As Internet stocks crash down like a ton of bricks and mortar, CMGI (CMGI) is trying to make sense of it all -- and convince investors it can shelter them from the debris.

At a conference with investors and analysts in Manhattan on Wednesday, executives at CMGI -- a company smack in the middle of the Internet and the dearly departed venture-capital-to-IPO-money-printing frenzy -- had their own explanations for what's going on in the sector.

First, let's survey some of the debris littering the landscape.

Yahoo!

(YHOO)

, the pride of the Internet, closed at $56.38 Thursday, down $26 over two days and less than half of where it was at the beginning of September.

priceline.com

(PCLN)

closed at $18.64 on Sept. 26, the day before it warned that it wouldn't meet analysts' estimates for the third quarter; it's now at $5.19.

TheStreet.com Internet Sector

index is down more than 34% since Sept. 1.

And let's not forget CMGI: At $18, it's well down from its early September high of $49.13 -- not to mention its 52-week high of $163.50.

Bad News Bears

So what's going on? It's pretty simple, figures Peter Mills, managing partner of CMGI's

@Ventures

venture capital unit. "Evidently, there's no such thing as good news in this environment," he said, with a nod to Yahoo!'s fall despite

beating estimates for the third quarter.

Ouch
CMGI's decline vs. the Nasdaq's

That's a little simpler than the explanation offered by CMGI Chairman and CEO David Wetherell. Informed by a conversation he says he had with

Securities and Exchange Commission

Chairman Arthur Levitt, Wetherell said Wednesday that the turn-of-the-year Internet boom -- and subsequent bust -- was caused by all the cash pumped into the U.S. money supply in advance of Y2K in the expectation that people would be withdrawing huge amounts from ATMs for fear of a banking industry collapse. Calling the dot-com fallout "the real Y2K bug," Wetherell said, "It's too bad the millennium occurred when it did. It could have waited a couple more years, as far as I'm concerned."

So much for economic theory. In the meantime, CMGI spent Wednesday hammering in the message that its Net-based companies and investments were not just sensible, but eventually profitable.

For some of the roughly 70 companies that CMGI either operates or in which it has VC investments, the story indeed made sense. But for others, it was just like the case with the rest of the Internet: We'll just wait and see.

Defense

On CMGI's part, the most impassioned defense of its business came near the close of its analysts' meeting, a semiannual event to which reporters were invited for the first time this week.

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In response to an attendee's acid observation that investors wanted to see more reassurance about profits than certain CMGI companies had shown, @Ventures managing partner Jon Callaghan asked his audience to think not just about the companies making presentations, but also about the quality of their revenues and the companies to which they sold their products. The business-to-business e-commerce companies that had just finished a panel discussion, as he put it, worked with "customers whose names do not end in 'dot-com.'"

Callaghan added, "B2B and e-business is not really about the Internet. ... It's about automating business processes."

It was this nuts-and-bolts, getting-business-done type of stuff that occupied most of the analysts' day. And that illustrates the strange position that CMGI is in. It made its fame, and reaped some of its biggest windfalls, from consumer-oriented, pure-play dot-coms like

Lycos

(LCOS)

and

GeoCities

.

Out of Favor

But, as reflected by Callaghan's dot-com comment, those companies have fallen out of favor. And, as highlighted by CMGI's recent reorganization, a majority of present and future revenue is coming not from consumer sites, but from companies CMGI is helping conduct business over the Internet. All it has to do is make sure the market understands that.

So executives at CMGI and the companies in its network spent much of the day talking about business-oriented themes that they believe offer real opportunities for growth and profits in the post-giddy Internet era.

One of those themes was getting companies to use the wireless incarnation of the Internet not to create new businesses, but to conduct current ones more efficiently.

A related field of dreams for CMGI is the multidevice Internet -- building an infrastructure that makes sense in a world of wireless netphones, interactive TV and ever-more-personalized content. That's the mission of

CMGion

, a company that CMGI hasn't until now done too good a job of deciphering for outsiders.

But adding spice to the menu of let's-get-down-to-business presentations was a dash of the old Internet that investors grew to love in 1999 -- New Economy business ideas that seem just a little wiggy. Exhibit A was the disclosure by

iCast

, CMGI's self-described online entertainment community and personal publishing company, that it plans to get into the business of talent management with the help of a recently hired record-industry veteran. You know -- find bands on the Web and earn 10% of their revenues by getting them a contract with a record label. "That is a very substantial revenue stream, but that is not something which develops overnight," iCast CEO Margaret Heffernan told

TheStreet.com

.

Sounds like a mistake. But as executives readily acknowledged Wednesday, mistakes are made. Investments and strategies don't work out. And sometimes the hard-nosed professionals at CMGI get caught up in Internet madness like everyone else.

For example, listen to Rod Schrock, CEO of

AltaVista

, the venerable and useful search engine that, with great fanfare and millions of marketing dollars last fall, tried to relaunch itself as a "media portal." A year later, Schrock says, 93% of the people who came to AltaVista's home page used it as ... a search engine.

"Conventional wisdom was that search companies had to evolve into something else to be successful," Schrock says. "It turned out that was wrong."