A Tangled Web of the Old and the New Economy
Franklin, H. Bruce. 2007. The Most Important Fish in the Sea (Washington, DC: Island Press) tells the gruesome tale of the depredation of world’s supply of menhaden, a fish that represents the basic feedstock for the carnivorous fish and which keep the overgrowth of algae in check. A single corporation, Omega, owned by Malcolm Glazer is the chief destroyer. Omega got the business from Zapata Oil, a company founded by Bush the First back in 1953. By 1961, Bush sold his stake in the company. By 1998, Zapata became one of the most ridiculous examples of the excess of the dot.com world.
Ofek, Eli and Matthew Richardson. 2002. “The Valuation and Market Rationality of Internet Stock Prices.” Oxford Review of Economic Policy, 18: 3 (Autumn): pp. 265-87.
275: “As an example, consider our favourite illustration of Zapata corporation. Zapala was founded in 1953 by former US President George Bush as an oil and gas company. However, by early 1998, Zapata had transformed itself into a company, albeit still ‘old economy’, specializing in meat-casings and fish oil. On 27 April 1998, Zapata’s management announced that it was going to form a new company to acquire and consolidate Internet and e-commerce businesses. Its first foray into this sector occurred in May when it bid for Excite, which was the second largest Internet search directory at the time. Zapata’s bid was rejected by Excite’s management for its ‘complete lack of synergy’, as quoted in Bloomberg at the time, covering Excite’s press release. In July, Zapata made further announcements that it was purchasing about 30 Internet websites. As the market for Internet stocks deteriorated through summer and autumn of 1998, Zapata announced that it was re-evaluating its Internet business strategy and no longer purchasing the websites. On 23 December 1998 the company reversed course again. And stated that it was getting back into the internet business and would be forming the subsidiary, Zap.com. On this news, shares rose 98 per cent in New York stock-exchange composite trading. This type of example is not atypical and is representative of the Cooper et al. (2001) study.” Cooper, Michael, Orlin Dimitrov, and P. Raghavendra Rau. 2001. “A Rose.com by Any Other Name.” Journal of Finance, Journal of Finance, 56: 6 (June): pp. 2371-88.
[On 8 October 2007, Reuters reported, “Zap.Com is a public shell company that does not have any existing business operations. From time to time, Zap.Com considers acquisitions that would result in it becoming an operating company. Zap.Com may also consider developing a new business suitable for its situation.