We're taking the Microsoft meeting.
Gates will try to close us on some kind of strategic partnership.
Or eliminate us entirely.
I just want to be clear that Microsoft owns the Internet.
Either partner or compete.
That's when Microsoft declared their efforts against us.
Wall Street has finally got a new favorite child in this bland little
strip mall called silicon valley.
I feel like we go broke every two weeks.
All we need is somebody who's willing to roll the dice with us.
I'm in.
We were now on this mission to go into a bigger pond,
relocate to New York City.
-We're up!
The whole team could not have been more excited.
- Michael fenne? - Huh?
Can I show you this?
I took a bunch of existing technology and frankensteined it together.
We are going to be very, very wealthy men.
-Yea!
You're folding the company?
Please tell me you got the patents?
What? You think I had the time to get the patents done?
It's David.
This guy who has been calling himself Michael fenne
is really a fugitive of the law.
David Kim Stanley.
God has blessed me with a unique ability to defy reality.
The fatal error is a piece of code that causes the program to abort.
Things completely stopped working properly, like you can't continue.
Something went wrong that we can't recover from.
It can be presented in a variety of ways and the really irritating thing is when it
happens arbitrarily and not consistently because it makes it really hard to fix.
The folks at time called us and said they wanted to put him on the cover.
It was always work to get Marc to agree to do too much, you know, to do anything.
I think he was never thrilled about this cover, you know, the fact that he was pictured
on a throne with bare feet.
Okay, let's try one with a little bigger smile.
Great.
Do you see that?
This is Marc andreessen on the cover of time magazine.
This was quite the moment for us.
Look at these toenails. Crazy, right?
Marc, how's my favorite pin-up doing this morning?
You hanging in there?
How often would you say you clip your toenails?
How often do I clip my toenails?
I dunno.
About once every two weeks, I guess, y'know, unless I'm gonna be some place where
people are gonna see my feet.
Like, say, on the cover of a major news magazine?
You're barefoot?
Apparently the idea is these aren't your father's titans of industry.
This new generation doesn't play by the rules, or own shoes, for that matter.
Well, uh, they ask you to take off any more clothes, you let me know.
Jim Clark's on.
Come on, light, come on!
Jim.
So I got a call this morning from Rick Washburn at kpmg.
What are you doing?!
You're cutting me off!
Now what are you doing, you're stopping?
C'mon!
Kpmg is removing navigator software from their system.
They're terminating our relationship.
What do you mean terminating?
We just made the deal.
Apparently someone paid off our contract.
Someone?
Someone who can afford to pay off $25 million contract
without blinking an eye.
I'll give you three guesses.
Microsoft Pig.
Kpmg's a big consulting firm.
I'm not saying it ain't a kick in the kiwis, but.
- 17,000 users, 120 U.S. - offices down the Toilet.
Come! On!
Look, we got Microsoft beat on market share.
We got 'em beat on tech.
So they're throwing money at it.
We just keep doing what we do.
Navigator 2.0 still on target for a February 5th ship date, Marc?
Marc, you there?
Marc? You there?
Look, buddy, I'm in no mood.
Ahhhhhh, oh my god, oh my god!
Amy. Amy.
Shh, listen to me, listen to me.
You see all that? It didn't happen.
It didn't?
No. That dude ain't here.
Also, I don't really exist. You understand?
I'm an amalgam of all the various investment bankers of the period.
Right.
I'm imaginary. You understand, right?
- Yeah. - Good.
Now give me a second, I have some explaining to do.
So while Microsoft didn't literally kill anyone,
they were coming hard after netscape.
And in a fashion that would make a gangster say,
"oh my god, that was pretty gangster."
Let me explain it to you.
So in 1980, IBM was 3,000 times the size of Microsoft.
I know, right? That's huge.
But ten years later, gates ruled silicon valley, and big blue was gasping for air.
You see, IBM just wasn't aggressive enough in fighting off the upstart.
And gates was not about to let his $100 billion baby suffer the same fate.
Microsoft intended on staying on top, and to accomplish that,
one thing remained They needed to make netscape dead.
Again, just a metaphor.
Like, they weren't actually killing, anyway.
Ah. Whoo. I'm back.
