American Greetings said Thursday that it has acquired Blue
Mountain Arts, the struggling online greeting division of Excite@Home, for
$35 million in cash.
American Greetings will combine Blue Mountain with its own online card
service, AmericanGreetings.com. American Greetings, which also owns
Egreetings Network and BeatGreets, has combined its assets to become an
online card heavyweight.
The deal closes the troubled
history of Blue Mountain and its struggling parent company. Blue
Mountain was purchased by Excite@Home for
$780 million in cash and stock
during the height of the dot-com boom.
Excite@Home acquired Blue Mountain for its high volume of traffic at a time
when it ranked among the Top 10 most-visited Web sites, according to
Jupiter Media Metrix. Executives attempted to use Blue Mountain's traffic
to boost subscriptions to its cable ISP service.
But since the crash of Internet stocks, the value of Blue Mountain and
Excite@Home's other Web media assets have depreciated dramatically, leaving
the troubled company with few options but to sell the division.
In January, Excite@Home wrote
off $4.6 billion in goodwill because of the depreciation of value for
Blue Mountain and its Excite.com Web portal. That means the two largest
acquisitions for @Home had dramatically declined in value since being
acquired. Excite was acquired by
@Home in 1999 for $7.2 billion.
Nevertheless, American Greetings expects the acquisition will not derail
its online division's plan to reach profitability in the fourth quarter
this year. The company added that it expects the acquisition to heighten
revenues for online advertising, business-to-business marketing,
paid content and e-commerce.
Furthermore, Excite@Home will buy about $3 million in advertising on
American Greetings' Web sites for the next three years to promote Excite.
Blue Mountain will continue to provide online greeting cards on Excite for
the same period.
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