Web consulting company USWeb/CKS today finalized its acquisition of Mitchell Madison Group and named its co-founder as USWeb's new president and chief operations officer.
Tom Steiner, a 20-year consulting veteran and Mitchell Madison managing partner, will take on USWeb's day-to-day business operations, the company said. Steiner replaces USWeb co-founder Toby Corey, who is stepping down to pursue other interests, including working with USWeb founder Joe Firmage at IntendChange, a consulting firm for Internet start-ups that is partly financed by USWeb.
Before co-founding New York-based Mitchell Madison, which focuses on financial and banking clients, Steiner was a partner at management consulting firm McKinsey for 10 years.
With the completion of the $308 million deal, USWeb said it is better positioned to offer clients expanded financial capabilities using Mitchell Madison's payment systems and electronic trading networks.
"We need to be able to offer the backbone of financial services and payment systems to our clients as we start tackling the fast-growing business to business commerce market," USWeb chief executive Robert Shaw said in an interview with CNET News.com.
With the Mitchell Madison deal, USWeb continues to add to its capabilities to tie back-end systems--such as inventory and shipping applications--to front-end Web sites that customers use, according to Susan Scrupski-Miranda, analyst with IT Services Advisory.
"USWeb is not a designer boutique," Scrupski-Miranda said. "They're more end-to-end. They're really gunning to be a tier-one leader in the industry. They've got all the right ingredients."
But Tom Rodenhauser, an analyst at Consulting Information Services, said USWeb will likely face some challenges integrating the two companies' way of operating.
"The net effect is that culture dissipates [when a company is acquired]," said Rodenhauser, predicting that Mitchell Madison's more buttoned-down consulting style will likely disappear over several years, as employees leave and others are taken into the USWeb fold.
Still, USWeb's Shaw said merging the two companies hasn't been an issue. "We've done it successfully for a number of acquisitions, and it doesn't disrupt the company's organizational structure at all," he said.
USWeb said it will issue approximately 14.4 million shares of its stock to acquire Mitchell Madison. The company also said it has established a stock option program for Mitchell Madison employees.