In the hours immediately following GeoCities’ Jan. 28 announcement that it would be acquired by Yahoo!, L.A.’s tech community vibrated with speculation about what would happen next.
The answer is, not much at least not as of late last week.
Some insiders expected the announcement to galvanize the lumbering studios’ respective online endeavors. Sources close to Walt Disney Co.’s snowballing online empire guessed that the company would quickly announce new strategic acquisitions. But while Disney says it is closely watching the activity, there aren’t any deals even close to the table.
Warner Bros. Online, which recently launched its own personal Web page homestead & #341; la GeoCities, also was expected to quickly unveil new online endeavors. Spokesman Harry Medved said the company does not have any new announcements to make, but feels the concept of its online homestead has been validated by the $3.56 billion GeoCities deal.
Another area of speculation concerned L.A. Internet start-ups, which were expected to start announcing mergers or acquisitions in a race to keep up with the Joneses. Some local chief executives agreed that the GeoCities’ deal was certainly a good omen for them, but no flurry of press releases was unleashed either.
NetZero Inc. provoked an uproar last October when it launched its free Internet access service. The Westlake Village company asks subscribers for highly detailed demographic information in exchange for free access and e-mail.
The Internet access industry’s sky seemed to promptly fall. Some analysts opined that NetZero would bring fee-based Internet service providers like America Online and EarthLink to their knees, while the ISPs themselves predicted NetZero’s swift demise. Then things got very quiet.
It turns out that all these prognostications were off base. But NetZero has thrived. In less than four months, the company has signed up more than 300,000 subscribers without spending a dime on advertising. It also has sold 100 percent of its on-site advertising to Amazon.com, Nissan, and BellSouth. This is particularly impressive given that NetZero charges far above the norm for ads, saying that its proprietary software lets advertisers target specific demographic groups.
“We think we can reach the No. 2 spot in the ISP market and compete with AOL within two years,” said NetZero Chief Executive Ronald Burr. “People understand that our business model puts real money in their pockets.”
According to Burr, NetZero is on track to be profitable by 2001. Of course, an IPO will come before that.
Another seminal executive has left Disney’s Buena Vista Internet Group.
Winnie Wechsler, the group’s senior vice president, resigned from her post last week to head Internet education initiatives at Lightspan, a San Diego-based educational software company.
According to a her statement, Wechsler left Disney after more than 13 years to pursue “new challenges and a very exciting opportunity.”
She joins a lengthy list of Disney’s dearly departed, including two top executives from Buena Vista’s Disney Online unit: former President Richard Wolpert and Vice President David Vogler. Buena Vista Chairman Jake Winebaum has characterized the management churn as the Internet group’s natural evolution. Disney bought major stake in Infoseek last year, and subsequently launched a Disney-branded portal with it.
Sara Fisher can be reached via e-mail at [email protected].
