IS INSP A PARTNER IN DIGEO? (Part One)
That's just ONE question many of us previous Go2Net (GNET) shareholders have been asking not only ourselves, but anyone who may have ANY information, since the "merger" announcement with INSP on 7/26/2000.
***WARNING...there's lots of "historic" STUFF in this post. And the author HIGHLY recommends those of you interested at all in the subject mater, to make yourself a "printed" version (be sure your paper tray in full <g>), and peruse it at your leisure, during a more convenient time...like maybe either during a long Hawaiian vacation, or perhaps (for some of us now) while having an overly extended experience way out in your outhouse, appreciating the simple things in life. <g> I had a few extra hours to spare this weekend, and compiled this information as a little background DD record just for myself. Then I thought..what the h*ll, perhaps a couple of other INSP and former GNET shareholders might be interested in it, so decided to post it on this thread. For those you NOT interested in DIGEO Broadband, I suggest you immediately go to the next post...And DO NOT PRESS THE "Next 10 Posts" button. If you accidentally do, you'll know what I mean. <g>
Anyway, let's begin this (unfinished) little story........
To my knowledge, there hasn't been a single published mention of DIGEO Broadband (previously named the "Broadband Partners") by ANYONE associated with either InfoSpace or Go2Net, since their proposed "merger" was announced to the World on July 26, 2000 ("officially" approved 2 1/2 months later, at dual "special" shareholder's meetings on October 12, 2000).
Many of those of you who were investors in GNET way back in 1999, may have been wondering what ever happened to "The Next Big Thing" for Go2Net, which was projected by some to change the world forever. You "longs" and Go2Netrillionaires at that time will well remember all the incredible publicity (some might suggest "extreme hype" would not an inappropriate term) that surrounded the multiple press releases and articles at that time, which started in early October of 1999...and continued in the days, weeks, and months that followed. More than a few long-term "investors" in GNET stuck with their stock (even after its being swallowed up in the infamous "merger" with INSP), for over SEVENTEEN LONG MONTHS AGO now (almost 1 1/2 years), believing that the highly publicized "Broadband Partners" relationship with Paul Allen's "Wired World" vision would turn out much better than just "okay"...and much sooner rather than MUCH later.
On October 4, 1999 it was simultaneously announced that Paul Allen had not only invested $1.65 billion into RCN (a provider of telephone and Internet service through fiber-optic cable), but it was also announced the same day that he had formed an unbelievable partnership, which some speculated might change the entire world as we know it...the "broadband" merging of the TV with the PC. A truly revolutionary and historic thing, which had never been done before. This broadband partnership was announced just over one month before the fanfare surrounding Charter Communications huge $3.2 billion IPO (on 11/9/99), however, according to GNET's 1999 Annual Report (pg. 5), the joint venture was actually "entered into a agreement in principal" on 10/1/1999.
It has been reported in the past, that way back to at least as far as 1992, Paul Allen has had a dream of "merging" the television with the computer, which has now come to be called "Interactive TV." I know many of you just go completely blank, with all the big numbers being thrown around by almost every future "projection" these days. But "Interactive TV" has been projected by the Gartner Group to grow to 17 million users in three short years, by 2004 (from almost nothing at the present time). And Juniper Communications predicts even larger numbers, stating it will be a $10 billion market by 2004, serving some 30 million households. Heck. a billion here, a billion there...and pretty soon we're talking about some really REALLY big (potential) bucks...by say 2010 or so.
According to the press releases and articles at the time, this broadband partnership was to include the following companies: Vulcan Ventures (100% privately owned by Paul Allen), Charter Communications (CHTR), Go2Net (GNET), High Speed Access Corp. (HSAC), and RCN Corp. (RCNC). It was to be called the "Broadband Partners."
