Old media shop for new media
While analysts talk of the coming convergence with PCs and TV, media titans such as Disney and NBC are snapping up established Net brands.
"Long before this PC-TV convergence, we're actually seeing an old-new media convergence," said Gregory Wester, director of Internet marketing strategies for the Yankee Group.
The two phenomena work hand in hand, he added. The deals being made today between the Disneys and Infoseeks of the world "are going to pay off when we see PC-TV convergence.
Simple: by buying companies that already are doing it through portals.
Ever since the Web began taking off as a commercial endeavor about two years ago, people from various segments have been predicting that one day the new media success stories--such as Yahoo, Excite, and to some extent America Online--would be overtaken by established stalwarts such as Disney and Time Warner or telco titans like AT&T.
But here's the rub: they don't have to get it. "In the build vs. buy debate, buy is the clear winner," said Adam Schoenfeld, a senior analyst with Jupiter Communications. "Real entrepreneurs built these brands, but deep pockets make up for a lot of mistakes."
In other words, Disney, despite its multipronged effort on the Web, has not become even half the sensation on the Net that Yahoo or AOL has, but by snagging a portal site like Infoseek, it just might be able to make its mark.
The same goes for NBC, which recently bought a stake in portal Snap. (Snap is a division of CNET: The Computer Network, publisher of NEWS.COM).
Now it's a question of who's next. Since two of the smaller portal players, Infoseek and Snap, have been claimed, it makes sense that Lycos could be next, said both Wester and Schoenfeld. Lycos's stock is less expensive than that of its bigger cousins, Yahoo and Excite.
Still, Yahoo and Excite could be next to cut deals. AOL, the world's largest online service and a formidable competitor in the portal war, already rejected a takeover bid from AT&T.
In a few years, Schoenfeld noted, "these deals could look relatively cheap."