Merger Rule #1: Think Internet
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The big buzz centers on whether or not GE will buy a stake in Lycos (NASDAQ:LCOS). Maybe Lycos should buy a stake in GE.
The great hypothesis written on the wall these past four years has been that media firms would someday acquire Internet companies. However, Internet companies should beware. For just as the clay tablets promoting the notion start to dry the one commandment we think vital: prepare for the next 100 years, not the last 100. Or at least the next 10.
Plenty of sci-fi thinkers promote the notion that TV and PC, phones and other gadgets are converging. We don't think they're converging we think they are starting to speak a common language: Internet.
We also believe that media is a continuum, that platform differences will always exist and complement each other. However, at this early juncture of the Internet the business model evolves constantly.
That's one reason why AOL-Netscape, @Home-Excite were applauded by Wall Street. High-bandwidth (figuratively speaking) mergers. The execs and team speak the same language: IP.
One example of old media buying Internet exists in Disney, which bought a 43% stake in Infoseek cheap in our view, one example of how media and Internet did a Mickey Mouse deal. The deal may work but it's too soon to tell.
Maybe an analogy helps: we're reminded of Columbus landing on North American shores and calling the natives "Indians" since he thought he was in India. How many media companies know nothing about the Internet "geography" yet would hastily apply their models and ways of thinking and miss what the Internet is.
You can't drive backwards into the future looking through a rear-view mirror.
Catch Steve Harmon at Canada Internet World, Feb 5, talking about Internet stocks in the great white north with the top analysts and finance folks. See events.internet.com now!
Accolades for Internet Stock Report:
"Fresh and provocative" -CBS Marketwatch, who named Steve Harmon one of the top Internet stock analysts and only independent one honored
"I am a huge fan of Steve Harmon's crack analysis" -Kleiner Perkins' John Doerr