Hey! Get movin', man!
Investors clamored to buy shares of Amazon. Com this week.
One in every four ipos is technology-related.
You better get on board now.
Institutional investors gobbled up the most
promising new issues.
Some of these valuations are in another galaxy.
Valuation levels in the Internet industry are just obscene.
We're in a true mania for Internet stocks.
So you had a lot of people with a lot of money and nothing to do with it.
So you had parties and ferraris and planes.
And they were all just like spending crazy amounts of money,
they wanted like the best gourmet food, they wanted parties.
The parties were lavish and everybody is there kind of schmoozing and that
was a big part of the culture at the time.
The nights were just whirlwinds, you know,
you wouldn't just go from party to party.
And if you went somewhere and it wasn't that exciting
you'd just move on to the next place.
I mean, at a certain point, you'd just hear about some of the parties from your friends
and you would go to these other parties, you couldn't, you know, hit everything.
It got to the point where there could be 6 or 7 launch parties in one night.
It was great, if you were in your 20s or 30s and single, which basically everyone was.
I just don't get it.
What's there to get?
Jeeves. Jeeves.
I'm desperate to know, say, Latvia's biggest export and I ask jeeves?
You're desperate to know Latvia's biggest export?
Maybe.
And because I'm a discerning seeker of information, my first thought of course is to
go online and ask jeeves, who's a Butler.
Jeeves isn't a Butler, he's a valet.
He takes care of the master of the house, lays out his clothes, handles.
How's that not a Butler?
The point is of all the literary characters they could have built their company
concept around, this is who they choose?
You are way overthinking this.
Or maybe they're way under-thinking it.
That Butler's valued at 900 million pounds.
But whatever.
Some of the parties were insane.
Startups were throwing $100,000 parties before they'd even earned a cent.
Does anyone have a clue what this company does?
Anyone?
Something to do with shells.
Y'know who would have the definitive answer on this?
No! Don't!
We should ask jeeves.
To our generous hosts.
When your company invariably goes belly up due to profligate spending
and an utter lack of revenue.
We shall remember you, whoever you are dot-com,
if not your name or the service you offered.
But!
For this magnificent array of free food and beverage you provided
before your untimely demise.
You put a dot-com on anything and its value went up in the minds of people or
you looked cooler or you seemed more important.
And so businesses were putting dot-coms on the cover of magazines
and they didn't even have websites.
And if they'd had a website, nobody was running it,
cause they didn't even know what it was.
The Internet was the hot thing and everybody knew they needed to be there,
bringing Internet streaming to Hollywood, this was an idea that Hollywood was already
vastly interested in.
To have high quality video over the Internet.
That was enough to get anybody's attention in those days.
Hi, I'm Michael fenne.
After Robert dunning and Michael fenne part ways, Michael quickly starts showing
off the same digital motion off-the-shelf technology to a whole new crop of investors.
Right up there, ok, thank you.
He's now started a whole new company called pixelon.
Only this time Michael is passing the technology off as, uh,
proprietary technology that's unique and has never been, uh, done before.
And he's passing himself off as the brainchild behind all of it.
Hello Mr. Fenne, how are you?
Brian.
Hi, Brian. You see that?
Guh, look at that. Keep it up boys!
Brian!
Wow, working at a big time Hollywood studio, that must be exciting.
Oh, yeah, definitely.
We're going to go pick up stu up at the marketing building.
But you hate marketing.
Um.
Don't worry, I ain't gonna spill the beans to your boss.
Marketing's fine, it's just, y'know, it's not my life's ambition.
Let me guess, you want to direct?
No, I'm actually, I'm hoping to be a costume designer.
Don't hope. Just do it.
It's Brian, right?
Don't let anything stop you from achieving that goal.
You do whatever it takes, you hear me?
Hey! I need you to say it, Brian.
I need you to say that you hear me.
- Um, I hear you. - Atta boy.
Thanks. He's up there.
Pixelon was gonna be everything.
Pixelon was going to be the platform that delivered content,
but they were also going to be the content provider, themselves.
They were going to have a thousand channels.
There he is.
Stu Keller. You must be?
Michael fenne. What a pleasure.
Pleasure is all mine.