Vulcan Ventures (and thus Paul) controlled the whole thing, as his VV was the majority partner. And that VV "majority" didn't even include his very large shareholder positions in the other four publicly-traded companies announced to be in the partnership; which included his owning about 59.9% of CHTR's shares (and 93.7% of "voting rights," even after the 11/9 IPO), about 30.2% of GNET's shares (after failing to acquire 52% controlling interest earlier in the year), about 27.4% of RCNC (after his 10/9 investment), and about 37.4% of the HSAC shares.
Regarding the "pre-INSP/GNET" merger, the information I've been able to find indicates that the "ownership" percentages of the DIGEO Broadband partners broke down as follows"
1. Vulcan Ventures (VV)...52.2% (100% owned by Paul Allen)
2. Charter Communications...24.9% (VV owns 59.9% of CHTR)
3. Go2Net (now INSP ?)...19.9% (VV owned 30.2% of GNET = 7.9% of INSP)
4. HSAC & RCNC...about 3%? combined (never saw it published)
According to the GNET 1999 Annual Report (pg. 6), the Broadband Partners (now DIGEO) joint venture has an initial 25-year term, subject to successive five-year renewals by mutual consent. In addition, Charter Communications agreed to use Broadband Partners portal services exclusively for an initial six-year period that will begin when the portal services are launched, subject to certain exceptions.
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RECENT "DIGEO BROADBAND" INFORMATION:
I've been in direct contact by telephone with DIGEO, CHTR, and INSP in recent weeks. All I've been able to learn directly from company representatives to date is the following:
VULCAN VENTURES
(I haven't personally talked to either Paul Allen or VV's President Bill Savoy, since the first CHTR shareholders meeting on 6/7/00, although I plan to do so at the next one on 6/6/2001)
paulallen.com
DIGEO BROADBAND, INC.
digeo.com
I've recently talked to Bill Maier,
Senior Marketing Dept. Director
(Phone: 425-825-4400).
Another contact listed on their Website:
Rhonda Hamilton: (Phone: 425-825-04438)
One of the first questions I was asked was, "Who are you"! I was going to pull rank, and answer "I'm the world-famous Levy (or KLP, SI Sy, Sarkie, LRNLATN, Carolyn, or Puna)...but I just answered, "I'm a shareholder in two of Digeo's partners, CHTR and INSP, having previously been a shareholder of GNET." His next statement was something like "Well, Digeo is a private company (because of 52.2% "majority" ownership by Paul Allen's privately held Vulcan Ventures, even though their other "partners" are publicly traded companies), so I can't publicly release any information about the company." We did have a pleasant little brief chat, and he turned out to be a friendly guy. About all I could glean during the conversation was that Digeo is developing services for not only CHTR (and RCNC I believe), but other cable/broadband companies as well. I didn't know that before. To put it in simple terms, what they are doing, is developing for "Interactive TV." He wouldn't confirm (or deny) ANY relationship with INSP, but suggested I contact the company directly. Oh, and as a footnote, I asked him if "DIGEO" stood for DIG=Digital, and GEO=World, as Pareto suggested (post#19207 on this thread). He answered, "Well yes, but the "EO" part could also stand for VidEO." And BTW, it is NOT spelled "Diego," (as in San Diego), like some have misspelled the name.
