Everybody seems to keep forgetting about Geocities.
They had millions of passionate users who built over 38 million pages on the site. They introduced ads in 1997 and two years later became the 3rd most visited sited on the web.
Yahoo acquired them in 1999 for $3.57 billion.
Yahoo was unable to further monetize those users. There wasn't some magic money tap they could turn on to make money from the site (despite it's popularity). Geocities never made a profit.
I was one of those passionate users on Geocities, to the point where I was given shares in the Yahoo acquisition for my work in the community. GeoCities died on the vine because they didn't continue to innovate on the site building and community they had. They certainly could have been so much more - foreshadowing blogs, social networks, everything myspace became, etc and could have found a way to build the kind of sticky (and huge) audience that monetises better - if they'd continued to develop.
I wonder if it's just that the folks who convince their bosses and boards to make bad moves just don't care. It's a subsidized party. Acquisitions mean travel, splashy events, big budgets, and no one remembers who did what or who's to blame for it as long as you stay a few pay-grades outside of the spotlight, and have a new job before the last one craters.
Picture generals and arms dealers seducing politicians into voting for a war, keeping themselves just outside of the consequence field-of-fire.
This is the only answer I've heard so far that makes sense: cash-rich companies (and investors) have money, and want to spend it.
"It turns out, there's a lot of money in the world. The money is bored. Money wants to be spent! Money is intended to be gambled. These are big numbers, but these are big companies."
- Jason Calacanis, http://youtu.be/SY62KuoxWJ0 [Video]
They had millions of passionate users who built over 38 million pages on the site. They introduced ads in 1997 and two years later became the 3rd most visited sited on the web.
Yahoo acquired them in 1999 for $3.57 billion.
Yahoo was unable to further monetize those users. There wasn't some magic money tap they could turn on to make money from the site (despite it's popularity). Geocities never made a profit.
What's Geocities worth today?