Internet Capital Group, the 9 year old dot-bust wunderkind is making news by acquiring a large block of preferred issued by Qcorps Residential, dba WhiteFence. Many may remember ICG from the heyday where they were among the high fliers which grossly over invested in internet software companies. (Confirming the blind squirrel and acorn operating principle a couple of those 'investments' that realized a modicum of positive performance still sit in their portfolio - e.g. VerticalNet.) Founded in 1996, growing respectable in its first 3 years, ICG morphed into the poster child of irrational exuberance with a portfolio stuffed with over-hyped, valuation inflated dreck. They are still in Fed and State courts in class action proceedings from odd relationships with analysts and their economy with truth. Let's hope they've learned some lessons but this PR sounds much like those issued during the run-up to the meltdown:
“After focusing intently on positioning our Core partner companies for success and profitability, and strengthening our financial position, we’re excited to apply the expertise and experience we’ve accumulated to acquire a stake in a new company,” said Walter Buckley, Chairman and Chief Executive Officer at Internet Capital Group. “With a very deliberate approach, we’ve spent significant resources evaluating potential acquisitions, and believe WhiteFence represents a valuable addition to the ICG network. With a web-enabled Internet software platform, a comprehensive, scaleable [sic] solution that captures important transactional data, and a very large market opportunity, WhiteFence is positioned to create long-term value for ICG and its stockholders.”
The Company generates revenue through customer acquisition payments from its network of over 400 service providers, which include the major phone companies, electric utilities, satellite providers and natural gas providers. In 2005, revenues are expected to be $9 million, representing an annual growth rate of over 70%.
I don't for a moment doubt that ICG has accumulated some valuable experience and expertise. I also don't doubt that many of the touts and klingons that infested the organization are long gong. And certainly ICG is not the only spectacular notorious flier/failure from those days in the late 90's through March of 01 that have survived though not necessarily prospered. ICG is not rising like a phoenix but it is at least acting like a viable ongoing concern. It remains to be seen if they have experienced enough, learned enough and improved enough to provide an adequate return for their shareholders. Time will tell.