>From the Silicon Alley Daily: Yahoo Buys Alley Veteran Yoyodyne for $29.6 Million -------------------- Yahoo announced today that they have agreed to purchase online direct marketing firm Yoyodyne for $29.6 million. According to Yahoo, the search engine will issue 280,664 shares in exchange for all of Yoyodyne's outstanding shares. Yoyodyne, founded in 1995 and headquartered in Irvington, NY is widely considered to be the Publisher's Clearing House of the Web. The firm has produced a number of highly-trafficked, results-based, promotions on the Web, including "Get Rich Click!" and an e-mail trivia game based around the Dilbert comic strip. These programs have garnered Yoyodyne a database of over one million users, as well as an impressive client list featuring AOL, American Express, Microsoft and Sony. Yoyodyne draws its name from the toy-company-turned-failed-defense- contractor in Thomas Pynchon's "The crying of Lot 49," and the alien corporation in the 1983 camp sci-fi classic "Buckaroo Banzai." In an exclusive interview, Yahoo President Tim Koogle described the Yoyodyne acquisition as "central in expanding our direct marketing promotions," and that Yahoo has a "powerful commitment to direct marketing." He explained that Yahoo has seen advertisers demand more results than they get from standard advertising campaigns, and that the Yoyodyne was targeted to enhance Yahoo's direct marketing offering and brainshare. According to Koogle, the Yoyodyne brand will be replaced with Yahoo's own (as in most deals). Yahoo member profiles will not automatically be added to Yoyodyne's database, but they will be offered to opt-in to Yoyodyne's various campaigns at some point. "We did the deal because we have a very similar vision as the people at Yahoo" says Yoyodyne CEO Seth Godin. "They bring a global brand and global reach to the business model we've created." Godin says the deal was initiated when his firm was recently seeking additional financing, but that "getting married was a much better idea" than raising additional capital. Godin reports that Yoyodyne currently has 50 employees, over 50 percent of whom are in sales and marketing, making the deal an excellent staff boost for Yahoo. Koogle continued Yahoo's long- standing policy in not reporting the size of the New York staff. Koogle said that Yahoo would continue to acquire companies. In a somewhat ironic statement which appeared in the Silicon Alley Reporter cover story for June 1997, Godin said, "The Internet is about personal interaction, not about broadcast. There are ten networks on TV and one million on the Web. The odds are one- million-to-one that you could create a network on the Internet." Fred Wilson of the Flatiron Partners, a major investor in Yoyodyne, said, "A huge part of Yoyodyne's cost is purchasing traffic to drive the promotions. Yahoo already has that traffic in spades and will take Yoyodyne from a good business to an unbelievable business. Yoyodyne's business has been surging recently and this a great move by Yahoo." In response to the flurry of activity of the Flatiron Partners portfolio companies, Wilson said, "What you are seeing is the result of work we did over the summer to get our portfolio companies in a strong position for the coming consolidation phase. Some of them will be consolidators (Geocities, iXL, StarMedia, etc.), and some will be bought by companies that can leverage their market position (Yoyodyne-Yahoo)." Wilson added that he expects this activity to continue over the next 6 to 12 months. He estimated that Flatiron Partners made a three-times return on the investment in Yoyodyne for themselves, for former partner SOFTBANK and current partner Chase. Contact: Seth Godin; [EMAIL PROTECTED], 914-591-9696 http://www.yoyo.com ____________________________________________________________________ -------------------------------------------------------------------- Join The Web Consultants Association : Register on our web site Now Web Consultants Web Site : http://just4u.com/webconsultants If you lose the instructions All subscription/unsubscribing can be done directly from our website for all our lists. ---------------------------------------------------------------------
