Zapata: Fish Huckster Dot-Com

Remember when Houston-based fish-meal huckster Zapata Corp. tickled Wall Street’s funny bone with its $1.7 billion buyout bid
for Excite back in 1998? The utter
stench that made the Internet’s most infamous me-too wannabe the laughing
stock of cyberspace has only grown worse with age. Last week, the
fishmonger announced plans to scrap one of its remaining two Web properties
Word.com and put the domain on the auction block.


Cooked up as an oil drilling company by former Commander-in-Chief George
Bush half a century ago, Zapata today is a shell company with a majority
interest in Omega Protein, an American food processor firm. Sitting on a
sagging share price and dim prospects, Zapata smelled riches in the new
economy and set out to board the dot-com gravy train during the late 90’s.
The company kicked off its debut by scooping up a pair of marginally
popular Webzines Word and Charged, and subsequently paraded both
before the public by taking out dog-and-pony-show ads in the New York
Times
and Wall Street Journal with the headline “Zapata Will Buy
Your Web Site.”


To show it meant business, Zapata swapped its brick-and-mortar name for the
catchier moniker “Zap,” while fancying itself an Internet player that
acquired and consolidated content and e-commerce businesses. Not long
after, the upstart announced an unsolicited all-stock bid for Excite. At
the time, the Web’s second most popular search engine boasted a market cap
in the neighborhood of $1.5 billion compared to Zapata’s meager $250
million. Investors openly laughed at the ambitious offer and Excite
promptly and publicly rejected Zapata’s embarrassing advances.


Still vowing to become one of the Top 10 most trafficked sites on the
Internet, the undaunted Zapata rushed into a bevy of whirlwind deals just
weeks later to acquire 31 underwhelming Web properties, before ultimately
reneging on the acquisitions in late 1998. Zapata’s share price took novice
investors on a wild roller-coaster ride driven by misguided speculation of
a sexy new makeover, before depositing them unceremoniously by the wayside.
More than a few armchair newbies learned a rough and tumble lesson, but
most have long since forgotten the circus sideshow.


Since then, Zapata made a persistent run at spinning off its so-called
Zap.com Internet assets. Without a dime in
revenue and no business model in sight, Zap.com was originally slated to raise $100
million before investors sent the dot-com pretender packing. Finally forced
to put its self-underwritten offering onto the OTCBB market, Zap.com
ultimately managed to raise $25 million late last year. For a start-up who
once couldn’t seem to get enough of the spotlight, things have been
strangely quiet, save for the occasional change in business model.


Today, Zapata appropriately trades at $3 a pop, sporting a $75 million
market cap, well off its $25 post-frothy high. Its Internet shell trades a
half dollar less but is curiously worth twice as much as its parent. With
the news of Word.com’s shuttering, Zap.com will now concentrate on its sole
remaining property to supposedly create offline and wireless
flavor-of-the-month animation and multimedia creative. Thankfully, only a
few hundred shares of worthless Zap stock trade hands on a daily basis, and
investors have long since learned to steer clear of this company’s
shenanigans. Back in the early days of his Internet initiative, Zapata CEO
Avram Glazer opined, “We want to be the roach motel of the Internet.”


Mission accomplished.


Any questions or comments, love letters or hate mail? As always, feel
free to forward them to [email protected].

Want my daily missives delivered with your morning toast and coffee? Sign
up for my DealTracker newsletter.

News Around the Web