July 20, 1999 11:50 AM PDT
Yahoo completes Broadcast.com acquisition
Broadcast.com's content and services will be integrated during the third quarter of 1999.
The acquisition, first announced in April, will create an independent Yahoo Broadcast Services unit, allowing corporate customers to take advantage of Webcasting services and allowing advertisers and merchants to incorporate video and audio in their marketing.
With about 18 million U.S. home personal computers accessing audio and video, according to Media Metrix data, and the promised arrival of broadband Internet access via cable and digital subscriber line (DSL) services, Yahoo Broadcast is poised to take advantage of the booming use of multimedia on the Web.
"We successfully completed the Broadcast.com acquisition ahead of schedule and are moving swiftly to integrate the company's audio and video programming, business services, and advertising programs into Yahoo," Yahoo president Jeff Mallett said. "We plan to deliver an even richer Web experience to our users worldwide as well as expanded business services, marketing, and distribution opportunities for our respective clients."
While the Broadcast.com site will remain the central aggregation site where users can access an array of audio and video programming on the Web, the service also will be available throughout Yahoo's global network, which serves about 80 million unique users per month, the company said.
Audio and video features will be integrated into Yahoo's vertical areas, including Yahoo news, finance, auctions, and shopping.
The company will broadcast programming from 420 radio stations and networks, 56 TV stations and cable networks, and game broadcasts and other programming for more than 450 college and professional sports teams.
Yahoo also will also provide a selection of programming including business events, full-length CDs, and audio books, the firm said.
Advertising is likely to dramatically change on Yahoo, with advertisers and merchants beginning to promote their businesses and products through multidimensional audio and video advertising and programming, Yahoo said.
"Adding a broadcast layer may accelerate the movement of advertisers who are traditionally broadcast-based to come over to the Web, where they have been hesitant to come," Mallett said. "The advertisers and merchants who are image-makers are hoping this is a vehicle that will help create emotion" similar to advertising on television that entices consumers to open their wallets.
The acquisition is being accounted for as a pooling of interests. Yahoo will exchange approximately 28.6 million shares of Yahoo common stock for about 37.1 million shares of Broadcast.com common stock, the company said. Yahoo also will convert about 6.6 million Broadcast.com options into about 5.1 million Yahoo stock options. The company expects to have a one-time charge of about $22 million in the third quarter of 1999 related to the acquisition.
In the wake of Yahoo's acquisition of GeoCities, more than half of GeoCities' 300 employees were given pink slips. Mallett said that in the case of Broadcast.com's integration with Yahoo, there are jobs available.
"This acquisition is a little different than the others, where there was an overlap in talent as well as services," Mallett said. "[Broadcast.com] is a pure-play growth acquisition rather than an integration of services."
Caught in the market's downward movement today, Yahoo dipped 1.96 percent, or 2.94 points, to 146.46. The stock has traded as high as 244 and as low as 29.5 during the past 52 weeks.