I'd like to introduce you to my creative team, why don't we hop in the back.
Alrighty.
Now Joe q. Public, he's a hard core trekkie.
He can wish you a merry Christmas in klingon and romulan,
and he is dying just to know what that new movie's going to be like.
So what's Mr. public do?
Buy a ticket to "men in black" and he's just hoping and praying, dear god, please,
I'll be good, that they show that star trek trailer?
Or watch TV all day long, just wishing on a dream?
If you were Paramount the last thing you wanted was to get beat by one of your
competitors, and they're putting some sort of trailer for their next big movie that
you're competing against and they've got it on online and they've got it on the Internet
and you don't.
It's all about file compression.
Hey, do you remember that movie, "sunset boulevard"?
Gloria Swanson, she says, "I'm big, the pictures got small."
Well, it's 50 years later, the pictures got big again,
only someone forgot to tell Microsoft.
Have you seen their windows media player?
I'm not one to speak ill of a competitor, and bill gates, fierce competitor and a
friend, but the screen's so minuscule you need binoculars to see the damn video.
We're talking star trek here.
Alright.
Prepare to boldly go where no man has gone before.
Go ahead. Get in there.
Hey, I'm a big fan.
Get in there, watch this.
It's really, really easy to fake it.
And that's what they would do.
They would take a video and show it on a pc and they'd say,
this is what it looks like only over a 56k modem.
Now, we've got some things we have to figure out.
It's not quite ready to let you just dial in right yet, but look, it's on a pc.
Well, anybody can do that from a hard drive.
It's really easy to see how Paramount and some of these other companies
might have cut these deals.
The downside of making deals very quickly is that you had
a lot less time to scrutinize 'em.
Hing is.
The original blublockers sunglasses, block 100%
of the ultraviolet and blue light, and lightweight nylon frames, carrying case...
You know, I never thought sfgirl was going to be this phenomenon.
So I have this box of, like, sfgirl memories, and one of the things I have is this
little case just full of business cards I collected.
It really just started as a way for me to make social plans.
I'd recently left my job for the tech industry and thought it'd be fun to start
hanging with more tech folks and that whole scene.
So I trotted out my new programming skills, then sent an email to 50 people,
was like, "hey, I made this website."
I actually toyed with the idea of calling it "the watering hole" because I was thinking
it would be a place to meet up and for people to connect.
I went with sfgirl. Com instead.
Anyway, people started inviting their friends to go on the site,
and things just sort of took off.
Morning, sunshine. I made you coffee.
But then I drank it.
Oh.
I'm late for work. I gotta go.
Well, party's at Ruby Skye tonight, right?
Yeah, hopefully I can make it.
We have this deadline at work.
Patty beron missing a party?
So we were working our day jobs, but then we were going to these insane
dot-com parties at night.
People would say, "my company's having an event, it's going to be super fun,
everyone's invited."
The cynosure health project is 2 weeks behind.
Gavin, Jess, Julianne.
"Party exchange" sprang from that.
People would go on there and post where to find the coolest shindigs and soirees.
That's when sfgirl really started growing.
I did all the correspondence, I came up with story ideas for the writers.
We had site analytics and we even had a server when the site started getting bigger.
Around 20,000 visits a day was average.
Patty, Patty, could you come in here?
I know the cynosure health job is due on Friday
and we're racing the clock on that.
It's just.
There's this party.
Yeah, and I was planning on coming in early tomorrow.
I don't want you to think I'm.
I don't think you're, look, I want to go tonight.
To this party.
You want to go to the party?
Yeah.
I was curious how hard would it be to get on the vip list?
Consider it done.
But if we see me there, just keep walking.
Oh, okay.
I'm just joking, Josh, we're good.
The parties definitely were for networking.
I mean, like, oh, what do you do, wasn't such a boring question back then,
it was like, oh, I'm working on this, and you should check it out and it was like
everything was kind of new and exciting.
Mike Egan very much wanted to own 51% of the company.
That level of investment meant that he was entirely absorbed with our future success.
Yep, totally. I agree.
So, I had been an investment banker, then I met a gentleman named Michael Egan who is the
owner of alamo rent a car, which we sold and then formed dancing bear investments to
begin investing that capital.