CHARTER COMMUNICATIONS, INC. (CHTR)
chartercom.com
I talked to Mary Jo Moehle, of Investor Relations
(Phone: 314-965-0555,
Email: mmoehle@chartercom.com)
She was the most open and friendly of any "company officials" I talked to regarding Digeo. After we had some initial friendly banter (I always try to do that, before I go in for the "kill") about CHTR, I bluntly asked something like, "Is InfoSpace, which merged with Go2Net last year, still one of the partners with you in the DIGEO partnership"? Her first response was, "InfoSpace...they're not really involved anymore." I was definitely very shocked to here her utter those words. However, while we continued to talk, she said she had just found Charter's most recent SEC filing regarding DIGEO Broadband, and it lists just three partners, Vulcan Ventures, CHTR...and (low-and-behold) INSP (no mention of RCNC or HSAC). I have not yet been able to find such a SEC filing. Perhaps someone else can find it for us. She didn't seem to be the least bit reluctant to talk about either Digeo, or discussing Charter's interactive-TV plans. She did say that CHTR is in fact currently "alpha" testing their new interactive-TV service in the St. Louis area (their headquarters), using selected employees. When I asked when the public roll-out (the "Porsche" version, not a "Volkswagen" version) would finally occur. She said their current plans are for the FULL ("Porsche" version) roll-out sometime later this year in the St. Louis area, with others (like Los Angeles) to follow. When I asked her why hadn't the roll-out happened last year, as everyone (VV, CHTR, and GNET) had projected in 1999, to originally occur in the Summer of 2000, then Fall...and then the Winter of 2000..and then early in 2001. Her answer was something like, "The roll-out delay of our interactive-TV services was primarily caused by not having the "middle-ware" ready for launch...which she said is being supplied by both Microsoft and Liberate." She said that the "middle-ware" connects the servers to the TV set-top boxes, allowing them both to "talk" to each other. She also told me that the next shareholder's meeting for Charter Communications will be June 6, 2001, and will be held in the Seattle area (because of Paul Allen, no doubt).
INFOSPACE, INC. (INSP)
infospace.com
I talked to Nicole Knowles, of Investor Relations
(Phone: 425-201-6100,
Email: investor_relations@infospace.com)
She has always returned my phone calls the same day that I left a message, although I've always had to leave a message on her voice-mail, as she's never yet answered her phone directly. Also, she's always been helpful and courteous, answering all my questions that she could, or that she was "allowed" to by the company.
When I recently asked her something like, "Is InfoSpace a partner with Digeo Broadband, after the merger with Go2Net, which had supposedly been developing the broadband Web portal for Digeo's interactive-TV, originally to be launched last year"? Her response was something like, "I can't comment on that. It would be considered inside information." Regarding Infospace's current broadband interactive-TV relationships, she went on to say, "All I can confirm is what has already been announced by Infospace, that we have relationships with Liberate TV, OpenTV, Altel, and MSFT TV." She could not even confirm (or deny) whether INSP had ANY relationship with Digeo whatsoever. I found this VERY strange! She said the shareholders will just have to wait until some future publicly announced press release, and/or SEC filing. At the end of the conversation, I did try to stress to her that many INSP shareholders (especially those who had previously owned GNET) would like to know what, if any, relationship INSP has with Digeo, and would she please pass that concern on to upper management. She ended with, "I will."
As a side note, INSP management has previously been quoted in at least one published article as saying that it is actively involved in FOUR BROADBAND AREAS: Broadband "Wired" (DSL & Cable), and Broadband "Wireless" (2.5G & 3G). DIGEO would initially fall into the broadband "wired cable" category of those four, with one of their (supposed) "CO-partner" being Paul Allen's Charter Communications (CHTR)...which (as mentioned above) is due to roll-out their "interactive-TV" broadband services sometime later this year
My Comments:
Heck, it sure didn't seem to be "inside information," back in 1999 and 2000, when the highest management levels at Vulcan Ventures, GNET, CHTR, as well as RCNC made a really big deal about their "Broadband Partners" joint venture, in numerous press releases, newspaper & magazine interviews, and their Annual Reports. The "partnership" was announced by GNET (in their 1999 Annual Report, pg. 6), to last for a minimum "initial 25-year term" (see full quotation later in this epistle). And it sure didn't seem to be "inside information" to the Investor Relations representative I talked to at CHTR, as they already have filed it in a report to the SEC. So, why the BIG SECRET with INSP? I just don't get it. Did something (a little "spill") happen "between the cup (merger "announcement") and the lip" (actual "merger" and/or "management shake-up")? Inquiring minds (and many shareholders) want to know the TRUTH, the whole truth, and NOTHING but the truth! |
