Billion Dollar Buyout

Technology build and redesign creates a 3 billion dollar sale.

Situation

GeoCities was the one of the first and certainly largest providers of free Website hosting for consumers worldwide. GeoCities, the fourth largest site on the Internet at the time, was unable to monetize the majority of its one million plus members.

Findings

While members of the service had agreed to place ads on their websites, the vast majority did not comply. Additionally, each member’s website had a different layout, design, and implementation (frames vs. HTML tables, primarily). The company could not guarantee to advertisers where the ads would show up in their members’ websites. GeoCities called this the “Iceberg Problem” – they could only advertise on a very small portion of their service. The rest was effectively underwater and unavailable.

In one attempt to generate increased revenue and against FreelanceCTO’s recommendation, the company placed a 10-second interstitial ad on their homepage. After traffic dropped to practically zero within 2 hours, the company was at a loss as to what to do next.

Action

Inspired by AOL’s gated community model where users where presented with a barrage of pop-up ads upon sign-in, FreelanceCTO brought pop-up Technology to GeoCities. Through a minimally invasive technique, GeoCities’ entire member base became available to advertisers overnight. Advertising inventory increased over 10,000%.

Result

A year later GeoCities was purchased by Yahoo! for $3.57 billion in stock.