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To: Spartex who wrote (13323)	1/16/1998 9:43:00 AM
From: Glenn D. Rudolph	Respond to of 45548

FOCUS-Excite shares soar on aquisition of MatchLogic Reuters Story - January 15, 1998 22:32 %US %RESF %PUB %TEL %LEI %BUS %MRG XCIT YHOO GM INTC T PG V%REUTER P%RTR By Samuel Perry PALO ALTO, Calif., Jan 15 (Reuters) - Excite Inc. stock hit a record high Thursday after the Internet media company announced the acquisition of MatchLogic, a privately held advertising management and database marketing firm, in an all-stock deal whose value soared to more than $122 million. Excite Chief Executive Officer George Bell told Reuters before a presentation to a Cowen & Co. investment conference near Palm Springs, Calif., that Excite expects the acquisition to contribute $22 million toward Excite's 1998 revenues. Bell said 40 percent of that business had already been booked, and the acquisition will help Excite benefit from a shift in Internet advertising from more generic brand awareness ads to highly targeted direct marketing. "The shift in the value on the Web will be dramatically toward transactions and direct marketing," he said. "The Web offers accountability and tracking for advertisers, and if you fail to deliver it, you might as well just be in the business of delivering large amounts of impressions like network TV. "The ultimate winners in that shift will be those who control the best data around names, and demographic data regarding user behavior on the Web," he added. Excite stock gained $4 to $37.50 on the Nasdaq market after setting a new intraday high of $38.75. "The most obvious thing about this deal is that it has a lot of revenues," said Keith Benjamin, an analyst at Robertson Stephens & Co. "This is now a real media business." MatchLogic's revenues will be a boost for Excite, which for the first nine months of 1997 reported a net loss of $22.4 million on revenue of $31.4 million, compared with losses of $30.4 million on revenues of $8.2 million a year earlier. The jump in Excite stock, which analysts said also reflected greater investor confidence in the Internet media and commerce sector following solid results reported late Wednesday by industry leader Yahoo! Inc., helped boost the valuation of the all-stock acquisition. Excite Chief Financial Officer Robert Hood said MatchLogic shareholders will receive 3.226 million Excite shares, based on a price at the time valuation was negotiated of $27.50 a share for Excite stock, or $89 million. But Excite shares have soared nearly 90 percent off their most recent low two months ago, and the Thursday intraday high lifted MatchLogic's value to more than $122 million. That valuation was roughly a 2000 percent return for the intial entrepreneurs who founded MatchLogic only 15 months ago, and nearly a 900 percent gain in less than nine months for the venture funds that invested $9 million in April 1997. "We're really thrilled about this Excite thing," MatchLogic Chief Executive Officer Pete Estler said in an interview from the company's headquarters in Louisville, Colo. "It's an acceleration play for us," said Estler, who said MatchLogic had been about to close a $20 million investment round when Excite approached it about a potential buyout. Estler said that while MatchLogic and its 100 employees will be operated as an independent unit of Excite, keeping an arms-length distance, it will be able to glean valuable data about Internet user behavior from its new owner. MatchLogic has already signed longer-term advertising deals with blue chip customers, including General Motors Corp., Intel Corp., ATT Corp. and Procter & Gamble Co., as well as with major ad agencies. "The Internet is by far the best direct-response vehicle we have ever seen, so it's going to dominate," Estler said, adding the ability to track behavior of individual Internet users enables advertisers to judge return on their promotional investments. Estler said this allows advertisers to deliver "the right marketing message to the right person at the right time." About half of MatchLogic's revenue comes from ad campaign management and half coming from direct, database marketing. Bell said the acquisition would not slow Excite's profitability timetable, and that the company still expects to break even in the third quarter of this year. (--sam.perryreuters.com, in Palo Alto, +650 846 5400)