Yep, I'll let him know.
Todd's right here, actually.
Mike says hi.
Hey Mike.
So Ed was Mike's right hand, he was Mike's interpreter and representative, ambassador,
and also our ambassador back to Mike.
Yeah.
Mike wants you to run the numbers on maintaining the subscription model.
I thought that was a dead issue.
It's Mike. He likes to be thorough.
It's just theglobe's been charging for access.
Meanwhile, geocities has no paywall and is absolutely killing us on user growth.
And how much did geocities lose last year?
That's not the, it's like with drug dealers.
First one's free, right?
You get them hooked, then, I don't do drugs, or sell drugs.
That's not the best example.
What I'm saying is revenues don't matter.
They matter to the guy who may or may not be writing you a $5 million check.
Todd and Steph were espousing their belief that we must remain free and we must grow
the user-base at all costs.
To grow, you know, the way Facebook grew later on, you know, a decade later.
And Mike, knowing he might have to foot the bill, was look,
we should have a path towards profitability.
Mike's ultimately going to see it your way.
I absolutely believe that.
He trusts you and Steph.
You should see the way he lights up when he talks about "the boys."
But run the numbers.
Where is Steph by the way?
He's uh, I'll go get him.
Mike eagan was coming in guns blazing with his investment thinking,
"oh my god," your 20 new subscription models we should add on.
And so people can subscribe to their different daily community, subscription,
subscription, subscription, and eventually, Todd and I had to tell Mike,
"Mike, that was, that was yesterday's model."
It's not about the revenues. Did you explain that?
Yes, I explained that.
Do we even want his $5 million?
Do we want $5 million?
At that valuation, we'd be giving up an awful lot of control.
Do we want $5 million?!
Steph, I mean, we've spent the last four months, killing ourselves to close this deal.
We've burned through our initial stake, not to mention a big chunk of our own money.
I can't speak to your finances, but I had to race to the bank to cash my
grandmother's $25 birthday check so I didn't overdraw my account.
Plus our servers, which I don't know even know if you know this,
are kind of important to what we do, are basically being held together with
rubber bands and scotch... Hey Jeremy.
Oh hey Todd, how's it going?
I spilled coffee.
Hey Jeremy.
And you can say goodbye to Jeremy!
I love Jeremy.
Who doesn't love Jeremy?!
But we can't afford him and a dozen other people if we don't get more money.
And in case you forgot, the whole reason we're even having this conversation in the men's
room is because you have been having non-stop stomach aches from all the stress.
You yelling at me is definitely helping on that count.
Look, I agree $5 million for half of the company is steep,
but this is our best shot here.
You're right. It is. It is.
I know, I'm being neurotic.
It's our baby.
Of course you're being protective.
Our baby. Aww.
That's not what I...
Todd, we have so much to discuss about fatherhood.
We had many debates. And we had them all the time.
Ultimately, we decided, remove the subscription model.
The moment we made it free, site traffic went up exponentially.
Overnight.
Mike was very generous about allowing us to make decisions,
many that were not good decisions.
But he always had an opinion and he often shared his own vision of how things
should be and sometimes his vision was just miles away
from how it actually needed to be.
Did you get him up to speed?
Yeah. We're on it.
Hey Mike.
Hey, when we first met, did you think one day
we'd be having a baby together?
I'm really regretting using that word.
She's growing up so fast.
One day, she's going to be a full-fledged online virtual community.
And we'll be like, where did the time go?
You are so weird.
G My butt, right?
Go on.
And the she takes off my shirt, and then I take off her shirt.
Bra or no bra?
At this point, the bra's still on.
But she says maybe we should move to the bedroom.
I'm so hard right now.
Definitely keep going, I'm almost there.
I didn't realize you were around, Tara.
Sorry. I'll tell you the rest later.
Seriously Tara, I can't get dsl at my apartment.
This is my porn.
Fine. I'll put on headphones.
So you're going to the bedroom.
Right, and that's when I hear it.
Hear what?
It was her computer.
What? What did you hear?
Bling! You've got mail!
Aol?! No! America online!
And that's not all.
She's not just an aol subscriber, she's a software engineer there.
