marchFIRST

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

~ the last words ~

most of this archive is products that people used. this one is a company that got paid to build them for somebody else, which normally means nobody remembers it at all. marchfirst is remembered because of how fast it went.

whittman-hart was a chicago systems consultancy run by robert bernard, unglamorous and profitable, doing the kind of work where you install software for a midwestern manufacturer. usweb/cks was the opposite: a santa clara roll-up of web design and branding agencies with a stock price attached to the word internet. in december 1999 whittman-hart agreed to buy usweb/cks for 5.7 billion dollars in stock, with usweb holders ending up owning fifty seven percent of the result, which is not really what buying means.

the new company incorporated on 1 march 2000 and named itself after that date. nine thousand employees on the payroll, roughly eight thousand of them in the united states, sitting under a press release that called it the largest internet services company on earth. it was nine days old when the nasdaq peaked. that is the whole joke and it does not need any help from me.

i was a student in turkey that spring with no idea any of this existed. what reached me was the downstream version. free web services i used started closing and hosting companies stopped answering. the general noise about the internet being a career changed tone somewhere in 2001. companies like this one are where that noise was coming from.

~ the record ~

~ what the merger actually was ~

two businesses got stapled together that had almost nothing in common except the year. whittman-hart billed by the hour for enterprise integration work that would still exist in a recession. usweb/cks was itself a stack of agencies bought with paper, selling brand campaigns and websites out of budgets that vanish the moment a client gets nervous.

the pitch was that clients wanted one vendor who could do the strategy and the plumbing at once. the reality was that the acquiring company's steady revenue was now attached to a cost base sized for a boom. when the boom stopped, the hourly work could not carry the rest of it.

~ thirteen months ~

the share price topped out around fifty two dollars. in october 2000 marchfirst reported a third-quarter loss of 437 million dollars against a nine million dollar profit in the same quarter a year before, and the stock fell about sixty percent on the news. from there it was a countdown rather than a recovery.

bernard and the leadership around him resigned on 13 march 2001, two weeks after the company's first birthday. on 2 april divine agreed to take about twenty offices and the sap consulting practice in a deal worth up to 120 million dollars, which is what nine thousand people and 5.7 billion dollars of stock had turned into. chapter 11 followed on 12 april and the case converted to a chapter 7 liquidation before the month was out.

~ the legacy ~

the pieces went out in every direction. divine took the largest share and then failed itself in 2003. avenue a/razorfish picked up offices, others went to sbi and to itera. bernard bought back a fragment and restarted it under the old whittman-hart name in 2003, which is the rare case of a dot-com founder walking backward through his own merger.

what marchfirst actually demonstrates is where the money in the bubble went. not all of it burned inside the famous consumer sites. a large share of it was paid out to consultancies to build those sites, at rates that assumed the work would keep arriving. when the clients died, their vendors died about six months behind them. nobody wrote retrospectives about the vendors, because there was no logo anyone had ever loved.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »