Yahoo-GeoCities: Bigger Is Better

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Ho hum, another massive merger in the Internet biz. Last week At Home picked up Excite; today Yahoo throws free home page service GeoCities into its shopping basket. The latest deal makes Yahoo much bigger, second only in reach to the mighty America Online. Quite a feat if you consider that no one's browser comes preloaded with a Yahoo home page. And what a validation for GeoCities, a company that seemed absurd as recently as last year -- will anyone ever make money on free web sites?

All that matters is the audience size. Maybe you remember how silly AOL seemed sending out all those free disks for years and years. Now, according to the latest tally released yesterday afternoon, the dial-up king has 17 million customers. Key is the value of users, not at this point in the game for how much they'll give you but for how much some other web contender will pay to include your users in their "network." (Watch for Yahoo to start calling itself just that, now that GeoCities gives it a big property with a completely different brand.)