FOOL PLATE SPECIAL: An Investment Opinion
The need for the NBC network to develop an Internet strategy -- a portal to bear the colors of the peacock -- is not in question. What's unknown is the company's tolerance, and that of super-parent GE, for continued investments and possible false starts on NBCi's part.
If it's not easy being a second-tier website these days, it's apparently even more difficult being a top-tier executive at one. More evidence of this was provided last week when NBC Internet (Nasdaq: NBCI) announced that its president and COO, Edmond Sanctis, was resigning "to pursue other interests." His position will not be replaced. "We wish him well in his future endeavors," said CEO Will Lansing.
Also off to pursue other interests and endeavors are NBCi's Executive Vice President of Sales, John McMenamin, Senior VP of Sales, Greg Regis, and VP of Marketing, Stacy O'Connell, according to published reports. The resignations come at a time of uncertain direction and frequent changes in strategy for the company.
In a separate move, portal CMGI's (Nasdaq: CMGI) AltaVista search portal announced on Friday the abrupt resignation of its chief executive officer also amid strategic upheaval at the company.
Sanctis became president and COO when NBCi was created last year through the merger of publicly traded Xoom.com, CNET's (Nasdaq: CNET) Snap.com unit, and sundry NBC Web properties. Prior to that, Sanctis was an NBC executive who first became involved with Snap in 1998 when NBC parent General Electric (NYSE: GE) invested in CNET and Snap.
After being converted in the merger from shares of Xoom.com last November, shares of NBCi have gone downhill since hitting a high of about $106 earlier this year. They currently trade at around $5 each. But while stock prices can, perhaps, be attributed to the vagaries of a fickle market, the number of unique visitors to NBCi's sites has also declined along with the number of pages viewed. That is a market reaction of a different sort.
With things looking down by almost any measure, clearly something isn't working at NBCi. The company abandoned a multi-brand approach by dissolving Xoom and Snap into the single NBCi brand and relaunching an integrated site about one month ago. It also laid off about 20% of its employees in a cost-cutting move.
Last week, NBCi announced it was merging its AllBusiness.com website with Bigvine, an online barter marketplace for small businesses. NBCi said the combination of AllBusiness' content and user base of over one million small businesses with Bigvine's listing of $80 million in barter services and goods will form the foundation of an exchange platform for small businesses.
Terms of the deal were not disclosed. NBCi will own 49% of the combined company, with the rest owned by Bigvine shareholders, including Kleiner Perkins Caufield & Byers, American Express (NYSE: AXP), and Kohlberg Kravis Roberts. NBC and CNBC will provide on-air advertising for the new AllBusiness.com. Giving up operational control of its business portal will let NBCi focus more intently on matters closer to home. But it's too soon to say how these efforts will play out.
The need for the NBC network to develop an Internet strategy -- a portal to bear the colors of the peacock -- is not in question. What's unknown is the company's tolerance, and that of super-parent GE, for continued investments and possible false starts on NBCi's part. Of course, none of NBC's "old media" competitors -- not ABC, nor CBS, not even Fox -- has quite gotten it right either. That might be the brightest spot in this situation.
Is the peacock network on the right track in developing a peacock portal? Share your thoughts on the NBCi discussion board.