InfoSpace Plans to Buy Go2Net in Stock Deal
InfoSpace Inc., which syndicates content to Internet portals and wireless companies, said Wednesday that it agreed to buy Go2Net Inc. for about $4 billion in stock, giving InfoSpace technology to process online payments and deliver interactive games.
Four-year-old InfoSpace already provides national yellow and white pages directories, maps, classified ads, live music event and TV listings, news and stock quotes.
With Go2Net, InfoSpace adds the ability to deliver interactive games over cable and DSL modems, as well as search services and financial information. Microsoft co-founder Paul Allen owns 30% of Go2Net.
Executives of both companies said that the combined companies will enable customers to deliver soup-to-nuts technology and services to provide news and information over the Internet to both wired and wireless devices and will eventually enable a consumer to purchase a garment over the Internet seen on a television show from his sofa. They said the deal would add to earnings “from Day One.”
“By integrating these two companies, InfoSpace will be uniquely positioned to speed the development of the interactive medium from wireless to DSL to broadband--and the growth of all our businesses,” said Naveen Jain, InfoSpace’s chairman and co-founder, who is a veteran of Microsoft Corp.’s online services unit.
Bellevue, Wash.-based InfoSpace said that under the deal, which is expected to close in the fourth quarter, it will issue 1.82 of its shares for each Go2Net share. As of July 17, when it reported third-quarter earnings, Seattle-based Go2Net had 46.2 million shares outstanding.
The deal values Go2Net at $86.91 a share, a 43% premium to Go2Net’s closing price Wednesday of $60.56 on Nasdaq, where it fell $1.56. InfoSpace stock rose $1.44 to close at $47.75 on Nasdaq.
Go2Net runs a stable of Web sites including 100Hot, a Web-site-ranking service; Authorize.Net, a payment-processing service; Dogpile, search services; Haggle Online, online auctions; and PlaySite, multi-player games, among others.
The company has been touting the technology behind these sites and selling those services to customers. Go2Net says that the majority of its sales comes from licensing and transaction-based commerce.
