| BUSINESSWEEK ONLINE : OCTOBER 25, 1999 ISSUE | ||||||||
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| COVER STORY
One Big Happy Family--But for How Long? CMGI became a hit with investors as a kind of Internet mutual fund: a way for investors to buy into a broad array of Internet companies through just one stock. But don't tell David S. Wetherell he runs a mutual-fund company. All along, his grand plan has been to harness the collective resources of the CMGI companies by having them share customers, technology, and strategic partnerships to form an Internet keiretsu. ''It's the optimal business model for the Internet, where speed to getting big is critical,'' he says. Sounds swell, but does it work? The answer seems to be yes, at least in the case of one of his biggest hits so far. Raging Bull, the fast-growing online investor chat room, was still being run in a basement by three college students when Wetherell saw it in August '98 while surfing the Web. Impressed with the content and a feature that allowed chat participants to ban people whose comments they didn't like, Wetherell quickly bought 50% for $2 million. TEAM PLAYERS. Within a week, Raging Bull had moved to CMGI's Andover (Mass.) offices, and switched its core technology operations over to CMGI's Web-site management company, NaviSite. The four-month-old site, which had been running as a free service financed by the founders' credit cards, immediately began generating ad revenues by hooking up with ADSmart, a CMGI company that links online advertisers with sites. Those partnerships proved key, as Raging Bull's audience exploded from 200,000 page views a day in January to more than 5 million by September. With a nudge from Wetherell, both bent over backward to accommodate the fast-growing upstart. NaviSite found the capacity to handle the extra hits, while ADSmart redoubled efforts to sell ads for Raging Bull's rapidly expanding page views. And to top things off, Wetherell made suggestions about changes to the look and feel of the site to make it easier to use. ''CMGI had ways to bring Raging Bull into business right out of the gate,'' says Stephen J. Killeen, who left Fidelity Investments' online trading unit to become Raging Bull's CEO in January. Now, Raging Bull has morphed into the second most popular online investor forum, behind only Yahoo! Inc., and it is forging other links within the CMGI network. A conversation between Wetherell and AltaVista CEO Rod Schrock led to Raging Bull's rapid integration into the CMGI-owned portal, with potential benefits for both partners: more traffic for Raging Bull and an opportunity for AltaVista to increase the length of time portal visitors linger. That's key: The longer Web surfers stick in one place on the Web, the more advertisers will pay a site to run their ads. Still, some see a harmful side to Wetherell's keiretsu approach, since his companies can be pressured to work with partners inside the CMGI network even if that's not their first choice. ''There's inherent conflict built into the structure of CMGI,'' says Jerry Colonna, a former partner with Wetherell's first Internet venture fund. However, other CMGI executives say they have freedom to chart their own course. But ''if it makes sense, there is a preference to do business with sister companies, because we all want to see CMGI do well,'' says Charles W. Berger, CEO of recently acquired AdForce Inc. He'll get no argument from 22-year old Bill Martin, one of the two Raging Bull founders who remain. From where he sits, being in David Wetherell's family of Internet companies looks like a pretty cozy place. By Paul C. Judge in Andover, Mass. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS David Wetherell: Internet Evangelist COVER IMAGE: David Wetherell: Internet Evangelist CHART: CMGI's Rocketing Shares TABLE: David Wetherell's Internet Empire RESUME: David S. Wetherell PHOTO: David Wetherell, Age 5 One Big Happy Family--But for How Long? Lycos: The Chick That Didn't Fly the Coop ONLINE ORIGINAL: Should You Invest In the Companies CMGI Invests In? INTERACT E-Mail to Business Week Online | |||
