If you’re having trouble figuring out who owns what in the Internet world, just wait 15 minutes. It’s likely to change.
Last week alone, Microsoft Corp. said it would pump $57 million into Culver City-based Intertainer, an interactive television service. Online movie company Ifilm.com said it received $35 million from some high-profile investors, including Sony Pictures and billionaire Paul Allen, and intended to move its headquarters to Los Angeles from San Francisco.
And Barry Diller’s USA Networks Inc. agreed to buy local online retailer Styleclick.com Inc. for about $380 million and fold its Internet Shopping Network into Styleclick.
Got all that?
“It may look like it, but it’s not out of control,” said Jeffrey Cohn, president of eStrategy Partners, an e-commerce consulting firm in Manhattan Beach. “USA’s deal with Styleclick is another example of an Old World business converging with the New World of the Internet. Part of the justification for these deals is that not all these (new) companies can go public. Ultimately, you’re just buying traffic.”
Given the speed at which deals are made and dot-com companies change hands, consumers could be forgiven for not keeping up. But it’s simply a reflection of the times and the desire for established companies to keep investing in the digital revolution.
“It does create a lot of fluidity,” said Charles Conn, chief executive of Ticketmaster Online-CitySearch Inc., itself the result of merging two separate Internet companies. “But it helps create scale and ability. I started at CitySearch, and we merged with Ticketmaster because of just what we’re talking about, the need for a recognizable brand. There’s no way we would have been able to acquire that without the merger.”
Meanwhile, it makes sense for a company like Ifilm to move to L.A., because it is more likely to find people with movie-industry experience here to bolster its management team.
“Money is coming from so many different places,” said David Sanderson, head of e-commerce for consultant firm Bain & Co. “But with the pace of change, what’s being stressed is management. The question in the L.A. business community is, what companies have we created that are going to be sustainable online? There already is a density of activity.”
It helps if you can rely on deep pockets, as Styleclick obviously can. “USA wants us to be on our own so we can continue to be fast-moving enough to respond to what’s going on,” said Styleclick Chief Executive Maurizio Vecchione. “And they want to use us as a currency for future deals going forward.”
