July 26, 2000 5:05 PM PDT
InfoSpace to buy Go2Net to expand content delivery
InfoSpace will issue 1.82 of its shares for each of Go2Net's 30.67 million shares, a 43 percent premium from Go2Net's closing price today of $60.56. Paul Allen's Vulcan Ventures, which is an investor in Go2Net, has voted in favor of the acquisition.
InfoSpace provides content such as stock quotes, yellow pages and online shopping services to Web sites, cellular phones, pagers and high-speed services. The company in April appointed former Vodafone AirTouch executive Arun Sarin as its CEO. Sarin replaced founder Naveen Jain, whose title changed to chief strategist.
Go2Net was the content piece of Paul Allen's broadband vision. When Vulcan made a $1.65 billion equity investment in RCN, a competitive cable company, Go2Net was tapped to provide content and services for the broadband effort. Executives said at that time that the company is capable of delivering video games on demand though set-top boxes.
Go2Net has been one of the few profitable Internet companies. The company last quarter reported profits of $8.3 million, or 18 cents a share, on revenues of $18.7 million. It oversees an array of Web sites including stock message board Silicon Investor, two small-business services Web sites, an online multiplayer gaming site and MetaCrawler, which groups results from multiple search engines.
InfoSpace will use the acquisition to deliver its content and shopping services through Go2Net's affiliate Web sites. The Go2Net name will no longer be used once the merger is completed.
Jain will remain InfoSpace chairman, and InfoSpace's Sarin will remain chief executive and also become vice chairman. Go2Net CEO Russell Horowitz will become vice chairman and president.
"Combining these companies will create an unparalleled cross-platform infrastructure company. We consider this to be very strategic to our overall vision for the wired world and look forward to a mutually beneficial, long-term relationship," Vulcan's Allen said in a statement.
Morgan Stanley was the financial advisor to InfoSpace on the acquisition, and Merrill Lynch was the financial advisor to Go2Net.
Bloomberg News contributed to this report.