Tell me you walked out the door.
It had been eight months since I'd, look, maybe you get laid on a regular basis.
Yeah, it's pretty much non-stop.
Well, the sex was pretty amazing.
I don't care if her vagina could do card tricks, that is not okay.
I thought you put headphones on.
I used to have a modicum of respect for you, Sean, but now it's all gone.
Come on, it's not like I had sex with a serial killer.
A serial killer can probably write better code.
Aol was maligned. We didn't take it seriously.
It was based on this platform that wasn't the world wide web.
You've got mail.
It was, it was a joke I think to a lot of us.
Aol. Gross.
Booyah.
Aol was successful during that time because it made the Internet accessible.
The Internet was very daunting and the aol made it easy to log on
and to connect with other users.
Casually, among friends, yeah, you could easily talk smack.
Aol had been a company that had been seen as sort of less savvy and less of a tech
company and the fact that they had continued to stay relevant over all the years,
was amazing to me.
I get it.
Looks like somebody ate a ate a tacky-ass souvenir shop and then threw it all up,
but this is buck's of woodside, California, a place where founders and vcs
go to mate, a place where multi-billion-dollar deals are just called "Tuesday."
Hey hey!
I know these guys.
Marc andreessen, what's happening, baby?
He don't like to be touched.
But uh, I swear, he's a friend of mine.
Hey, man, I'm gonna call you!
There's these stories at silicon valley
where people would go to bucks for lunch or breakfast
and they would sketch things out on a napkin
and people would invest in them.
At aol we didn't believe we could do it alone.
We wanted to create a tapestry of alliances and together do something that we couldn't,
none of us could do separately.
The way I see it, it's Roosevelt and Stalin
coming together against Hitler.
Which one of us is Stalin?
Well I've been known to enjoy a vodka or two, I'll take the hit on that.
So our teams will get down to brass tacks on licensing fees, what not.
I think we should be able to resolve this all fairly quickly.
Here's We don't want to just license netscape.
Alright. What did you have in mind?
If we combine our strengths, we can build a firewall against Microsoft.
The aol browser's not blowing any skirts up.
We know that.
Navigator, on the other hand, your tech is incredible.
But from a content standpoint.
We're not a content company.
Which is my point. We are.
You have all this traffic coming through your website.
And what do you got on there?
Some press releases?
Links to articles in infoworld?
Aol would take over programming and ad sales for your site.
Wow.
And we'd also want a seat on the netscape board.
How about we give you a back rub and a big wet kiss every morning too?
If that's gonna be a condition, I'm gonna have to check in with my wife first.
What my colleague here is trying to say is that's an awful big ask.
Especially in light of the fact we have 90% of the browser market,
which is the market.
You have 90% now.
You've also got Microsoft breathing down your neck.
We'd be driving our six million users to netscape.
Not to mention the ancillary benefits of being linked with
the best known brand in cyberspace.
Aol's the best known papyrus company in the era of the printing press.
And netscape is gutenberg?
Look, aol is a helluva brand, no question.
But so is netscape, and frankly we're a lot hotter.
And your users are leaving in droves.
Is that telling you anything?
Because here's what it's telling me.
It's telling me people don't want to pay $3.95 an hour for your content when netscape is
giving them a gateway to infinite content for free.
It doesn't take a futurist to see which way this is headed.
People have been predicting aol's demise
since before netscape was in diapers.
We weren't big enough to compete with prodigy and compuserve.
We were too lightweight to make a splash in the tech world.
Microsoft was going to kill us with msn.
Yet here we are.
We negotiated a straight licensing deal with aol.
We thought "my god, here's a big behemoth online service
that's gonna use our browser."
Our stock went up 16% the day we announced.
No, I understand.
No, I appreciate you callin'.
Okay, bye now.
The next morning, they announced that they had done a much tighter deal with
Microsoft than they did with us.
Microsoft was in at aol.
And their browser won the default position and that's what you wanted.
As part of that, they agreed to bundle aol into the windows operating system.
It didn't negate our deal, but it might as well have.
They were locking us out, Microsoft was actively making deals,
doing things that would make it hard for us to sell our browser.
Hey, you wanna hear something?
