A couple of decades ago, it was deemed absolute madness: In 1989, Henry Kravis paid a staggering $25 billion to snatch RJR Nabisco from F. Ross Johnson in a bidding war that inspired books and infamy. When Kravis sold his stake at a loss in 1995, it seemed like poetic justice – a fitting epilog to a decade of decadence.

Little did anyone know that a new get-rich-quick bonanza was taking shape right around the corner: That same year, Jerry Yang and David Filo incorporated Yahoo! Now, Yahoo!’s market capitalization is about $30 billion. In retrospect, Kravis’ $25 billion bidding war seems slight.

Today the stakes are bigger (and riskier) than ever. M&As have been replaced by Internet IPOs. Junk bond funding has been supplanted by press releases heralding e-commerce plans. Illegal insider trading that used to net millions has given way to perfectly legal insider buying and selling in which executives time the exercise of options with big Internet news about their company. It used to be divisions and business units. Now it’s spinoffs and tracking stocks.

No longer must startups beg for money. Today, it seems that just doing something…anything…on the Internet is the easiest way to access a seemingly limitless pool of cash-all to fund a frantic land grab on the Wild West Web. Profits are fast becoming irrelevant in a world driven more by expectations than by deference to quarterly earnings. As many companies are finding out fast, turning your attention to cyberspace these days can take your stock to the moon – at least for a while.

The name game

The attraction for some companies is to make loosely defined Internet announcements-or simpler yet, just hang a “.com” on the end of an existing brand – and it has become a public-relations game that seemingly anyone can play, with lots to gain and little to lose. “We’re the dot in .com,” announce Sun Microsystems ads (see “Logrolling in the Digital Age,” p75). Great, but what in the name of Tim Berners-Lee does that mean?

“Some companies have deemed themselves Internet companies just because they have a product for the Internet,” explains Gary Arlen, president of Bethesda, Md.-based Arlen Communications. “Put a ‘.com’ at the end of your name, and who knows?”

Software.net turned into Beyond.com. Axxess became FinancialWeb.com. Sporting goods distributor California Pro Sports renamed its operating unit ImaginOn.com after merging with ImaginOn, the San Carlos, California – based software company. And today, the process seems exactly the same. Nothing learned?