CMGI

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

~ the goodbye ~

in 1999 i was a teenager in turkey on a 33.6k modem, and the american stock market was not a thing i could reach even if i had wanted to. cmgi was a ticker symbol in a country whose exchange i had no access to. i knew the companies it owned. lycos and altavista were both on my screen at some point in those years. i had no idea a single holding company in massachusetts had its hands on them.

the origin is genuinely funny. in 1968 glenn and gail mathews founded College Marketing Group, which sold lists of university faculty names and addresses to textbook publishers. it was a direct-mail business. a leveraged buyout in 1986 put david wetherell in charge, the name shortened to cmgi, and by the mid-nineties wetherell had worked out that a company with a database of academics and a mailing operation was sitting close to something much larger.

what he built was an incubator, run through an arm called @Ventures. cmgi did not have one internet business, it had a portfolio of them, and it bought early. the single best trade was a million dollars for eighty percent of lycos, made when lycos was still a research project at carnegie mellon. cmgi also held a stake in geocities and later took altavista off compaq's hands, alongside a run of smaller properties including engage and navisite. buying cmgi was buying an index fund of the entire web before anyone had thought to build one.

the market understood this and priced it accordingly. between 1995 and 1999 cmgi returned 4,921 percent and was the best-performing stock in the united states. at the top it carried a market capitalization around 41 billion dollars, which was more than most of the companies it held were worth put together.

~ the chronicle ~

~ the breakout ~

there is a reasonable version of the cmgi story where it is a decent venture firm that happened to be publicly traded, and a lot of what it did was ordinary early-stage investing. the reason it went vertical instead is that a listed incubator gives retail investors something they otherwise cannot have, which is a share of a private startup portfolio. anybody with a brokerage account could own a slice of a hundred internet companies by typing four letters.

that also made the price a pure sentiment instrument. cmgi's own revenue barely mattered. what moved the stock was how the public felt that week about the internet as a category, and in 1999 the public felt magnificent. in august 2000, near the end of it, cmgi agreed to pay 7.6 million dollars a year for fifteen years to put its name on the new england patriots' new stadium. the building opened in 2002 as CMGI Field and was renamed Gillette Stadium before the season was out.

~ the decline ~

a portfolio that rises together falls together. when the nasdaq turned in march 2000 there was nothing in cmgi that was not an internet company, no boring cash-generating division to hide behind, and the holdings marked each other down in a chain. the stock lost 99.9 percent of its value from the peak.

the holdings went one by one. altavista was sold off in 2003 for a fraction of what compaq had valued it at. engage went bankrupt and navisite was cut loose. what remained was the least glamorous thing cmgi had ever owned, a supply-chain and fulfillment business called SalesLink, which was merged with Modus Media in 2004 and started operating as ModusLink.

~ what got buried with it ~

on 29 september 2008 cmgi formally became ModusLink Global Solutions and the ticker changed to MLNK the following day. that is the death certificate. the entity did not liquidate, it simply stopped pretending to be an internet company and admitted it now packed boxes for hardware manufacturers. it was renamed again to Steel Connect in 2018 and taken over by Steel Partners in january 2025.

the thing worth keeping is the structure, not the numbers. cmgi is the reason a certain kind of investor learned that owning the diversified basket does not protect you when every name in the basket is a bet on the same sentence being true. and the stadium is still standing in foxborough with a razor company's name on it, which is its own kind of marker for how quickly that era got painted over.

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