RELATED> GE/NBC latest inet investment
Last week I posted an article where the CEO @ GE stated they would be investing in at least 3 inet companies & "particularly those that were going public & involved in radio"
Well, here's the first
GE's NBC to Invest Additional $25M Cash in Xoom.com
Get Quote, Company Info: GE, XMCM
Reuters
NEW YORK, (June 15) -- General Electric Co., the second-biggest U.S. company by market value, said its NBC broadcast network will invest an additional $25 million in Xoom.com Inc., an online direct-marketing company, potentially increasing NBC's stake in the online venture, NBC Internet.
NBC decided to partner its Internet holdings last month with Xoom and online directory Snap.com, to start NBC Internet, or NBCi, as a separate Internet company. While NBC will own 49 percent of NBCi for now, the new investment could help it increase ownership in the future through convertible debt to become a majority NBCi holder with a 54 percent stake. NBC's infusion brings its investment in Xoom to $55 million at an average price of $57.30 per share.
As U.S. television networks lose viewers to the Internet, GE is trying to marry its NBC brand with the online capabilities of Xoom and Snap, part of GE Chairman John F. Welch Jr.'s drive to increase sales through the Internet. It plans on making NBCi a publicly traded company and hopes to capture the high prices that investors have paid for Internet stocks.
''The deal restructuring enables us to have an increased long-term equity position in NBCi,'' said Tom Rogers, president of NBC Cable and executive vice president of NBC, in a statement.
The transactions are expected to be completed by October. NBCi will be the first publicly traded Internet company integrated with a major broadcaster; its Web site is purported by GE to be the seventh largest Internet site.
Cnet Inc. will have a 13 percent stake, while Xoom will own about 33 percent of NBCi. Snap is owned 60 percent by NBC and 40 percent by Cnet.
The shares of San Francisco-based Xoom.com fell 3 7/8, or 8.2 percent, to 43 5/8 yesterday. GE's shares rose 2 13/32, or 2.4 percent, to 103 3/4 yesterday.
Jun/15/1999 7:26 |
