Reporter's Notebook: Talking Deals in Telluride - TheStreet

TELLURIDE, Colo. -- The building blocks of most Internet companies are not ideas, but more often deals. Sometimes they've been mega-mergers, like Netscape's acquisition by America Online (AOL) and Sun Microsystems (SUNW) - Get Report. Other times, they're smaller deals, but deals that come to define a company, like drkoop.com's (KOOP) disastrous pay-for-pages arrangement with AOL.

With that in mind, the

Industry Standard

, the San Francisco-based new economy magazine (full disclosure -- the magazine reprints one of my columns each week) held a conference here late last week to talk about Internet deals. The show was called

i_deals

(what is it with the Internet and punctuation anyway?), and it brought together some of the biggest players in the Internet business: Richad Li,

Pacific Century Group's

CEO; Garry Betty,

EarthLink's

(ELNK)

CEO; Steven Rattner, a

Quadrangle Group

managing partner; Megan Smith,

Planet Out's

CEO; and Ted Waitt,

Gateway's

(GTW)

chairman.

They weren't here to talk about the stock market, but the machinations of Wall Street were a common theme, and a few of their comments lent insight into how they view the markets, and how the markets view them. Here are a few:

Halsey Minor, CNet's (CNET) - Get Report founder and chairman, on Internet valuations:

"Since so few companies have made money in this space, it's hard to understand just what the potential for margins is. So you have this kind of weird relative valuation between Internet companies. It's because this industry has such a short-term history. But now things have changed, so hopefully companies will get less credibility for running out and announcing big marketing deals, and they'll have to show profits and results."

Leo Hindery, Global Crossing's (GBLX) CEO, on how you know when a deal isn't going to work:

"Closing dinners are orgasmic events. It's the summer of love. But see who shows up for the first operations meeting the next morning. If it's not a person of stature, you probably pooched it."

Roger Siboni, E.piphany's (EPNY) CEO, on B2B battles:

"When someone comes into our company and talks about what a great partnership they could have with our company, and yet, says 'Hey, by the way, we met with your biggest competitor and they think we're the greatest,' that's usually the best way for us to show you the door. We really resist these competitive negotiations."

Minor, on the fall of Internet stocks:

"I've been through four of these Internet stock meltdowns. The first was just after CNet went public in 1996. While we were on our road show

Yahoo!

(YHOO)

was at 36, the day after our IPO Yahoo! was at 16. This one is different. This one is really different. There are too many companies to chose from and investors have the opportunity to get out there and choose companies that have real fundamentals."

Gary Rieschel, executive managing director of Softbank Venture Capital, on reading moves by Yahoo!, in which Softbank has invested:

"When you see Yahoo! making little investments and trying new things, they're experimenting with a new service. They're fairly predictable about this, because they've been saying the same thing for the last four years: They want to be the only place you have to go to do anything on the Web. So when you see them plunk down $150 million on

Net2Phone

(NTOP)

, you can see that's something they're fairly serious about it. They don't make big bets like that too often." (

TheStreet.com

(TSCM)

has received financial backing from Softbank Venture Capital affiliate

Softbank Technology Ventures

.)

Jim Barksdale, former Netscape CEO, on the three snakes rule:

"We had the three snakes rule at Netscape. We'd meet every Saturday -- senior management would -- and discuss it. Rule one: If you see a snake, don't have a phone call, don't have a video conference, just kill it. Second rule was, and it's really a problem for us, we'd make a decision, then we'd go back and talk about it and discuss it. So the second rule: Don't play with dead snakes. Third rule: Remember that all opportunities start out looking like a snake."

Cory Johnson files weekly from TheStreet.com's San Francisco Bureau. In keeping with TSC's editorial policy, he neither owns nor shorts individual stocks, although he owns shares of TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Johnson welcomes your feedback at

cjohnson@thestreet.com.

For more columns by Cory Johnson, visit his column

archive.