Keeping Afloat When Your Partner Goes Under
By Bret A. Fausett
Here's an exercise. Go to the file, or file cabinet, containing the list of companies you've collaborated with over the last few years as you've built your Internet presence. This is your list of vendors, infrastructure providers, joint venture partners, cross-linking arrangements, content providers, and others who work with you to bring your site to the user.
Now, with that rather long list in hand, visit
f---edcompany.com (yes, try it, that family-friendly domain name works, too) where users bet on which companies are destined for the Internet deadpool. Run your list of business partners through the site to see how they score. Ouch!
If you're like most people, you probably found at least one company scoring high on the severity points. And if all your partners came out clean, well, not all of their financials are public yet. Just wait until the next stock market blip or the first disgruntled employee. While the companies on the list may surprise you, the fact that failure is a constant in this industry should not. Most "Internet companies" can count their birthdays on one hand, and many of them are far from profitable in these toddler years.
But while you can screen potential partners and vendors for viability, it's virtually impossible to screen them for extraordinary success. This may sound odd, but successful partners can be at least as problematic as struggling ones.
Take the proposed AOL-Time Warner merger, for example. If your company is a content provider that has a distribution agreement with AOL, are you as happy with that deal now that your business partner could be Time Warner, a long-time competitor? While the AOL-Time Warner mega-merger may be the exception, consolidation among smaller companies—which are no less important to your business—happens every day.
