AOL Buys Israel's Mirabilis
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The purchase, expected to be completed on June 5, 1998, calls for AOL to pay the $287 million price tag in cash in exchange for 100% of Mirabilis's assets.
In addition, beginning in fiscal year 2001, AOL said it will make contingent payments totaling $120 million over a three-year period based on growth performance levels.
AOL also disclosed that a large portion of the purchase price will be accounted for as in-process R&D during its fourth quarter ending June 30, 1998, and that it doesn't believe the acquisition will have negative consequences on its operating earnings.
Mirabilis' ICQ technology is based on a proprietary server and database network. It provides instant messaging and chat between online users, and enables URL transfers, file exchanges, and online gaming.
According to Mirabilis, there are 12 million ICQ users registered via its Web site. Of its user base, the company said 60% come from outside the U.S. and almost 40% are European.
AOL said the ICQ buy will expand its international presence, most notably in Europe through its AOL and Bertelsmann AG joint venture service.
"Strategically, this is one of our most important initiatives for three reasons," AOL Chairman and CEO Steve Case said in a statement. "First, the ICQ software dashboard stays on a user's screen all the time--making it a natural starting point for content, context and community, and providing us with an unparalleled launch pad for a broader Web portal strategy. Second, ICQ has attracted one of the fastest growing and most loyal communities in cyberspace. And third, ICQ has a strong international reach, further accelerating our global expansion."