CMGI's Portals-and-More-Portals Play

In a flurry of acquisitions, investments and initial public offerings, CMGI burst into the public consciousness this year as a venture capital firm with a seemingly unquenchable appetite for Internet companies. But as the feeding frenzy picked up pace, it wasn't clear exactly what the company was: VC firm, Internet incubator or portal catch-all.

Now, three months after CMGI announced its purchase of AltaVista from Compaq (CPQ), a cohesive strategy is emerging that puts portals, along with advertising, at the top of CMGI's vision.

But just as CMGI is not your typical VC firm or incubator, it is also not a typical portal player. While America Online (dossier), Yahoo (YHOO) and the Microsoft (MSFT) Network try to span the Web with a single brand, Bill White, president of marketing and strategy at CMGI, offers a different model: Procter & Gamble, whose consumer products, from Clearasil acne cream to Jif peanut butter, seep into every corner of American daily life.

"We think we're the model for the future, similar to Procter & Gamble, where there are multiple brands under one corporation," says White. He points to the company's slew of sites, from the AltaVista portal to financial portal Raging Bull, that reach into every nook on the Web and draw in page streams - and revenue - from a broad range of consumers. On Thursday, the company tapped into another vein by unveiling MyWay.com, a personalized consumer portal based on the company's Planet Direct portal, geared to ISPs.

All told, CMGI now boasts an arsenal of 16 majority-owned companies, with a minority stake in about 45 firms. About 20 of them can be considered portals.

So far, the company's strategy seems to be paying off: Following a roller coaster of financial quarters during the past two years or more, CMGI recently announced record earnings for its fourth quarter and fiscal year, boosted by the sale of GeoCities to Yahoo. And the company is forging on with the scheduled initial public offering of its benchmark portal, AltaVista. The IPO, company executives say, will probably happen in January.

For the Andover, Mass.-based company, the niche strategy goes back well before the Web. The company began as College Marketing Group, a direct marketer selling lists to book publishers. After David Wetherell bought the company in 1986, he dipped his toe in the Internet market by selling a browser division to America Online in the early '90s. In 1996, CMGI formed its venture capital arm as well as its first Internet operating company, Engage Technologies, which specializes in profile-driven marketing. Acquisitions and IPOs last year ratcheted up the headlines while an even longer string of them this year put CMGI on everyone's radar.

With its new buys, the company is poised to take on America Online, Yahoo and other single-site heavyweights. "We think the market is extremely large and growing," said White. "There is the ability to have multiple players in the portal space occupying various niches and segments based on demographics and Web-usage factors."

But that doesn't mean, says White, that CMGI wants to be an "AOL (dossier) killer." White notes that users tend to think of portals as having areas of expertise, whether in content or search; accordingly, rather than banking on one megasite or brand, CMGI will offer a variety of portals targeted at different users, from consumer portals to vertical ones serving financial and other industries. Already on board are FindLaw, Boatscape.com, CraftShop.com and iCast, an entertainment portal.

But not everyone shares CMGI's take on the Web. While the company's deals make perfect sense to CMGI executives, the acquisition of AltaVista caused confusion among outsiders about the company's portal plans, given its stake in Lycos (LCOS). And some analysts say the company risks unleashing an armada of second-rate sites that lack the branding of more established competitors, or of having one site cannibalize another. Already, AltaVista and Lycos compete over a similar type