Inktomi buys Impulse Buy
Inktomi will buy online merchandising software developer Impulse Buy Network in an effort to bring the "best of real-world merchandising to the Internet."
Inktomi, the search and shopping technology provider, said it will acquire 100 percent of privately held Impulse Buy's outstanding stock and assume all the company's stock options in exchange for 900,000 shares of Inktomi common stock. Shares of Inktomi closed yesterday at 125.5, making the deal worth about $113 million.
Impulse Buy's software will be fully integrated with Inktomi's Shopping Engine, a database of more than 2 million products ranging from computer hardware to books to flowers. Inktomi licenses the Shopping Engine to portal sites including Infoseek's Go Network and CNNfn.
The Impulse software enables merchants to target promotional programs such as limited time offers and special offers to Internet users who are likely to be interested.
"It's like when you walk into a Target store and you see the impulse buying racks," said Impulse Buy CEO Mark Goldstein. "We've built little pieces of technology that you can place across a site that are contextually relevant."
Impulse Buy's products aren't likely to add to Inktomi's revenues this quarter, according to CEO Dave Peterschmidt. The company will spend the next several months preparing its shopping tools for the Christmas season. "The product is just coming onto the market," he said. "At the Christmas season we'll understand how much revenue we'll derive out of shopping."
More than 20 portal and destination sites have licensed the Shopping Engine, Inktomi said, and it has signed up than 350 merchants.
Inktomi is hoping the Impulse Buy software will not only attract more merchants but increase their participation in online marketing. "The key to success in shopping on the Internet is the merchant," said Inktomi CEO Dave Peterschmidt. "If we don't give them an environment where they can exercise their expertise, it won't work."
The Impulse Buy software is already used by online merchants such as K-Tel and WalMart and on sites like America Online and AT&T WorldNet.
Both California-based companies said Impulse Buy Network will operate under the Inktomi name with employees of the Inktomi company.
Inktomi will account for the transaction as a pooling of interests and hopes to close the deal by June 3, 1999, the companies said.