Less Here Than Meets The Eye
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Sources had told The Wall Street Journal that Web retailer eToys had the inside track, but I argued that CMGI could emerge as the top bidder for bluemountainarts.com, one of the most popular sites on the Web.
Turns out that the dark horse, Excite@Home, is the winner. The company announced Monday that it plans to buy the cyber greeting card site for $780 million in cash and stock.
But what exactly did Excite@Home win?
An enticing prospect at first glance. Still, I'm not sure how many typical visitors to the Blue Mountain Arts Web site will easily be converted into paying cable modem customers. After all, the vast majority of visitors go to bluemountainarts.com to send or look at free e-mail greeting cards.
Further, Blue Mountain has carved out a niche reflective of its founders, Stephen Schutz and Susan Polis, a married couple straight out of the Woodstock era who began the company in the early '70s "with the goal of helping people communicate their feelings through poetry and art." (Monetize that!) It is this niche that helps Blue Mountain Arts maintain its lead in the greeting card market over a host of new competitors, including Amazon.com, AOL and, as of Tuesday, Lycos.
It's entirely likely that Blue Mountain Arts' customers will be turned off by heavy-handed efforts to pry money from them, such as including e-commerce pitches with each free e-mail greeting card, as Excite@Home has said it plans to do.
Also, the notion that some Blue Mountain Arts visitors will be enticed into buying Excite@Home's cable access to enjoy the full benefits of "rich media" greeting cards strikes me as a stretch. It's the recipients of the cards that need the extra bandwidth, not the senders, who are the Bluemountainarts.com regulars.
There's no doubt that a Web site which is No. 13 in terms of traffic has great potential value as an acquisition. But the fit has to be right, and I have my doubts that this one is.
The market appears equally unenthused, with ATHM shares rising only 1.9% Monday to close at 39 13/16. That's a small bump for a company that just bought a top-ranked Web site.
Maybe I'll be proven wrong, but for now I'll hold off on sending Excite@Home a "congratulations" greeting card.
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