Yahoo! buys GeoCities
NOTE THE INDUSTRY CONSOLIDATION. EVENTUALLY YOU WOULD THINK SOMEONE WOULD BE INTERESTED IN VERTICALLY INTEGRATING BY CAPTURING THE WIRELESS TECHNOLOGY AND ISP ASPECT OF USRF. THE BIG PORTAL COULD THEN ADVERTISE LIKE CRAZY TO THE LOCAL MARKETS IN THE CYBERHIGHWAY CHAIN. JUST THINKING OUT LOUD HERE.
Internet portal to buy Web community as industry consolidation continues
January 28, 1999: 8:22 a.m. ET
Market research on GeoCities Market research on Yahoo Geocities, Be Free ink deal- Jan. 13, 1999 GeoCities Yahoo Yahoo GeoCities
NEW YORK (CNNfn) - Internet search engine Yahoo! Inc. confirmed Thursday it will buy GeoCities, a fast-growing Web site community, in a deal that will further solidify Yahoo!'s position as a frontrunner in the online popularity contest.
Under terms of the deal, GeoCities shareholders will receive 0.3384 share of Yahoo! for each share of GeoCities they own. With GeoCities having 31.4 million shares outstanding, and Yahoo!'s Wednesday closing stock price of $335.875, the transaction has a value of $3.57 billion.
GeoCities, whose stock price has soared in recent months, has a market capitalization of $2.30 billion, meaning Yahoo! would pay a hefty premium for the company. But that's not unusual in this Internet frenzy -- @Home, for example, agreed last week to pay a 40 percent premium for Excite (XCIT).
GeoCities (GCTY) is the third most visited site on the Web behind AOL and Yahoo!, with 19 million unique visitors in December, according to Web research company Media Metrix.
GeoCities sets up communities of people who share similar interests and allows customers to create their own home page on the Internet.
Yahoo!, the second most popular site, has 28 million visitors according to Media Metrix. A deal would likely propel Yahoo! to the top rated site in terms of traffic, but it's not clear how much the two sites' individual audience overlap.
Analysts say Yahoo!, like its competitors, is scrambling to maintain its dominance in the portal business.
The company already faces stiff competition Excite, AltaVista and Infoseek Corp. (SEEK), the search engine turned Web portal that teamed with Walt Disney Co. (DIS) to launch GO Network.
And in November, America Online Inc. (AOL) announced a $4.2 billion acquisition of Netscape Communications Inc. (NSCP) America Online Inc.
Analysts expect more industry consolidation in the Web portal market, particularly with Internet companies hooking up with traditional media companies.
Analysts say the potential acquisition of GeoCities, or a compÿ |
