZN), KBToys.com, FAO Schwartz and (if it gets its act together) Toysrus.com.

To continue its impressive growth, eToys has made several moves in recent months to diversify revenue and build traffic -- adding children's books to its line of products, introducing content to keep visitors on the site longer and to steer them toward purchases, and expanding into Europe by launching a British Web site for this holiday season.

By owning Bluemountainarts.com, eToys could tap into a wider demographic group than its current base of parents and other adults looking to buy gifts for kids.

Don't rule out CMGI, however. The Internet holding company certainly appreciates the value of a popular Web site -- it already controls two of the most-visited Web properties, Lycos and AltaVista. CMGI is an aggressive acquisitor, always looking for ways to synergize and monetize its many Internet properties.

Snapping up Bluemountainarts.com would give CMGI three of the 13 most popular Web properties. It may be an opportunity too good to pass up.

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