NBCi Buys Hype, Not Substance with Flyswat

NBC Internet (NBCI) continues to aggressively pursue its fragmented Internet initiative with its latest dot-com acquisition. On Monday, the company announced its intent to acquire privately-held flyswat, makers of a free browser add-on that arguably boosts the proficiency of Web searching. Sources close to the deal said the acquisition was valued upwards of $70 million with milestones that could push the asking price as high as $100 million.

In theory, with flyswat downloaded onto your PC, you can dig deeper into any Web site without leaving to go access a separate search engine. Its technology scans Web pages, underlining select words that when clicked, open up a new window with additional information. In the blink of an eye, stock quotes, company profiles, maps, weather, or definitions are at your fingertips.

With this acquisition, the media giant insures itself prominent placement on flyswat’s short list of content providers. Now, in addition to information garnered from current partners Red Herring, Raging Bull, and MySimon.com, flyswat users will now obtain info from NBCi’s family of properties.

On the surface, flyswat sounds great. And, surely, NBCi was bowled over by the hype of this next “killer app.” But, a funny thing happens with fickle Web surfers. It’s called barrier to entry, and having to download flyswat creates an almost insurmountable barrier to entry. Many have tried, but few have succeeded in overcoming this seemingly simple obstacle. And flycast just doesn’t make the cut.

Let me break it down for you. I can count on one hand how many stand-alone downloads I have on my PC: RealPlayer, Eudora, FreeAgent, and ICQ. They each serve an instrumental function in everyday online activity. Like a great many online users, I’m tech savvy and don’t want any frills. You’ll hear people say things like, “Flyswat is cool,” or “That’s some killer app.” But remember, at one time, the same praise was heaped on PointCast’s now infamous downloadable “push” technology. This story is a case of déjà vu.

On the heels of rave reviews from the likes of CNET (CNET) and ZDNet (ZDZ), Rupert Murdoch’s News Corp. (NWS) offered to acquire PointCast back in 1996 in a stock deal valued at nearly $400 million. Silicon Valley’s next Cisco kid arrogantly turned down the offer; and just two short years later, the company couldn’t buy a stick of gum on layaway. In swooped Bill Gross’ idealab! to pick through the bones, purchasing PointCast last May for a paltry $7 million in cash and stock. At least flyswat was savvy enough to avoid history repeating itself. Kudos to the upstart for a speedy exit strategy.

As for NBCi, whoever is driving the train needs to lose the beer goggles. The company leapt into the online fray last November, on a hope and a prayer, and a mish-mash of Web properties. Snap.com’s marginally popular Web portal anchors the broadcaster’s e-initiative, with the reigning spam king Xoom.com as its second-in-command. NBCi seems to be floating adrift with little sense of direction except to capitalize on the dot-com craze.

Two months ago, NBCi plunked down $225 million to purchase AllBusiness.com, an e-content portal devoted to

entrepreneurs and small businesses, in order to hop onto the hot B2B bandwagon. But it hasn’t boosted shareholder’s eroding confidence any. Shares of NBCi have run out of gas by the side of the road, most recently treading water within a stone’s throw of its 52-week low, and 64 percent off its 52-week high.

Maybe the suits over at NBC ought to stick to what they know best, making terrific game shows.

Oh yeah, that’s ABC.

DealTracker scorecard: NBC Internet/flyswat

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