Vectrix.com acquires creator of Frogapult

Nvision chief executive Mike Bielinski would not disclose the terms of the transaction between the two privately-held companies, which he described only as an all-stock deal. Vectrix spokeswoman Julie Ross also declined to comment on the terms of the deal.

The purchase caps a string of acquisitions for Dallas-based e-commerce service provider Vectrix, presaging the company's growing readiness for a potential initial public offering. Yesterday, Vectrix also announced a merger with credit electronic transaction firm Triumphant Enterprises, the company's seventh acquisition.

Dallas-based Vectrix is a full-service e-commerce provider, offering services such as Web site design, marketing and transaction processing. The company was founded in 1996 by former GTE and Perot Systems employee Mark Lynd, who now serves as president.

With the Nvision purchase, Ross said, Vectrix will gain a company with a proven marketing track record to complement its full-service e-commerce offerings.

Nvision is best known for Elf Bowling and Frogapult-games in which players try to knock down a gang of Santa's little helpers with a cartoon bowling ball and hurl animated frogs onto a target. They have been widely circulated as email attachments. Bielinski estimates users have played Elf Bowling 50 million times since its release in November. Other titles from the company include Y2K-The Game, Good Willie Speaks and Good Willie Hunting.

The games have not proven to be a big moneymaker for the company so far.

"We're not trying at this point to reap the benefits of the games' popularity by monetizing usage," said Bielinski, who estimated the company has earned about $2.6 million in revenues so far this year, primarily through its Web site development services. "We're just trying to build brand awareness."

He compared the company's business strategy to BlueMountainArts.com-an electronic greeting card company that was purchased by Excite@Home in August for $780 million, a valuation justified primarily thanks to its surprise ranking as one of the top most-visited sites on the Web. Rather than build sales, Bielinski said, NVision has built traffic, signing up 800,000 registered users in the past three weeks alone.

The company's profile rose dramatically this month after Elf Bowling and Frogapult became the subject of a virus hoax, with warnings spread by email that the games contained a virus time bomb set to go off on Christmas Day.

Virus hunters including Symantec and McAfee have since announced the games are safe.

NVision has also drawn scrutiny for its privacy policies. According to a report in the San Jose Mercury News, the company failed to notify users that its games create an Internet connection with Nvision when they launch.

In a statement on the company's Web site, Nvision acknowledged that the games do create an Internet connection, but denied its games compromise the privacy of users. The company said the Internet connection was intended to provide users with online scores and rankings of top players.

"Absolutely no information is collected from your computer and transmitted over the Internet by Elf Bowling or other games," the statement reads. "At the beginning of each game, Elf Bowling tests to see if the computer has a live Internet connection since registering scores online is one of the functions of the games."

The recent controversies did not dampen Vectrix's enthusiasm for the merger.

"NVision Design has proven its ability to create innovative programs that are effective, as well as entertaining," said Vectrix president Lynd in a release. "By joining forces, we are creating a more powerful e-commerce solutions company and increasing our ability to meet the needs of our clients. We're excited to welcome the NVision team."

Bielinski and design partners Dan Ferguson and Dax Davis will remain with Vectrix.com as senior vice presidents. The entire NVision Design team will join the combined company.