State of the Web: Lessons from the Cable Resurrection - TheStreet

State of the Web: Lessons from the Cable Resurrection

A recent investment by Microsoft may portend another miracle.
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Cable got bailed out by the Web. Let's face it. This was one of the great out-of-left field moves we all dream about as investors. An industry that had fallen on hard times, an industry that always had so much potential but couldn't really make money, suddenly stumbled on the big enchilada: the last mile.

When we were in the Green Room awaiting the taping of our TV show, our guest, Bob Olstein, told us about how he'd spotted the change. At first he was stumped. He couldn't figure out why

Bill Gates

was writing a big check to

Comcast

(CCZ) - Get Report

, a company he didn't think had much going for it. He had pretty much written off these companies and couldn't figure out how they could possibly come back to life. But Gates' largesse meant that the richest man in the world had figured out the utility of the cable companies' infrastructure and simultaneously had figured that the regional Bell companies wouldn't be able to monetize their logical position as co-owners of the last mile.

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So, who else has Gates been writing checks to of late? How about

VerticalNet

(VERT)

? We sold this stock after the most recent run-up, but I'm looking for an opportunity to get back in.

Microsoft

(MSFT) - Get Report

makes these investments in order to influence the development of trends. But, as in its choice of Comcast, it sees far into the future of the industries it thinks will be hot.

I know that had I bought Comcast when Gates did, I would have made a fortune, even though the stock had run after the purchase.

Maybe the same will happen with VerticalNet. I don't think I can afford to miss another one of those moves.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.