internet.com CEO Takes His Message to the People

Alan Meckler is down with the people.

The colorful CEO of internet.com (INTM) answered investors' questions last week on the Yahoo! Finance message boards. His appearance underscores the growing importance of the Internet in disseminating information as individual investing takes on growing importance in the stock market.

Analysts and shareholders said Meckler's appearance, which he touted as an attempt to "level the playing field," signals a shift in the way companies provide information to the very people who increasingly buy shares -- but who have long lacked access to CEOs. Even though the executive's comments were occasionally vague, several observers said his goodwill efforts could help the stock.

Reaching Out

Meckler, who will visit the boards once every quarter, sees staying in touch with investors as essential. "The people on these message boards are as big a factor as these financial institutions that have traditionally had access to a CEO," he says. "So I thought it was time to let them participate as well." Meckler also says he'll seek to open the company's conference calls to individuals.

What Meckler did isn't revolutionary -- CEOs such as David Wetherell of CMGI (CMGI) have appeared on the boards -- but it is still rare, and widely welcomed.

"Everyone is competing for investor capital, and investor communication is critical," says Robert Burgoyne, technology strategist with Monument Funds Group, which has holdings in internet.com. "It's going to be important for all top executives to be involved in investor relations."

"I think it's really an indication of how widespread the daytraders and individual investors are becoming, and how important the Internet is becoming," says Safa Rashtchy, a technology analyst with U.S. Bancorp Piper Jaffray. Piper Jaffray has a strong buy rating on internet.com, and was a lead underwriter for its IPO. Piper Jaffray was also co-manager for internet.com's secondary offering.

The Red Carpet

It started on Feb. 11 when internet.com's PR guy signed on as, what else, internetdotcom_pr_guy, and announced that Meckler would visit the board and answer questions about the company.

The questions trickled in, and each night Meckler, under the alias net_pioneer, addressed a handful of them, ranging from details about the company's balance sheet to internet.com's plans to expand international channels to how the Internet will be different 10 years from now.

Many posters were receptive to Meckler's presence, and even applauded him. "It is refreshing to see that you are honest and forthright, even to the little guys" wrote Fishboy89. But not everyone was blinded by the CEO's light. "Quit ass kissing," wrote clubomaha in response. "The only one who really profited from the second IPO was Alan."

Round and Round

As one might expect, Meckler's responses sometimes strayed toward the generic. When asked "what criteria will you be using in deciding what web properties to acquire," he answered vaguely that "first-mover and top quality content are the keys to any site that we purchase."

And, out of necessity, he shied away from direct stock inquiries, until mthuss asked, for the third day in a row, what price Meckler considers good for a stock split. "Stock splits are always in the cards, but we have not considered doing one at this level," Meckler said diplomatically. Mthuss also asked what the executive attributes the "disappointing performance since late December" to. "I have no idea why the stock goes up or down ... I cannot control the market price other than by working hard," Meckler said.

When the stock dipped a bit Thursday (internet.com saw a low of 49 15/16 and closed at 52 1/2) message board posters wondered if Meckler's comments had anything to do with it. "Did the alias of A.M. say something wrong ???" wrote realhamburger.

And not everyone was happy about the prospect of Meckler trolling the boards with the little people. "Can we stop with these crap posts?" wrote turk636363. "Unfortunately, this is all due to the fact that Alan is reading the board. Idiots."

There were also a few silly questions Meckler flat out ignored, like the one from CheapAutoInsurance: "Why does Almond Joy have nuts, but Mounds doesn't?"

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