Web 1.0 started long before the Nasdaq crash of 2000. In 1995 companies like Yahoo! (YHOO) started to show up. So did Lycos, Geocities, Altavista, and Swtichboard. Most of those companies are gone now, but they were the Googles (GOOG) and MySpaces of their day.
All that is left of that period, at least which still have any size and scale, are Yahoo!, Ebay (EBAY), and Amazon (AMZN). Amazon is such a diverse business now that it can hardly be considered Web 1.0. It sells set-top boxes, music downloads, and, perhaps most important, has a large business to license its infrastructure to Web 2.0 companies.
The earnings news out of Yahoo! made it plain that it can do nothing to save itself from the fate of being a company with only the most modest revenue growth and embarrassing margins.(Entire earnings transcript here from BloggingStocks) Some might see that as humiliating, but it is not much different from being in the steel business in the 1960s or the US car business in the 1990s. The market changes. One or two strategic decisions go the wrong way. Voila! The company is in the toilet.
The Yahoo! news is bad for scores of other companies from Looksmart (LOOK) to Answers.com (ANSW) to The New York Times (NYT) About.com to MSN and AOL. A large part of what makes the internet work, at least financially, has nothing to do with these companies.
Web 1.0 needs to schedule its wake now. Someone make sure to put coins on the body’s eyes.
Douglas A. McIntyre
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