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USWeb snares 6 companies

The company, which created the concept of franchising Web operations, acquires four competitors and two affiliates.

Six more companies have gotten snared by USWeb.

The company, which brought the concept of franchising Web operations to the Internet, today announced that it has acquired four of its competitors and two of its affiliates. The stock-swap deals are part of USWeb's five-year business plan to make the company the dominant Web consulting firm by gobbling up talented smaller rivals, along with their clients.

"The idea of aggregation is something like a snowball that begins to roll and goes faster and faster," USWeb chairman and CEO Joe Firmage said. "In this business there are too few people who know what they're doing, and we're going out and finding those who do and acquiring them. What we learn from [newly acquired Web marketing firm] Cybernautics, we're able to redeploy that knowledge over many offices across the nation."

USWeb has acquired 17 companies, including the six announced today, since April. Its clients are mid-to large-scale companies including Chevron, PeopleSoft, Nynex, and National Geographic.

The 2-year-old company builds intranets, extranets, and Web pages while it gives advice on Internet strategy, development services, user interfaces, and graphics design. It also provides Internet hosting and maintenance.

USWeb boasts a lucrative revenue model. For the basic corporate Web site, it charges $20,000 to $100,000. For intranets, what USWeb calls "business-critical" sites, it charges $50,000 to $1 million. And for "mission-critical" sites, which are used for internal financial systems or customer service networks, the bill ranges from $500,000 to $3 million.

The four acquired competitors announced today are Cybernautics in Sausalito, California; Dream Media of Santa Monica, just outside Los Angeles; Electronic Images of Pittsburgh, Pennsylvania; and Virtual Marketing of Chicago.

The two affiliates are USWeb Hollywood and USWeb Phoenix. USWeb now has more than 50 affiliates and offices in 28 states.

Affiliates, or franchises, paid a $50,000 initiation fee to join USWeb and pay more than 7 percent of gross revenues to the company. USWeb stopped issuing franchises at the end of 1996 as it began a policy of acquiring companies directly without first becoming affiliated with them.

USWeb supports the remaining franchises with shared technology research and services, products such as accounting forms and discounted business supplies, continuous education, and marketing support.

With financial backing from companies including Softbank, Reuters, and Crosspoint Ventures, USWeb has raised $35 million so far, including $17 million in a second round of financing in June.

In another phase of its business plan, USWeb plans to expand internationally to Japan, Singapore, Germany, the United Kingdom, and France.