As reported, CitySearch filed to go public on June 22, but without detailing the size and the proposed price of the offering. The company said it expects to raise $43.8 million from the IPO after expenses, and that it plans to offer 4 million, or 19.2 percent, of the 20.8 million shares to the public.
This gives the directory an implied market value of $270.4 million at the proposed $13-per-share offering price. CitySearch said it will use the proceeds for expansion and for general corporate purposes.
Most are doing well. For example, Broadcast.com's stock more than tripled on the first day of its IPO last Friday, making it one of the most successful initial offerings in years, at least for now. On the other hand, PointCast announced last week that it was pulling its IPO in order to hold discussions about a strategic alliance with potential partners.
One of the latest companies to jump on the Internet IPO bandwagon is HeadHunter.Net, which last week filed for an offering that could raise as much as $37.4 million. Like the majority of Internet start-ups, HeadHunter is unprofitable, losing more than $1 million in the first six months of this year on revenues just over $278,000.
Internet entrepreneur Bill Gross owns 14.1 percent, or 3.5 million shares, of CitySearch, according to the filing. However, his holdings include 590 shares held by Gross's Idealab, to which Gross disclaims beneficial ownership.
CitySearch launched its first city guide in May 1996 and now has a total of 12 in cities such as Los Angeles, New York, San Francisco, Washington, D.C., and Sydney, Australia, among others.
It faces intense competition, however, from the likes of Excite (City.Net), Lycos (Lycos City Guide), and Yahoo (Yahoo Local); software companies such as Microsoft and Netscape; and media companies such as Knight-Ridder and Cox Interactive.
CitySearch was one of the pioneers in offering entertainment listings and other local information online, a factor that may give it a leg up, said Jacob Ryan, portfolio manager at The Internet Fund.
"People tend to be creatures of habit," Ryan explained. "especially on the Internet, because it tends to be difficult to navigate and slow."