• by Michael Kubin , November 29, 2000

By Michael Kubin, Co-CEO, Leading Web Advertisers

Upon returning from battle, Roman armies and their Caesars were paraded through Rome while the entire populace showered them with adulation. Wine, women, song, elephants, the works. In the midst of the colossal parties, the lowliest slave was given the job of whispering this in Caesar’s ear: “Sic transit gloria.” A reminder, easily forgotten at the height of euphoria, that all glory is fleeting.

Today a significant part of the dot-com world is experiencing glory’s fleeting nature. Last spring’s parades have vanished and we’re left with a far uglier reality; in September over 5,000 people in the dot-com industry lost their jobs. The number in October was almost twice as large. And by most predictions the trend will continue for some time.

But along with the bad news there is good news. Dot-com managers tend to be creative, resourceful types who, with their companies’ survival threatened, will explore virtually any path to continued existence. Platitudes are plentiful: Desperate times call for desperate means. Necessity begets invention.

And one more: He who ignores history is doomed to repeat it. And history tells us that what we’re seeing today in the dot-com industry has all happened before, under a different guise. Local newspapers and cable networks experienced the same life cycle faced by today’s dot-coms. Initially attracted by plentiful capital and bountiful advertising revenues, newspapers and cable networks flourished. Some cities supported five daily newspapers or more. And cable networks jammed several competitors into narrow programming areas such as business, sports, and entertainment.

As their overhead grew, advertising revenues didn’t keep pace. With profits vanishing, local newspapers (in the sixties and seventies) and cable networks (in the eighties and nineties) reached the only logical solution to their troubles: join with their competitors, or die.

Mergers, acquisitions, rollups. It’s all the same thing. Great benefits arise from putting competitors together: increased efficiency through the use of best technology and best business practices, and diminished marketing costs arising from simplified choices for the consumer.

Consider today’s dot-com landscape: how many health sites are there? How many financial sites? Teens? Sports? Consider how much duplication of content exists among the members of any category. Plus, duplication of sales forces, of space, of programming, of management.

The enormity of the opportunity to roll up publishers will not be lost on the dot-com marketplace for long: American capitalism rewards increased efficiency. Why would the market support fifteen financial sites when two or three will do just fine?

So here’s the next evolution, the next REALLY big thing: a tidal wave of tender offers, friendly and unfriendly. Mergers. Acquisitions. A year from now the dot-com landscape will look very different from today: fewe