If completed, the deal would end the "push" technology pioneer's ongoing search to find a buyout partner since it canceled its initial public offering last July.
Since then, the firm has suffered a number of setbacks. PointCast's highly touted chief executive, David Dorman, left to join an AT&T-British Telecom venture in March. Also, a buyout deal from a group of Baby Bells collapsed, and in the wake of the failed pact, the company laid off a third of its staff.
Although an agreement with privately held Idealab is likely to be signed, one source cautioned there was a "small chance" that another buyer could emerge. Idealab expressed an interest in PointCast about the same time that the Net firm's cofounder Chris Hassett announced his own bid for the company. Hassett and PointCast, however, were not able to close any deal.
Idealab not only would contribute money to the company but also would provide management expertise and allow PointCast to do business with the other Internet companies in its portfolio.
Idealab, founded in 1996, includes more than 20 businesses, including CitySearch, GoTo.com, eToys, and Tickets.com. Some of them have plans to go public; GoTo.com and eToys are planning stock offerings, for example.
This shared network of companies is common among venture capital firms such as Kleiner Perkins Caufield & Byers, which refers to the concept as "keiretsu."
PointCast could benefit from the relationships with other Idealab companies, the sources said. The firm's companies typically are separate entities controlled by Idealab's management. Idealab usually does not take a controlling stake, but rather takes an equity stake in the firms in exchange for start-up capital. In the case of PointCast, however, Idealab would take a controlling stake.
Idealab's investors include Compaq chairman Ben Rosen and Silicon Valley venture capital firms Foundation Capital and Moore Capital, among others.
PointCast declined comment, and Idealab could not be reached for comment.