June 8, 1998 9:40 AM PDT
AOL acquires instant message firm
Mirabilis makes ICQ technology, which informs Internet users when family, friends, and colleagues are online and enables them to exchange messages in real time. ICQ also allows users to play games and exchange files.
As expected, AOL paid $287 million in cash to purchase 100 percent of Mirabilis' assets. Starting in its fiscal year 2001, AOL also will make contingent payments based on growth and performance levels. A large part of AOL's investment into the company is expected to go to in-process research and development during AOL's fourth quarter ending June 30, 1998.
AOL will use Mirabilis' flagship product ICQ Instant Communications and chat technology to boost its online services.
Mirabilis will continue to be based in Tel Aviv, Israel, and operated by its founding team as a free Web-based service with its own brand identity. AOL will continue to develop the ICQ technology to improve the service and better its revenue-providing capabilities, the company said.
"Acquiring ICQ fits perfectly into our multiple-brand strategy," AOL chief operating officer Bob Pittman said in a statement. "Like CompuServe, ICQ substantially broadens our reach in important markets not served by AOL-branded products. In addition to its international reach, ICQ has tremendous appeal among young, technically sophisticated Web users and there is remarkably little overlap with AOL."
The company also said the acquisition will help boost its international momentum, especially in Europe. Approximately 60 percent of ICQ's user base is based outside the United States and nearly 40 percent is based in Europe.