You’d think Timothy Koogle was a Backstreet Boy with all the attention lavished on him by adoring fans at the Milken Institute’s “Global Conference” last week.
When the Yahoo CEO stepped from the stage at the Beverly Hilton which he had just shared with Webvan Group Inc. CEO George Shaheen and Target Corp. Vice Chairman Gerald Storch and others throngs of people thrust business cards at him.
It took Michael Milken, who emerged from the audience, to rescue Koogle from the ruckus.
The interest is curious given that Koogle announced on March 7 that he is stepping down from the chief position at Yahoo, pending the hire of a new CEO.
Koogle, who will remain chairman of the company, has said that he wants to add a fresh perspective to the company.
During the panel discussion, entitled “E-Commerce: What’s Next,” Koogle and Shaheen took some shots from Storch.
After saying he believes in the power of the Internet and that Yahoo is a “fabulous business,” Storch put a new and acerbic spin on an old Net joke: “What do the Internet and teenage sex have in common? Everyone’s tried it, but no one’s any good at it.”
Storch added that “the era of the stupid Internet is over” and that it’s time for Net companies to “hit some numbers now.”
Just like the bricks-and mortar numbers posted by Target. Storch called up a few slides that illustrated his company’s soaring revenues.
Koogle in turn reported some impressive numbers for Yahoo: 185 million people on the network every month, $1.1 billion in sales last year and $1.7 billion in cash on hand. Yahoo recently warned, however, that it would miss its first-quarter revenue projections. The company expects to post about $175 million in sales for the first quarter, 45 percent lower than the $320 million some analysts had projected.
Koogle attributed that to the advertising slowdown and to “the macroeconomic effect.”
“In an ironic way, I like this year,” he said. “It’s causing us to accelerate our push into premium services and real value creation in the marketing services arena.”
Perhaps Storch summed up the discussion on e-commerce best when he said: “Toothpaste will not sell on the Net.”
Bill Comes Due
Perhaps toothpaste won’t make it on the Web, but maybe Mr. Bill will.
Last week, CinemaNow Inc., the video-on-demand company that is majority owned by Lion’s Gate Entertainment Corp., secured the home video and video-on-demand rights to the library of the animated “Mr. Bill” films. The short films debuted on television during the first season of “Saturday Night Live” in 1976.
Since then, the clay “Mr. Bill” character originally created by Walter Williams as a parody of bad animation, has established itself as a brand. It aired on “Saturday Night Live” for seven years and has gone on to appear on numerous commercials, had his own TV series and appeared beside David Letterman, Bob Hope and Dick Clark, among others.
“It’s an ideal addition to our library of recognizable, brandable, on-demand content,” said CinemaNow CEO Curt Marvis.
The acquisition the details of which were not disclosed isn’t monumental for CinemaNow. But it is an indication that CinemaNow is confident in the video-on-demand market, while others are questioning its viability.
A week before the deal, Blockbuster Inc. and Enron Broadband Services announced that they would stop trying to provide video-on-demand together. Enron blamed Blockbuster, saying the rental chain was slow to win support form Hollywood studios. Blockbuster said the studios were too concerned about security to commit.
Indeed, analysts say the technology that will make the studios comfortable with video-on-demand and that would ensure protected copyrights, making the studios money doesn’t exist yet.
Marvis prefers to see the glass as half full.
“But nobody wants to make the mistake of heaping huge sums of money into an emerging marketplace only to find that they outpaced the growth of the business,” he said.
Marina del Rey-based CinemaNow is pushing ahead, positioning itself for a time when the studios move into the video-on-demand market.
Currently, CinemaNow controls a variety of Internet distribution rights for about 1,000 films, most of them from Lion’s Gate.
Vancouver, B.C.-based Lion’s Gate became the majority owner of CinemaNow when it acquired Trimark Pictures for $50 million in cash and stock in a deal announced in June.
Free Access
J2 Global Communications Inc., an L.A. provider of Internet-based messaging and communications services, has a compelling message of its own to deliver to laid-off dot-commers: communicate for free.
The company announced earlier this month that it would offer three months of free communications services to recently laid-off Internet workers.
Called “Job Hunters’ Advantage,” the program allows unemployed Internet workers to receive faxes and voicemail in an e-mail account, send faxes and voicemail, set up and manage conference calls, or use the telephone to listen to e-mail messages.
The offer is about helping “our dot-com brethren,” said Scott Turicchi, J2’s executive vice president of corporate development.
And it’s about opportunity. J2 is hoping that the job seekers who sign up so far about 50 have made inquiries will not want to give the services up.
“What they’ll realize, among other things, is that it’s a cost-effective and efficient way to send and receive faxes and to manage communications,” Turicchi said.
J2 also sees the free deal and subsequent press coverage as a way of publicizing its solvency and strength.
“We’re not facing the same scenarios as many other Internet companies are,” Turicchi said. “We’ll be cash-flow positive in the next quarter.”
J2’s stock has, however, been battered just like its Internet “brethren.” The company staved off a delisting from the Nasdaq for trading at under $1 a share by issuing a 1-for-4 reverse stock split last month.
The stock was trading at around $2.50 a share last week, down from a 52-week-high of $23.75 last March, before the reverse split. In other words, the $2.50 level last week actually compares to a 52-week high of $95 a share.
Staff reporter Hans Ibold can be reached by phone at (323) 549-5225 ext. 230 or at [email protected].
