Fudge Sunday - Reflections on a Dot-Com Legacy

by Jay Cuthrell
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Start the week more informedJust over 20 years ago I met with investment groups that later turned into a new direction in my career. While the .com days were a mixed bag, some of the companies rolled up into other companies which continued to roll up into other companies. If anything, I’ve learned a lot about the long and sometimes winding path of nested mergers.

The Right Angle Turn

Nortel Buys Bay Networks (1998)

Because Lucent and Cisco.


My first merger was when Bay Networks was acquired by Nortel. By that time, it wasn’t that big a deal for the small Nortel group I worked in because we primarily used Cisco and Lucent technology already. Ooops.

As such, we didn’t last long enough to have a forced integration that I can recall. In fact, the Nortel group I was in was getting shopped around to other potential buyers. As fate would have it, the technology briefings and M&A teams led to me meeting the new people I would eventually work with for the next few years.

Dot-Com Destiny

By 1999, web consultancies and digital agencies were smaller boutique shops known for interactive multimedia and cutting edge websites. Back in those days, systems administrators in a firm would support the content creation talent commonly known as webmasters. In fact, some agencies would even offer web hosting of this modern web content.

My iXL Moment

1999: When websites said "This site is best viewed with Netscape 3.02 or later"1999: When websites said “This site is best viewed with Netscape 3.02 or later”

iXL was one of the growing web consultancies and it had acquired several digital agencies. While at Nortel, I had met iXL’s investors and some of the companies iXL acquired over the years.

Some of the iXL team liked me. So, I joined iXL in 1999.

At iXL, I literally traveled the world. It was a fire hose of new information to assimilate quickly. I learned a lot in a very compressed timeline.

Competition and Consolidation

We had competitors like Scient and Sapient. Scient had a clever landing page for their homepage so that if you viewed from a competitors known SWIP CIDR block (like from iXL HQ) you’d get their careers page. Cheeky.

By 2001, the pressure to combine forces or merge in hopes of survival were a well known pattern. This was the Dot-Com bubble bursting.

Winter had come. That cheeky web parlor trick company, Scient, would become iXL’s acquirer. We became the small red “i” in the Scient logo.

Scient and iXL Merge (2001)

My second merger.


I kept traveling. I kept working. Eventually both came to an abrupt halt. Like many folks during the dot-com burst, I learned about how to log into PACER and read legal documents.

And for my next trick ( 2002 )

Good times until they were not.


Technically, I missed the opportunity to go into a nested merger. For that experience I’d have to wait another 14 years. Instead, I went on to have fun elsewhere and do other things.

Aggregations and Acquisitions

So, over the next 14 years I kept an eye on what Scient (iXL) had gotten up to and where the parts of the company ended up landing. Amazingly, the back and forth leads to unexpected combinations that seem almost like the lead up to 1999 all over again.

SBI acquires Scient (2002)

Chapter 11 and the SBI roll up


SBI acquires Razorfish (2002)

And the .com deals keep rolling up


SBI sells Razorfish to aQuantive (2004)

This feels like Three-card Monte of M&A at this point.


Publicis to Buy Digitas (2006)

Hint: Keep an eye on Publicis.


Microsoft buys aQuantive (2007)

By this time, Microsoft was willing to pay $6B to get into this market… because of DoubleClick and Google.


Publicis to Buy Razorfish (2009)

A few years later, Microsoft would write down most of aQuantive.


Publicis Buys Sapient (2014)

It’s like that old saying if you can’t merge with Omnicom, go shopping instead. And boy did they…


Publicis creates SapientRazorfish (2016)

Combined by a most circuitous route!


Publicis Sapient is formed (2019)

Shorter name. Bigger ambitions.


Publicis to buy Epsilon (2019)

And… $4.4B scene?


Final Thoughts

If you had told me in 1999 that the company I was working for would become part of the third largest communications company in the world, I might have been a tad skeptical. Still, what an amazing recreation of the consultancy roll up model over the course of 20 years. This time, however, the consultancy is now paired with massive advertising as well as far reaching data assets and targeting capabilities.

Place your bets now on when older firms like WPP, Omnicom, and Publicis combine or adjust size in the top three listings. The relatively newer firms like Google, Facebook, and Amazon are placing their own bets too.

Amazon, Google, and Facebook (2019)

Hundreds of $B are at stake. Expect spirited competition from the older big three and the newer big three.


So, until next time, thanks for reading Fudge Sunday.


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