Goodbye Geocities! Yahoo has just announced that it is shutting down Geocities. I wanted to say goodbye. We (Intel Capital) made an early investment in Geocities (maybe 1997). I remember the meeting where I first learned about it. One of the people in my organization invited me to a meeting to discuss Geocities with the venture group that was the main investor in Geocities (about 50%), @venture. @venture was the the VC arm of CMGI. The meeting was attended by the CEO of CMGI, Dave Wetherell, and Peter Mills who headed up @venture. The Geocities concept at the time really took my imagination. The idea was that people would stake out virtual real estate and build a presence there (kind of like Second Life without the avatars. The kind of real estate you owned and its location had different values. Users were called homesteaders. Neighborhoods were created to focus on different topics. It was really the beginning of user created content and social networking. The meeting turned out to be an extremely important one to both Intel and to me personally. Not only did I get very excited about the potential of Geocities and the general concept it represented but I got very excited about @ventures and their various investments. I was particularly impressed with Dave Wetherell and learned that he was able to start @ventures with the money that CMGI had made from being an early investor in what was maybe the first browser company (can’t remember the name) which was sold soon after the investment to AOL. I was extremely impressed with Wetherell’s vision. After that meeting, I got Intel’s agreement to make a significant investment into CMGI (December of 1997). It was the first time we invested in a company that invested in early stage ventures (we always wanted to do that directly). Our agreement provided for Intel to also have the opportunity to co invest with CMGI in early stage companies. I became a board observer (at that time Intel did not want to have board positions in companies we invested in do to perceived legal issues…..they no longer feel that way). Being a board observer with CMGI provided me with a lot of insight in the development of consumer Internet which was my main passion. I played an active role with the company and when I left Intel in April 1999 (ten years ago!), I was asked to join the board of CMGI . That worked out for me pretty well. The company soon had a 40 billion dollar valuation and I was able to sell all my vested shares at the peak. Then the bubble burst and that combined with varrious management issues prevented CMIG from executing the vision that Dave had for the Internet. But it did not work out badly for Intel. Intel sold a major part of its Geocities stock to Yahoo prior and during the acquisition of Geocites by Yahoo for about three billion dollars after the company had first gone public. I guess (can’t remember) that Intel made over a billion dollars in its investments in CMGI and Geocities. Not sure how things worked out for Yahoo after the acquisition. Obviously, it did not work out in the long term but maybe it helped Yahoo develop its stong consumer position which it unfortunately did not maximize these last years.
The story of Geocities is important in looking at companies like Facebook, Twitter, Second Life etc. I also suspect there are going to be a lot of sad people mourning the lost of this very important company.
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