The community site signed a definitive agreement to acquire Starseed and its WebRing Technology, which allows so-called ringmasters to invite similar sites to link together.
GeoCities will issue up to 775,000 shares of its stock and pay $2 million in cash for the deal, which is valued at more than $30 million based on GeoCities' stock price today. GeoCities will assume Starseed's liabilities and the acquisition will be accounted for as a purchase.
GeoCities plans to integrate WebRing technology into its service, which already includes 2.8 million member sites. WebRing has 900,000 members and 66,000 "affinity groups."
"The addition of WebRing allows us to deliver significant benefits to our members, visitors, and advertisers through increased traffic and enhanced services to our members' sites," GeoCities chief executive Thomas Evans said in a statement.
Stock in GeoCities was down more than 6 percent in midday trading today. The shares have traded as high as 51.375 and as low as 13.25 since the company went public in August.
GeoCities had one of the most successful Internet IPOs of the year when its shares jumped more than 120 percent on its first day of public trading.