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 [email protected] (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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