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Insurance Dot Coms Merge

Online insurance broker Quotesmith.com is acquiring privately held Insurance News Network LLC, including its flagship Web site, insure.com in a cash and stock-option deal.

Darien, Ill.-based Quotesmith, which provides online quotes from more than 300 insurance companies, said that it paid $1.4 million in cash and issued 316,000 stock options. Quotesmith stock closed at $2.03 a share on Thursday.

West Hartford, Conn..-based Insure.com is an independent insurance news organization that provides consumer insurance news, information and decision-making tools.

"This acquisition significantly advances our competitive posture by making our online insurance brokerage services available to several hundred thousand visitors each month at the opportune time when they are conducting self-motivated insurance research and fact-finding," said Quotesmith.com founder and chairman, Robert Bland. "Ownership of this ... site gives us an arsenal of valuable content, a permanent new customer gateway and the potential to accelerate our acquisition of new customers."

Insure.com, which will maintain its editorial staff and its brand name as a separate business unit, claims about 400,000 visitors a month. Philip Moeller, founder and publisher of insure.com, will continue to lead the operation as a Quotesmith.com senior vice president. Implementation of the Quotesmith.com technology throughout the insure.com site is expected to occur over the next 90 days.

Quotesmith.com, which lost $18.6 million last year, also said it is revising financial guidance for 2001. Based upon this acquisition and other factors, the company said it now anticipates revenues of approximately $8 million this year with a net loss of $8 million and year-end cash and short-term investment balances of $17 million.

For 2002, Quotesmith.com anticipates revenues of $10 million to $11 million and a net loss of less than $1 million. Quotesmith.com said it believes that its current cash on hand is adequate to reach profitability without the necessity of additional debt or equity financing.