Gateway Inc. (NYSE: GTW) announced on Thursday its $200 million investment in CMGi Inc. (Nasdaq: CMGI), an investment firm that owns pieces of Lycos Inc. (Nasdaq: LCOS) and GeoCities (Nasdaq: GCTY), among others.
Shares of Gateway rose 5/8 to 68 13/16 and CMGi gained 6 15/16 to 246 11/16 in morning trading.
Gateway gets a new avenue to sell its PCs and enhances its plan to become a PC "solutions" company by integrating products and services within CMGi's network of Internet companies. The two will also treat each other as a "preferred vendor."
"Gateway and CMGI share a common vision of the future of the Internet," said Gateway chief Ted Waitt in a release. "It's about providing strong content, building relationships and a sense of community with our clients and using the Internet as a powerful vehicle for marketing products and services."
CMGI has a breadth of Internet companies in its stable of investments. Among CMGi's investment is Activerse that sells Ding!, an online instant messaging software, AdSmart, an online advertising rep, Engage Technologies that maintains an online ad server similar to AdForce Inc. (Nasdaq: ADFC), Planet Direct, a Web portal and NaviSite Inc., a Web hosting service like Exodus Communications Inc. (Nasdaq: EXDS).
"The new gateway.com site, our gateway.netSM Internet access service, SpotShop.comSM online sales, and now our alliance with CMGI, all serve to solidify our position as a major Internet player," added Waitt.
In related news, Lycos said today that it signed e-commerce agreements worth $200 million during the third fiscal quarter. The company, which will report results for the quarter on May 18, said it expects to announce earnings in line with analysts' expectations. A survey of analysts by First Call predicted a loss of around three cents per share.