Microsoft sandbagged us, again!
It's so shady.
It's worse than shady, it's sleazy.
And aol, with their song and dance,
"we hate Microsoft. Microsoft is the worst."
What?
Nothing.
You're always so gentlemanly.
I don't think I've ever seen you so worked up.
I get worked up sometimes.
No, I like it.
Jim barksdale used the word sleazy.
Sleazy sonsa'bitches.
That really pissed me off.
When we announced our partnership with Microsoft, there were people at netscape
that were annoyed.
I did talk to Jim barksdale.
But there were some, initially, some frustrations, some hard feelings.
God, it was infuriating.
I mean everybody was so angry.
It didn't matter whose product was better.
Um, that was the product that was getting installed
and we had no way of fighting against that.
That's back when we were both fighting hard for market share.
Netscape did start losing market share, so I'm sure it was a tipping point
in terms of the browser wars.
And by then it was getting into, do you win against Microsoft or not?
And they did business deals with their throw weight and resource
that we couldn't even get near.
We were a browser company, we were the browser company
and we were losing the browser war.
A do business with you guys."
"And I'm ready to invest $5 million."
This is the real deal.
We're gonna go from almost running out of money to the big leagues now.
What happens if you expand the features included in the free service,
while lowering the price point for the gold and silver memberships?
That's in there, page five, I believe.
Mike is someone who, on his companies had made big bets to make big money.
Todd and I knew this was our one shot.
Yup.
I think our valuation is too low.
Like way too low.
We are not a $10 million company.
We're just not.
If you consider what yahoo's doing.
No offense, theglobe is not yahoo.
Two years ago, yahoo wasn't yahoo.
Now they're a billion-dollar company.
Look, we're onto something here, guys, I can feel it.
Todd feels it.
Mike, Ed, I think you guys feel it.
Yahoo connected people to the Internet.
We're connecting people to each other.
It's kinda powerful.
Look, we're not asking you to value you us at a billion dollars.
We're not worth a billion dollars, not yet.
Mike, we believe a $40 million valuation is fair.
Can you boys give us the room?
Yeah, yeah.
This was either gonna be the greatest thing ever that brings us all the success
we've dreamed of, or he's gonna come back and tell us, thanks boys,
you're crazy and we're not gonna invest at all.
You may have just blown the entire thing.
What did I just do?
Inches from the goal line, you told the man that we need to keep our company
afloat he lowballed us by a factor of four.
Then what did he do?
He told us to leave our own conference room.
And we did.
You can hit me if you want.
Jesus! I didn't think you'd actually do it.
Yeah, well.
I want to say it was around $40 million.
We bought 51% for 20 million.
Which at the time was the single biggest investment
in Internet history by an individual.
Gentlemen.
Boys.
Okay we are definitely celebrating.
If your stomach can handle it, there's supposed to be a great
new Indian place in the village.
Mr. krizelman, would you please leave Todd's body for a second?
I would like to speak to your son.
First off, my dad would never eat Indian, so.
We just quadrupled the valuation of our company and got $20 million.
So here's how it's going to go.
We're going to cali, we're gonna drink and we're gonna dance and you're going to have
the time of your life.
Alright, alright.
We now had a new partner and it was no longer gonna be the Todd and Steph
show, it was gonna be the Todd and Steph and Mike Egan show.
Patty beron. How dope is she?
Mm-mm-mm.
So, she starts this message board, but then it turns into this whole other thing.
What's the current analog, I don't know, um...
Jezebel. Thrillist, maybe.
I'm talking party reviews, recommendations on where to see the best music and art,
where to find a good cup of coffee in the mission.
Places to volunteer and psychological advice.
Posts about politics and relationships.
Who else was doing that at the time?
I will give you a hint: Nobody.
Nobody was doing that.
Sfgirl was a blog before anybody knew the word meant.
Hey, did you know sfgirl had up to 20 writers at one point?
Don't say that you knew that because I know that you didn't.
We should uh, go.
Mm. We should go.
I never made any money on sfgirl.
It was still hard at that point to sell people on the idea of advertising on a website.
Besides, how much money do you really need when
you're going to parties and eating free food every night?
Y'know?
