Excite@Home said today it has completed its acquisition of
electronic-greeting card company Blue Mountain Arts.
Excite@Home, a provider of high-speed Internet access, put the finishing
touches on a deal worth $780 million in cash and stock first initiated in October. The Internet company
bought Blue Mountain primarily to pitch its high-speed Internet access
services to the more than 9 million consumers that visit the site each month.
With the rise in competition online, Net companies have sought new
ways to lure customers. Many start-ups have looked to e-greetings--which
typically draw large audiences--as a way to tap into new users.
E-greetings, however, offer companies little profits. The
cards are usually free, and most of the revenue is generated through advertising.
CNET News.com TV's coverage of Excite@Home's Blue Mountain deal.
Saturday and Sunday, Dec. 18 and 19,
4 to 5 p.m. ET on CNBC
Internet behemoths including Amazon and Yahoo have created their
own e-greeting offerings to compete
in this market. NBC three weeks ago purchased a 7.2 percent stake in Blue Mountain rival Egreetings
The Excite@Home-Blue Mountain deal was by far the largest in the
e-greetings industry. Some analysts were shocked at the buyout price, which
included an additional $270 million payment contingent on Blue Mountain
meeting traffic and other performance goals. Others applauded the move
despite its cost, asserting it was a good way for Excite@Home to pool a
large group of new customers.
Blue Mountain is consistently among PC Data Online's top 50 sites on the
Web. Last month, the Internet research group estimated Blue Mountain
attracted more customers to its site than parent company Excite@Home.