AOL mega deals exposed - IS 30 Oct 2000

From: Ramon Ray <ramon_at_smallbiztechnology.com>
Date: Wed 01 Nov 2000 18:52:14 -0500

The Standard http://www.thestandard.com exposed AOL's
mega million/billion dollar deals in a great 30 Oct
2000 issue cover story.

So many of the dot-com's (and others - but THEY often
have money) make multi million/billion dollar deals
with AOL, and as the piece correctly points out, end
up a) not getting a decent (that's being nice) return
on their investment or b) not even having money to pay
AOL the money for the deal, as in Dr. Koop's case.

In my opinion, Mega portal deals, are all fine and
dandy, provided you've got mega-billions in REAL
revenue. However, if you've only got like $88 million
in an IPO does it make sense to sign a deal for $86
million or so - like Dr. Koop did with AOL.

So many dot com's think that just because they've got a
few million dollars in paper money - that means they
should go blow it on a one time online branding (or
offline branding like computer.com did for the NFL
Super Bowl) and never be heard of again.

Would it not make more sense to take say $1 million,
hire some savvy online 'net marketing guru (or 2 or 3)
from this list or somewhere else and get some REAL
results.

VC's (and start ups) want so badly to make money - but
they sometimes are so dumb, or might I say fiscally
and business-ly ir-responsible with their money and
biz development.

I recently read a book, Entrepreneur America (I
reviewed it at
http://www.smallbiztechnology.com/ctrmj/entrepreneurame
rica.htm ) by Rob Ryan and he lays out, how
entrepreneurs can build successful businesses - if
every entrepreneur and VC read this book BEFORE laying
out money or even building a business there would be a
lot more successful businesses in this country!

Ramon Ray, ramon_at_smallbiztechnology.com,
Small biz technology editor/analyst
http://www.smallbiztechnology.com
Author, "Small Business Technology Survival Guide" @
http://www.smallbiztechnology.com/smallbiztechguide.htm





Received on Wed Nov 01 2000 - 17:52:14 CST