will receive cash for each of its
17,000 subscribers that land with EarthLink
services. IBS Interactive provides regional dial-up services to East Coast
clients in Virginia, North Carolina, South Carolina, New Jersey, New York
According to ISP-Planet, recent
subscriber acquisitions are averaging about $428 per customer. If the IBS
Interactive deal with EarthLink is consistent with market trends, the firm
could stand to make more than $7 million at the close of the deal.
The modem-based divestment is due to IBS Interactive’s desire to pay off
bank debt assumed in its March acquisition of Digital Fusion Inc. While
financial details of the deal were not disclosed, IBS Interactive indicated
that it has 60-days, or two billing cycles to make the most of its
subscriber transfer to EarthLink.
Nick Loglisci, IBS Interactive chief executive officer, said that divesting
its consumer dial-up business is the last piece of its strategic plan
commenced late last year.
“We’re going to concentrate entirely on IBS Interactive’s higher-margin,
consultative e-business services,” Loglisci said. “We have taken this step
in anticipation of the pending merger with Infonautics.”
Cliff Bryant, EarthLink subscriber acquisitions manager, said its naturally
pleased to add IBS Interactive’s clients to its fold.
“We have a long history of integrating subscriber bases with a minimum of
hassles for the customer and we look forward to exceeding these new
EarthLink members’ expectations,” Bryant said.
EarthLink’s recent acquisition history includes 762,000 potential customers
in a June cash and stock valued at approximately $308 million, or roughly
$404 per subscriber.
EarthLink picked up MindSpring’s client base in Sept. 1999 when the two
national Internet service providers merged business operations.
Focusing on basic dial-up transport, EarthLink remains loyal to its
connectivity service core rooted in MindSpring’s renowned customer
satisfaction and client retention mantra.
IBS Interactive’s Loglisci said EarthLink has continued to deliver
consumer-centric dial-up services that command the respect and envy of the
“Our dial-up customers have been very loyal to us and we believe that
EarthLink, which has built its reputation on providing exceptional customer
service and support, will quickly gain the same loyalty,” Loglisci said.
“We will continue to work closely with EarthLink to ensure the transition
goes as smoothly as possible, without any interruptions and a minimum of
changes for our subscribers,” Loglisci added.
IBS Interactive plans to maintain its leased and digital subscriber line
services to clients in order to focus on growing its e-business and
information technology solution offerings.