Broadcast.com

» see broadcast.com as it lived, on the wayback machine

~ the obituary ~

broadcast.com started in september 1995 as audionet, a small dallas operation that streamed live audio over the early commercial web. the founding motivation was that mark cuban wanted to listen to indiana university basketball games from his apartment in texas, and the existing way to do that involved long-distance phone calls and not much else. cuban put $10,000 into the company for two percent ownership, todd wagner came on as ceo, and the original technical founder cameron christopher jaeb built the streaming stack. the rebrand to broadcast.com happened in 1998 alongside an ipo that priced the company at one of the largest first-day pops the markets had seen.

by 1999 the site was streaming 448 radio stations and 65 television channels live, plus archives of films and audiobooks and music. the technical achievement was real for the era. running that many simultaneous live streams over a 1999 internet, with realaudio and windows media as the codecs, required a server architecture nobody had built before at that scale. broadcast.com became the default place where people listened to a niche radio station from another country or watched a press conference that was not on the major networks.

i did not use broadcast.com in any meaningful way. in 1999 to 2002 i was on dial-up at 33.6k in turkey, and a US-based portal for live audio and video was at the very edge of what my modem could handle. i remember opening the site once or twice and getting a buffering window that never quite caught up with the audio. broadcast.com's actual audience was on US college and corporate broadband, which i did not have. the property was famous in turkey mostly through the cuban story, the texan who sold a website to yahoo for billions and then bought a basketball team with the money.

~ the case file ~

~ the end ~

yahoo announced the acquisition on april 1, 1999. the deal closed in july and was paid in 28.6 million yahoo shares worth roughly $5.7 billion at the time, the largest acquisition in yahoo's history. cuban personally received around $1.4 billion in yahoo stock. he famously hedged most of the position with a collar trade before the dot-com crash, walked away with over a billion dollars in cash, and used the money to buy the dallas mavericks in january 2000. the timing on cuban's hedging is one of the great financial moves of the era.

yahoo could not figure out what to do with the property. broadcast.com was renamed yahoo broadcast services and rolled into yahoo's content portfolio, where it sat alongside other early-2000s streaming experiments without a clear strategy. the licensing economics for streaming radio kept getting worse as the riaa pushed for higher per-stream royalty rates. by 2002 yahoo wound down the broadcast operation. most of the live radio feeds went dark and the video archives were quietly deprecated, the broadcast.com brand effectively disappearing from yahoo's portal navigation.

the financial press has spent two decades calling it one of the worst internet acquisitions in history. yahoo paid $5.7 billion for a streaming property it killed three years later, in stock that was worth a lot less by the time the writedown hit the books. the deal is a recurring reference in business school case studies about peak dot-com m&a, and it is the single transaction most associated with the 1999 to 2000 valuation bubble.

~ what carried over ~

the proof that streaming was a real category, even if the wrong company bought the wrong property at the wrong price. broadcast.com was running the kind of internet radio service that pandora and spotify would later turn into actual businesses on top of much faster pipes. the use case it pioneered, where you opened a browser tab and listened to live audio from somewhere else in the world, became one of the dominant uses of broadband once broadband actually arrived. the site died, the category survived.

the cuban exit money. broadcast.com is the source of mark cuban's first fortune and most of the leverage he used to buy the dallas mavericks. without the yahoo deal there is no shark tank cuban and no NBA owner cuban. the company itself is a footnote, but its sale price is permanent backstory for one of the more visible figures in american business and sports. yahoo paid for that career path with shareholder money it never recovered.

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