At one time they were an “internet incubator” funding startup companies that they would, in some cases, sell for billions. Lycos and Geocities were among the companies they invested in successfully. Another company they invested in (actually, the same day theyinvested in mine) was Half.com, which sold to EBAY shortly thereafter for hundreds of mllions. But most of CMGI’s investements fell flat and eventually CMGI evolved into an information technology services company. Revenues, and earnings have become steady, and the CMGI balance sheet is now pristine.The company had $47mm in operating cash flow last year and has almost $200mm in net cash in the bank. With an enterprise valoue of just $421mm the company trades for just nine times cash flows, putting it in buyout territory. And I’m not the only one to think so. Perhaps the besthedge fund in the world, Rennaissance Technologies, owns shares of CMGI. I think Rennaissance is pursuing a strategy of buying companies with enormous amounts of cash that are profitable. The idea being these companies will have a hard time going out of business and eventually will find a business mdoel that will drive their shares upwards. For Rennaissance’s top holdings, click here .

Database company, was over $250 in 1997. Currently trades for just 8x cash flows. 31% return on equity. $8mm cash and no debt.aa

Activist Fund Mason Capital owns 9.5% of the company. ICGE, which his $212 in 1999 is a collection of investments in B2B companies. Mason wants to run their own slate of board of directors and is threatening a proxy fight. They want to change management.

- Ad network is growing. Last quarter they had 100mm paid clicks as opposed to 71mm in the year-ago period. - The company provides a private label version of their advertising adminstration software. They had two new online publishers as customers this past quarter. - Revenue up 26% with net loss down from $4.3mm to $3.9mm in the last quarter over the year-ago period.

Infospace was a former $300 highflyer back in the day and has managed to keep its business profitable by selling products in the mobile space as well as continue its search advertising. Currently, they have $400mm cash in the bank, no debt, and trade for just 7x cash flows. With the loss of a major customer in the mobile space the company has decided to get out of the mobile business. Meanwhile, their search business is declining. That said, the company will still remain cash flow positive and the search business is not disappearing. Given their balance sheet, as well as the funds in the stock, I think the worst is baked into this stock.

$500mm in net cash. $479mm in cash flows. $5.8bb enterprise value. Trades at just 12x cash flows. Monopoly business and they will be raising prices. Domain names not going anywhere.

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