RealTime IT News

CDNow: The Honeymooners

Cross your fingers. The first company on my M&A Bingo scorecard looks close to tying the knot. CDNow announced last week that it had narrowed a list of more than two dozen interested suitors. I'd be surprised if the original pool numbered even half a baker's dozen; but nevertheless, the fat lady is about to sing for the struggling music e-tailer.

In anticipation of a pending marriage, shares of CDNow nearly doubled off its 52-week low, on roughly 20-times its average daily volume. Individual investors are banking on favorable buyout terms to be unveiled early this week, possibly before this column goes to press. I'd expect Grupo Carso to broker a deal that has CDNow going for roughly $8-$10 a share.

AltaVista Calls it Splitsville

AltaVista has unveiled its latest strategy to continue as a going concern. Split the portal dinosaur in two and see if Brits have an interest in used goods. AltaVista execs say that plans are in the works to spin-off its non-American operations in Europe before year's end.

This shouldn't come as a bombshell to retail investors in the U.S., who already rejected this company's IPO more times in the last two years than I can remember. And that was including the non-American assets.

AltaVista has slashed its workforce wholesale in a desperate effort to trim costs before the money tree withers. Too late. At this company's astonishing cash burn rate, trouble isn't far off. Alta is so very desperate to raise badly needed cash, that it's willing to take the show abroad to retail investors who aren't as privy to its highly publicized IPO soap opera.

The cream has since risen to the top in the portal space, with Yahoo! and Google already declaring victory, while second and third tier players scramble to find a new line of work.

Excite@Home and GO.com have seen the writing on the wall, both busying themselves with decidedly non-portal endeavors. Showing that it boasts more follow than leader, AltaVista managed to create only mild enthusiasm from Web users with the debut of its Google search engine knockoff Raging Search.

How many times should an also-ran pronounce "We've postponed our IPO due to poor market conditions," before it takes a long hard look in the mirror and realize it ain't the market conditions. Never has been, never will be.

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