Allen Invests $300 Million for Controlling Stake In Go2Net
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Go2Net is a network of Web sites focusing on personal finance, search, commerce and games. The company also develops Web-related software. Properties include Go2Net Personal, Silicon Investor, StockSite and the MetaCrawler search engine.
The investment consists of the sale of convertible preferred stock to Allen's Vulcan Ventures Inc. investment arm. Vulcan Monday purchased $165 million in convertible preferred Go2Net shares with the remainder to be purchased once Go2Net shareholders approve the deal.
Vulcan also agreed to purchase 1.4 million in common shares from Go2Net's executive officers and directors and to commence a tender offer for up to 3.6 million of Go2Net's outstanding shares at $90 each in cash. If all the purchases go through, Allen will have a 54 percent stake in the company.
Allen said he is basing his investments on the belief that having portals, such as Go2Net, delivered to homes via set-top boxes will be a key component in the future of cable.
"I look forward to working with Go2Net to develop services for the customers of our cable systems and to forging relationships between Go2Net and cable holdings to further enhance the companies' existing offerings," he said.
Russell C. Horowitz, Go2Net's chief executive officer, and Go2Net's existing management team will continue to lead the company.
"Go2Net's association with Paul Allen is significant for a number of reasons: It provides Go2Net the capital and strategic resources necessary to build the Go2Net brand, extend our acquisition strategy and enhance our existing properties and infrastructure while setting the stage for the Go2Net Network to become a primary platform for content delivery and value creation in the broadband world," Horowitz said.