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Tech Industry

USWeb pegs franchise on IPO

USWeb files to go public as it looks to further fund its build-out of a nationwide franchise network of Web-development shops.

USWeb has filed to go public as it looks to further fund its build-out of a nationwide franchise network of Web-development shops.

The company hopes to be listed on the Nasdaq under the ticker "USWB," and expects to use the proceeds from the offering for general corporate purposes, including working capital and acquisition-related costs, according to a filing with the Securities and Exchange Commission.

USWeb has acquired 17 competitors and affiliates since April. And the company said it is holding preliminary discussions with other acquisition candidates.

USWeb provides intranet, extranet, and Web-site solutions for medium-sized and large companies, and one of its key strategies for growth includes additional acquisitions.

The company has invested substantial time and resources in establishing a national network of consulting offices. Because of this investment, the company believes it has built one of the most recognized brands for Internet professional services and has developed a highly scalable organization that can leverage central resources as its operations expand through acquisitions as well as internal growth.

Among the company's clients during the eight months ending in August were Charles Schwab, Chevron, Harley-Davidson, Microsoft, REI, Silicon Graphics, and Sony Music.

The company said clients typically establish a basic Web site through the company and then add services such as business-critical, fully integrated intranets or extranets, which cost several million dollars. The company's strategy leverages existing clients by offering a range of services at all stages of their adoption of Internet solutions.

To achieve its goal, USWeb plans to expand its network of consulting offices, develop additional Internet services and solutions, enhance the USWeb brand, and leverage operational economies of scale.

For the quarter ending in June, the company reported revenue of $2.4 million and a net loss of $15.4 million, or 59 cents a share. That compares to revenue of $100,000 and a net loss of $2.7 million, or 10 cents a share, for the same period a year earlier.

However, the company has acquired several companies during that quarter. If the acquisitions that bolstered its USWeb operations in San Francisco, Seattle, Milwaukee, LA Metro, Atlanta, Silicon Valley, DC, Phoenix, and Pittsburgh had been in place by the end of the June quarter, the company would have reported revenue of $4.3 million and a net loss of $10.1 million, or 51 cents a share, compared with revenue of $2.7 million and a net loss of $8.2 million, or 31 cents a share, a year ago.

All of the shares to be offered will be sold by the company.

The underwriters include Hambrecht & Quist, Donaldson, Lufkin & Jenrette, Wessels, Arnold & Henderson, and First Albany.