Yahoo! said the company will become Yahoo!'s Broadcast Services business unit, but will continue using the brand name Broadcast.com for its consumer business. Along with recently-purchased Geocities, Broadcast.com is among the first of Yahoo!'s acquisitions to be run as a separate brand.
"We knew that as the industry matured, our mergers and acquisitions would deal with brands that had already achieved a substantial brand equity," said Yahoo! president and CEO Jeff Mallett. "Broadcast.com will remain the destination for people used to going to it today, and in addition we will distribute content to the vertical sections of Yahoo!"
Yahoo! will use the audio and video content to spruce up such sub-sections as Yahoo! Sports, Yahoo! Finance and Yahoo! News.
Down to business
"We already offer the ability to set up a store, or to set up customized e-mail or message boards. This will allow us to pull together our business services, with [Yahoo! Broadcast] as the centerpiece," Mallett said.
Yahoo! Broadcast will continue to be located in Dallas, Texas, and will be run by former Broadcast.com CEO Todd Wagner and chairman and president Mark Cuban. Both have been named vice-presidents of Yahoo!
Broadcast.com's media sales and business services sales groups will be integrated into Yahoo!'s overall sales force.
Mallett said that overall, there is very little redundancy between the two companies, even in the promotional staff, and expects few layoffs, if any. He said Yahoo! will be expanding the broadcast unit's staff of 335.
Yahoo! will exchange about 28,645,000 shares of Yahoo! common stock for about 37,096,000 shares of Broadcast.com common stock. Yahoo! will also convert approximately 6,633,000 Broadcast.com stock options into about 5,122,000 Yahoo! stock options. Yahoo! expects to record a one-time charge of about US$22 million in the third fiscal quarter of 1999 relating to the acquisition.
Yahoo! said the integration will be completed by the third quarter of 1999.
Yahoo! also sees the merger as a boost for its business-services operation, which already includes communications and e-commerce services.
