May 15, 1998 3:30 PM PDT
CitySearch, Zip2 call off merger
An official announcement is expected later today.
"Zip2 and CitySearch today announced that the two companies have mutually agreed not to pursue their planned merger," the companies said in a statement. "Citing differences in their technologies, product strategies, and business models discovered in the course of planning the integration, both parties recognized that the merger would not be in the best interests of either company."
The statement went on to say: "The two companies may explore options to work collaboratively on appropriate projects in the future. However, each company independently concluded that their long-term objectives and those of their partners were better served by pursuing alternative growth strategies."
As reported on April 3, Zip2 and CitySearch said they would merge in a deal valued at more than $300 million.
The new company was to be called CitySearch, serving 175 cities in its network, including the top 27 U.S. cities. It was to employ about 700 people. CitySearch and Zip2 are privately held.