CMGI said it plans to exploit its growing network of Internet companies, which is comprised of business-to-business and business-to-consumer e-commerce companies, to drive traffic to uBid and to help the auction site compete more effectively. Once the acquisition is completed, CMGI will help uBid.com develop links to other CMGI-owned properties, including Net search service MyWay.com, online entertainment site iCast and email marketer Yesmail.
at a glance
HQ: Andover, Mass.
CEO: David Wetherell
Annual sales: $175.67 million
Annual income: $476.24 million
Source: Bloomberg 2/10/2000
Shares of uBid surged $2.88, or more than 10 percent, to $29.56 in early afternoon trading. CMGI stock dipped $4.63, or more than 3 percent, to $115.88.
"We are excited to be part of the CMGI network and see tremendous opportunities not only in the business-to-consumer area, but also in the business-to-business area as we continue to leverage these companies," said Greg Jones, uBid.com's chief executive during a teleconference this morning.
"Our business continues to grow substantially--this is more like a turbo boost to us."
While CMGI hopes to guide uBid.com toward a stronger business-to-business presence, it also said it will help bolster the business-to-consumer side of uBid.com's efforts. The move will allow CMGI to distribute the inventory of many of its e-commerce players through uBid.com while integrating the company's auction and merchandising skills into the enterprise arena currently exploited by its B2B companies.
"The acquisition of uBid really fills out another hole that was within the CMGI family, which was in the auction area," said David Andonian, CMGI's president of corporate development.
Business-to-business companies now make up nearly 50 percent of CMGI's portfolio, and recently the company created CMGI Solutions to help bring to the Web mid-sized and large companies on the Fortune Global 2000 list.
Andonian said these global 2000 companies will want to offer their customers auction capabilities.
Today's acquisition opens the door for CMGI to bring auctions to Asia, where several online auctioneers, including eBay and Amazon.com, have recently planted their flags.
"We do have someone on the ground in Europe and did plan to move in Asia," CMGI's Jones said. "I think our expansion plans have now moved up again as we continue to be able to roll out the auction platform and use the technology through out Europe and Asia."
The terms of the agreement call for CMGI to issue .2628 CMGI shares for every share of uBid.com held on the closing date of the transaction, which is expected to be sometime in May. The deal is subject to regulatory and formal approval by uBid.com's shareholders.
"We believe there's tremendous opportunity in applying these techniques to CMGI's existing e-commerce companies, and in building aggressively to extend these technologies into the emerging B2B marketplace through licensing and other channels," said David Wetherell, CMGI's chief executive in a statement.
uBid currently focuses on business-to-consumer auctions, allowing consumers to bid for products from suppliers such as Sony, IBM and Harmon Kardon. A fraction of uBid.com's business also caters to small businesses, and the industrial and construction business marketplace at Ironmall.com.
uBid was founded in April of 1997 by Creative Computers, a PC distributor, to help sell excess and refurbished inventory. Ubid began trading on the Nasdaq exchange through an initial public offering in December 1998.