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Crayfish Nabs 47 Percent of Intranets.com's Japan Arm

E-mail provider Crayfish Co., Ltd. Friday grabbed a 47 percent stake in Intranets K.K., the Japanese arm of popular free intranet provider Intranets.com.

The deal is worth 600 million yen. Crayfish will purchase 1,500 ordinary shares currently owned by Hikari Tsushin and 2,500 ordinary shares that will be newly issued by Intranets Japan. The purchase price of an ordinary share of Intranets Japan in both transactions will be 150,000 yen.

The transaction is expected to close by December 25, 2000 without any foreseeable material impacts on Crayfish's current fiscal year financials.

Crayfish, which plans to send a board member for Intranets Japan, will also lend its e-mail service to Intranets K.K. under an alliance. Intranets Japan provides free intranet functions, including a Web-based scheduler and file sharing to approximately 150,000 subscribers. The portal generates revenues from advertisement fees for banners on its pages and advertisements in e-mail sent to subscribers.

It also expects paid e-mail and related services to become another source of revenue, which is where Crayfish comes in. Crayfish will license its proprietary "Crayfish 2000" hosting services to Intranets Japan. Furthermore under the alliance, Crayfish will offer Intranets Japan's proprietary business collaboration service to approximately 53,000 of its subscribers.

Isao Matsushima, president and chief executive officer of Crayfish, said the deal makes sense because both firms cater to the same market segment -- small- and medium-sized businesses.

Hideki Wachi, president and CEO of Intranets Japan, agreed.

"We firmly believe that we can maximize the synergetic effect between Crayfish and us by complementing each other's service lineup, including provision of our proprietary intranets solutions to Crayfish," Wachi said.