NBCi thinks Bigvine with new small-business company

NBC Internet agrees to merge its AllBusiness.com division with online barter marketplace Bigvine to form a Net company targeting small businesses.

2 min read
NBC Internet said Tuesday that it has agreed to merge its AllBusiness.com division with online barter marketplace Bigvine to form a Net company targeting small businesses.

The new company, which will operate under the AllBusiness name, will combine AllBusiness' content and customer base of small businesses with Bigvine's transaction engine and barter marketplace, which allows the trading of goods and services over the Web. NBCi acquired small-business portal AllBusiness earlier this year in a stock deal valued at roughly $225 million.

Once the transaction is finalized, Bigvine shareholders, including Kleiner Perkins Caufield & Byers, American Express and Kohlberg Kravis Roberts, will have a combined interest of approximately 51 percent in the new venture. NBCi, which is partially owned by General Electric, will own a 49 percent interest in the new company. Other financial terms were not disclosed.

NBCi said it expects the new AllBusiness company to help advance NBCi's profitability. Following the completion of the transaction, NBCi will focus its operational efforts on the domestic consumer Internet market, with AllBusiness operating as a standalone company.

The deal comes as NBCi faces increased competitive pressures in the Web portal market from a number of players, including giants America Online, MSN and Yahoo. Competitors in the field, especially media companies, have encountered some rough going. Walt Disney's Go.com recently launched a new version of its site to focus on entertainment and leisure, while sites such as Excite@Home and Lycos have sold out to suitors.

So far, NBCi's Net journey has taken many twists and turns. Last month, the company unveiled a redesign of its Web site, which folds holdings such as community site Xoom.com and search engine Snap into a single, branded site. In August, the company laid off 170 employees, or 20 percent of its staff, as part of a restructuring.

Meanwhile, the company's traffic has slipped over the past few months, and so have its shares. The shares, which have plunged nearly 94 percent for the year, have been trading in the low single digits. The company had hit a 52-week high of $106.12.

As part of today's agreement, American Express, which has been actively marketing Bigvine to its small-business customers, will continue to support the new company through co-marketing efforts.

For its part, NBCi will provide the new AllBusiness with on-air television advertising on CNBC and NBC, along with distribution and marketing on the new NBCi.com portal. Further marketing support will come from other partners, including GE Small Business Solutions, Delta Air Lines and Starwood Hotels and Resorts.

Bippy Siegal, Bigvine's former president and chief executive officer, will become chairman and chief executive of the new venture, which will be based in San Francisco.

CNET Networks, publisher of News.com, owns a stake in NBCi.