Yahoo Buying $5 Million in GeoCities Stock

Santa Monica-based Internet service provider GeoCities said that Yahoo Inc. will purchase $5 million in GeoCities stock as part of a deal that will integrate their services. Santa Clara-based search engine Yahoo would give its registered members the option of using GeoCities’ publishing tools to build a Web site in one of GeoCities’ 40 themed communities. GeoCities in turn would provide links to Yahoo content. For example, GeoCities’ “homesteaders” in the sports community would be able to get sports-related information from Yahoo. This service fits with GeoCities’ efforts to provide theme-related retail offerings in each of its communities, said David Bohnett, GeoCities’ founder and chief executive. According to the agreement, GeoCities’ 1.3 million customers will be able to sign up for Yahoo services including chat, e-mail, message boards, financial portfolios and classifieds. Both Yahoo and GeoCities services are available on the Internet for free. GeoCities also announced that Softbank Holdings Inc., the U.S. unit of Japan’s Softbank Inc., will invest $25 million in GeoCities while reducing its stake in Yahoo. Yahoo shares fell $3.31 to close at $62.94 on Nasdaq.