All that hard work and nothing to show for it
but a few cosmos and some crab puffs.
Whenever you hear stories about a gold rush you always hear about the people that
made a fortune or lost a fortune.
But what about the blacksmiths, hah, in the gold-mining town, hah,
who created a new horseshoe, look, sfgirl was a damn cool horseshoe.
Whew!
Oh, I know these two!
Whassssssup?
Yeah!
Your friend seems awesome.
I don't know who that is.
I've never seen that guy in my entire life.
We're actually not based here.
Todd and I started a little company based out of New York.
Hmm.
It's like an online community, connecting people sort of thing.
It's called theglobe.Com.
Theglobe. Com that just got a $20 million in investments?
How did you know about that?
There was a pretty prominent article in the New York times.
We were in the times? I didn't know that.
Todd, did you know that?
Yeah, I'm not part of this.
That's crazy.
Well, it's certainly super cool that you flew all the way from New York to do
a silicon valley victory lap.
We didn't, no, okay, yeah, that's exactly what we're doing.
Steph, check it out.
Wow. Mike's in the vip.
Who are those guys with him?
You should tell your dad to pick you up out front, because this is embarrassing.
He's not my dad.
Enjoy your victory lap.
I think she's really into you.
C'mon, let's go.
Mike had a very clear view that the businesses that we were in that
weren't theglobe that were mostly travel-related,
that if he could combine those assets into theglobe,
we could sell travel, we could sell hotels,
that it would be very valuable.
Once Mike invested in theglobe he would introduce us to a number of other companies
that he was an investor in and intellitravel was one which was
a travel network of 70,000 travel agents.
So how's it work?
People go online and they can book a flight?
-Not online.
-The site's online.
-It advertises travel deals.
- Then you call the travel agents.
- Or email them. Some of them have email.
Guys, here's the idea.
The intellitravel agents could sell subscriptions to theglobe
as part of their travel packages.
-It's a rolex.
Takes a lickin' and keeps on tickin'.
-That's Timex.
- Tequila shots, you hombres want Tequila?
Sure, I could use a drink. Todd?
Definitely.
Mike Egan was still trying to find a way to take his traditional businesses
that are getting disrupted by the Internet and again turn them into dot-coms,
have them plug into theglobe, somehow.
Imagine 70,000 people out there selling theglobe.Com.
70,000 travel agents.
Travel agents are people.
I don't mean any disrespect.
It's just mixing in commerce and the travel industry at this point,
it's just not what we've been building.
Mike, people come to our site, they share their interests,
they connect with people, that's what we do.
Yes.
That's what we built.
Making a start-up sustainable is not easy.
So it's obviously very important for the founder to keep his or her eye on the
ball, on the big vision at all times but at the same time to surround themselves with
leaders, even if it is one other leader who can tap into the zeitgeist,
who can see where the world is going, is going to be key
to their long-term success of the product.
And Mike came along and he seemed to be dazzled by my vision
and my ability to communicate and it in turn dazzled me,
so it was really hard for me to see that this guy,
Mike Egan, who believed in me so much also had issues,
and I could see it was also potentially going to become a problem for me,
if I didn't perform or if I didn't agree with him.
And it's not, you know, middle aged ladies with glasses around their necks asking
people, do you want a side of theglobe. Com with your Alaska cruise?
Whether it's with intellitravel or some other opportunity,
we gotta to find a path toward profitability.
And we can.
We're on that path. It's a matter of...
Just sit down with them, and see if there's any room for cooperation.
There's no obligation.
- Sure. - Okay.
You boys have fun tonight.
We'll talk in the morning.
U, and everyone that has forsaken houses, or brethren,
or sisters or father or mother or wife or children
or lands for my namesake shall receive a hundredfold
and shall inherit everlasting life." Matthew 10, verse 29.
Now, who's ready to become rich beyond their wildest dreams?!
It was obvious to anybody who paid the least bit attention that
bandwidth was going to improve, compression was going to improve,
and more and more video was coming to the net.
How many people understand codecs and encoding and streaming?
It's pretty simple to say, well, we're doing this and we're doing this and we're
doing this and the technology portion of it's difficult enough for even
skilled people to grasp.
And that's exactly why pixelon picked: Streaming.
