David Wetherell is the CEO and chairman of CMGI Inc., one of the world's largest Internet holding firms. Via one of the first Internet-based venture capital firms, a CMGI subsidiary entitled @Ventures, Wetherell began investing in Internet start-ups in 1995. By the beginning of 2000, he held stakes in more than 45 leading e-commerce and Internet technology firms, including search engine giant AltaVista Co. However, the dot-com fallout that year forced Wetherell to begin reducing his investments and divesting unprofitable ventures. Ranked 22nd among the technology industry's 100 richest persons, according to a list published in 2000 by Forbes, Wetherell dropped to 79th place in 2001.
In 1986, at the age of 32, Wetherell bought the College Marketing Group Inc., which was founded in 1968 as a marketer of educational publications. By the time Wetherell purchased the firm, it had refocused on selling the mailing lists it had accumulated through the years. Wetherell immediately began molding his new business into a database management firm. He acquired a printing and direct mail company, renamed SalesLink, in 1989. Five years later, Wetherell took his company—which had been renamed CMG Information Services Inc.—public, selling 1.2 million shares. By then, Wetherell was already interested in developing Internet-based firms. His first such business venture, a commercial World Wide Web browser named Book Link Technologies, allowed users to search for and purchase textbooks; it was launched with a $900,000 investment and later sold to America Online for $30 million in stock.
With the profits from the sale of Book Link, Wetherell created @Ventures, one of the first venture capital companies focused exclusively on Internet-based firms. Through @Ventures Wetherell paid $2 million for an 80 percent stake in search engine Lycos, which he took public in 1996. He also bought holdings in GeoCities Inc., ThingWorld.com, Silknet Software, Premiere Technology, and Vicinity Corp. In addition to these purchases, Wetherell created two majority-owned companies, Internet marketing solutions provider Engage Technologies and application service provider Navisite.
Both Intel Corp. and Microsoft Corp. made sizable investments in CMG in 1997. Wetherell invested in Ventro Corp., Speech Machines, Reel.com, Planet-All, Softway Systems, and KOZ.com the following year. He also launched online advertising network Adsmart and content provider Planet Direct, which eventually changed its name to MyWay.com. In 1998, Wetherell officially changed his firm's name to CMGI Inc. He sold Planet All to Amazon.com and Reel.com to Hollywood Entertainment, becoming the entertainment firm's largest stakeholder. Just a few months after Wetherell took GeoCities public, Yahoo! bought it for $3.9 billion in stock. Initial public offerings in 1999 included Critical Path, Silknet Software, and Ventro Corp., along with NaviSite and Engage. CMGI acquired Internet advertising firm Ad-force that year. In June, Wetherell orchestrated his firm's largest deal to date—the $2.3 billion purchase of an 83 percent stake in search engine AltaVista for from Compaq Computer Corp.
After stock gains of 604 percent in 1998 and 940 percent in 1999, CMGI saw its share price plummet from $163.50 to roughly $10 with the dot-com fallout of 2000. Like many top CEOs in the dot-com industry, Wetherell was forced to cut costs and streamline operations. He folded the 17 operating companies of CMGI into six business units: search and portals, infrastructure and enabling technologies, Internet professional services, e-business and fulfillment, interactive marketing, and venture capital. Wetherell also canceled plans for AltaVista's initial public offering. Restructuring efforts continued into 2001 as Wetherell shuttered the AdForce unit in June. By then, CMGI had reduced its majority stakes in Internet firms from 42 to 15.
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Willis, Clint. "The 100 Highest Rollers." Forbes. April 2, 2001.
SEE ALSO: CMGI Inc.