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About Those Internet Plans--Never Mind

October 16, 1998|Reuters

Getting rich on the Internet isn't what it used to be.

Zap Corp., the Texas fish-oil-and-sausage-casings company that back in July unveiled a bizarre plan to transform itself into "one of the largest Internet companies in the world," said Thursday it had decided to stick to fish oil after all.

The change of plans could affect the fortunes of 31 online businesses that Zap had intended to purchase or combine in an ambitious plan to cobble together a leading Web site.

"The company observed that Internet stock prices have declined precipitously from their recent highs and that, in its opinion, valuations of smaller Internet companies have been especially hard-hit," the former Zapata Corp. said.

The news came as little surprise to the Internet industry or Wall Street, where Zap's stock price had already shrunk to a fraction of its summertime high.

Still, the company's admission that it was backing out of 31 deals because of weak stock prices was a telling reminder of the "easy come, easy go" nature of fortunes made on the Internet.

Calls to Zap were not returned, and its fledgling Web site (http://www.zap.com) Thursday bore the message that it was in the process of being redesigned.

For Zap, the news represents strike two in its efforts to become an Internet player.

The company, originally an oil-drilling business founded in 1953 by former President Bush, made a $1.7-billion offer in May to buy the popular Internet search service Excite Inc. Excite scoffed at the offer, saying it didn't warrant serious consideration.

Zap stock fell 38 cents Thursday to close at $6.88 on the New York Stock Exchange.

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