Alright. Come on up, don't be scared.
I don't want you digging in your wallets without sampling the merchandise.
So advanced equities is a fledgling investment bank in Chicago.
Now, a lot of people prefer captain kirk.
But this captain pee-card, he's a pistol.
They're looking at the success stories and the ipos of all of these other dot-coms
and they're thinking hey, if we can invest and get in on the ground floor of pixelon,
this is the homerun we really need.
Wow, you said it'd load fast, but that was really fast.
Well, what do you know?
Turns out I'm not a liar.
The folks at advanced equities didn't have the capacity to evaluate what the
software was and uh, as far as I know,
that was the uh deepest they dove into whether
or not the technology actually had any substance underneath it.
That's amazing.
Any investor, no matter what the product is, no matter what the service,
know what the hell it is before you write a check.
One of the things that investors always wanna do is they tend to wanna do massive
amount of what's known as due diligence, let's figure out everything we can about these
people that we're investing in.
So, I'm sitting in my car, and it comes to me,
like the angel Gabriel appearing before the virgin Mary.
The biggest acts in all of music, beamed into your home.
Live.
You can stop selling.
We're in. We'll be in touch.
Alright. Look forward to it.
It's not clear that they ever did any kind of background check on him,
find out if he has a criminal record, does he have lawsuits against him.
They don't know really anything about his background.
Somebody who doesn't have a social security card, doesn't have a driver's license,
has been paid cash out of an expense account.
I pled guilty to over 50 fraud-related charges
and was sentenced to 36 years in prison.
Advanced equities was in such a hurry to close the deal that they failed to zero
in on a couple of things that should have been, you know red flags for anybody.
And one would be just the fact that this founder, Michael fenne, didn't exist,
there was no record of him anywhere.
$2,000 suits. You all must be the lawyers.
Lee? How are you?
Come on in, guys. Sit wherever you'd like.
Hi, how are you. Good to see ya.
They agreed to a $28 million private placement.
Accomplishing this was much easier than I ever dreamed.
Moving onto fees.
In the new life I have here, the one I wanted to
so desperately share with you.
Advanced equities will receive 12% commission.
Everyone loves me.
Advanced equities will have warrants to purchase
a million shares of pixelon stock.
In my new business, everyone thinks I'm a genius.
But it turns out the lack of due diligence goes both ways.
So I'm sittin' in my car.
We'll be in touch.
Alright. Look forward to it.
He's a character.
No kidding.
You think he has any idea the goldmine he's sitting on?
No sir, I do not.
Advanced equities will receive a 12% commission.
Why did pixelon do a deal with advanced equities, where they had to pay 12%
commission and give a million warrants?
Because they had to.
Advanced equities will have warrants to purchase
a million shares of pixelon stock.
Advanced equities is a brand new investment bank that's out there,
they don't even have the licenses that arguably are required,
or at least are customary, for somebody that's gonna do a private placement.
In retrospect it's clear that pixelon was playing advanced equities and
advanced equities was playing pixelon.
Why did advance equities give pixelon 10 million-plus dollars?
Because they wanted to do a pump and dump.
They wanted to take pixelon public and pump it and dump it on unsuspecting shareholders
and buyers and make a lot more money.
Out of the fiery furnace, god has given me a new life.
A life I truly deserve.
I still hurt so very much, but I am holding onto god's promise of a real love,
and that is why the tears flow less and less each day, because god loves me.
I'm not changing my tune on aol, Marc.
It's just that the world looks a hell of a lot different than it did a few months back.
Aol's big deal with Microsoft didn't miraculously lift their stock price out of
the toilet, and now they're crawling back to us.
Let them find another lifeline.
Where's our lifeline?
We're going to destroy Microsoft in the enterprise space.
Yeah, we are, absolutely, but we can't just roll over and show 'em our
privates in the browser war.
We're still very comfortably ahead.
We'd be a hell of a lot more comfortable with a little boost from aol.
They're still aol.
And their way of life is still dying.
We don't need them.
We don't.
Programs can run successfully, repeatedly, without incident.
Alright.
So you think you're good.
But at some point a fatal error will cause your program to crash.
Captioned by cotter captioning services.