DENVER, June 9 /PRNewswire/ -- Online System Services, Inc. (Nasdaq: WEBB) today announced an agreement to acquire privately held SkyConnect, Inc. of Louisville, Colorado, in a stock and cash transaction. The firms will leverage their expertise in digital video management and online services to deliver video advertising and programming over the Internet. Closing of the transaction is subject to shareholder approval and other contingencies.
SkyConnect is a rapidly growing provider of digital ad insertion and digital video management applications in the cable industry with installed video servers at nearly 300 cable television headends. Notable customers include Adelphia Communications (Media Partners), InterMedia Partners, Jones Intercable, Marcus Cable, MediaOne, Tele-Communications Inc. (TCI), and Time Warner Cable. Additionally, SkyConnect serves a number of local advertising interconnect services such as AdLink in Los Angeles, and the Bay Area Interconnect in San Francisco.
SkyConnect had sales of more than $11 million for its fiscal year ended March 31, 1998, up more than two and a half times over 1997. The company began fiscal 1999 with a sales backlog in excess of $10 million. SkyConnect is anticipating continued aggressive sales growth.
"The combination of Online System Services and SkyConnect is an ideal strategic fit for our customers and for our industry," said Steve Adams, president and CEO of Online System Services. "SkyConnect's proprietary video content management and delivery capabilities will significantly strengthen our high-speed Internet access and online services product, i2u. Together, we are creating a powerful new product category that will offer video ads and programming, including Video on Demand (VOD) via the Internet through a broadband pipe. It is the most comprehensive solution available to cable and other broadband operators."
"This relationship provides an innovative approach to launching a wide range of broadband solutions," said Michael J. Pohl, who will continue as president and CEO of SkyConnect following the acquisition. "With our combined expertise, we are uniquely positioned to develop program applications specific to broadband."
SkyConnect's proprietary management system and advanced applications provide cable television operators with a highly reliable way to schedule, store, deliver and playback video content. The company's comprehensive solutions enable operators to optimize advertising revenue by providing advertisers with quick copy changes at the local level and delivering high ad run completion rates. Integrated with i2u, SkyConnect's technology will allow for the delivery of full-stream digital video over the Web, giving broadband operators the ability to stream advertising as well as regular programming to home PCs and business networks.
About Online System Services
Denver-based Online System Services develops and markets i2u, a full- service Internet solution that allows broadband operators to provide high- speed Internet access and Web services, producing new revenue streams from their existing infrastructure and customer base. Online System Services is a Solution Provider and Level 3 Site Builder with Microsoft Corporation (Nasdaq: MSFT). The Company's clients include TINTA, TCI's international group; InterMedia Partners; American Telecasting, Inc.; RE/MAX International; and Rockwell Federal Credit Union. Online System Services' corporate Web site is at ossinc.net.
About SkyConnect
Through its affiliation with Oracle (Nasdaq: ORCL) and its preferred alliance partner status with Digital Equipment Corporation (NYSE: DEC), SkyConnect offers the most advanced and complete digital advertising solutions in the industry. The company has earned a reputation with key industry players for its state-of-the-art hardware and software technology (including traffic and billing and pay per view management), practical expert consultation, unique custom applications, timely and reliable customer support, and competitive pricing. More information may be found at SkyConnect's Web site at skyconnect.com.
Information and statements in this report, other than historical information, should be considered forward looking and reflect management's current views of future events and financial performance that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include, but are not limited to, the following: the possibility that proposed acquisitions may not occur; general economic conditions and developments within the Internet and intranet industries; product development and technology changes; competition and pricing pressures; length of the sales cycle; variability of sale order flow; and management growth.
SOURCE Online System Services, Inc.
CO: Online System Services, Inc.; SkyConnect, Inc.
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