Capital Ideas

What's a VC to do with e-tailers in a market like this? Partners of CMGI@Ventures, backers of many consumer-oriented Web ventures, huddled in New York in April to hash it out. Here's what they decided:

1 Make companies go back to relying on word-of-mouth ''viral marketing.'' It's cheaper than TV. Some e-tailers are trying to get out of costly sponsorship deals with portals, too.

2 Find ways to branch into B2B markets without abandoning consumers. CMGI-backed CarParts.com now targets repair shops as well as do-it-yourselfers.

3 Raise more money from private investors and less in the public market. Furniture.com, a CMGI company, is considering a private round in lieu of an IPO.

4 Don't rely on public relations firms, which can command up to 2% of a startup's equity. ''Hype doesn't build great companies,'' says CMGI partner Brad Garlinghouse. ''Great companies build hype.'' Execution is especially critical now.

5 Don't be afraid of the best consumer-oriented deals. CMGI just funded Dialpad, a consumer Internet-phone venture, in part because of its low marketing costs.

Money in the Bank

The U.S. Mint is making a mint on the Web. It seems Uncle Sam figured out what most Netrepreneurs haven't--how to sell something for more than it costs to buy or make.

It helps to have collectors, who are clamoring for the mint's new quarters that commemorate different states on the ''tails'' side--enough to pay $35.50 for a 100-quarter bag and $300 for 1,000-coin bags. Since it costs only a nickel to make a quarter, the math works. The mint expects $150 million in online sales this year.

To drive traffic to www.usmint.gov, the mint has blitzed collector publications and general media with ads. It's working: On Apr. 3, when Maryland quarters went on sale online, 12.8 million coins sold out in two hours. When South Carolina's go on sale in June, Mint officials promise all orders received in the first 72 hours will be fulfilled. Therein lies their edge: It only seemed as if other e-businesses could mint infinite cash, but this one can.

By Amy Borrus

Mother & Child Reunion

Forget B2B. The urge to show off one's little darlings is sparking B2E--babies-to-everyone. A survey of 1,035 women with kids under age three found that 25% have set up virtual photo albums on the Web and nearly 60% have sent pictures of their babies via e-mail. Here are the B2E findings:

25%
Web sites devoted to a child

18%
Use a digital camera to post photos of the kids

12%
Have film developed and posted online

59%
Send pictures of their child via e-mail

60%
Plan to buy a digital camera this year to put pictures on the Web 20%

20%
Have film developed and put onto a floppy disk

Euphoria Online

Mike Freccia smells a successful e-business--and it smells a lot like marijuana. At least, it does if you're the co-founder of iToke.co.uk, the self-described ''pan-European pot portal'' that launches in Amsterdam this June, with plans for other European cities later in the year. Freccia and his partner, Mike Tucker, plan to whisk pot grown at their greenhouse to customers via vans. ''We want to be the FedEx of pot delivery,'' Freccia says.

Freccia, 35, and Tucker, 33, think government officials--who inconveniently keep insisting selling pot outside Holland is, y'know, illegal--will change their minds once they understand iToke is safer for consumers than buying ganja on the street--and taxable. The two expatriate Americans say their $5 million in venture-capital stash, er, cash, came from Europeans who made their money in high-tech. But of course.

By Anna Bawden

Imminent Domains

The Internet is confusing enough. But those darn domain names. Most don't offer a clue about the business behind the name. Can you tell what kozmo.com or keen.com do? To let more companies get Web addresses that more closely reflect the nature of their businesses, Internet officials are considering domains such as .store or .news. But can bureaucrats come up with names that really capture the Web? We doubt it. So we're lending a hand:

For parenting sites
.mom

For women named Dorothy
.dot

For sites that will never make money
.bomb

For sites aimed at veterans
.nam

For meditation sites
.om

For really boring sites
.zzz

For the ickiest sites
.ugh

For food-related sites
.mmm

For scam artists
.con

For those who chase them
.cop

For sites selling stuff that ''fell off the back of a truck'' .pssst

Dot-Comedy

Forget last month's Nasdaq crater: The coolest evidence of dot-com backlash is a series of stickers popping up in San Francisco's geek-infested South of Market neighborhood. Modesty prevents us from printing most of them, but tamer examples include: TheInternetIsGreatForSendingObscene-MovieClipsToYourFriends.com and ButIDon'tNeedMyToothpasteDelivered.com.

The underground movement is chronicled on a Web site called BlowTheDotOutYourA--.com--launched by an anonymous tech worker fed up with e-hype, who uses the alias Sam Lowry.

The site offers ''a starter fun kit'' of files for printing stickers to plaster neighborhoods near you. Some folks just don't get it: Lowry says that people have asked if they can place banner ads. E-hype, even there.

By Spencer E. Ante