Excite@Home Corp.'s deal to pay $780 million or more for
online-greeting-card giant Blue Mountain Arts Inc. netted a lot more than animated
Halloween and Gandhi's birthday wishes.
In Boulder, Colo.-based Blue Mountain, Excite@Home last
week grabbed one of the most-visited commercial sites on the Internet, and it sees as the
opportunity to leverage that traffic into more subscriptions for its broadband-access
service and more online product sales.
The Bluemountain.com Web site attracts some 9 million
visitors monthly, making it one of the 15 most-visited sites on the Internet. It holds an
estimated 65 percent of the booming market for online greeting cards.
According to Web market watcher Media Metrix Inc., Blue
Mountain trailed only retailer Amazon.com Inc. and auction site eBay Inc. among
electronic-commerce sites, even though it does not charge for its products.
Bluemountain.com also handles some 1 million daily online
transactions related to gift-giving events and an international spectrum of known events
and holidays, including AIDS Awareness Week, Flute Day, the Tibetan Buddhist New Year and
Girl Scouts founder Juliette Low's birthday.
Excite@Home president George Bell said the acquisition
enables his company to create new e-commerce opportunities with Blue Mountain's existing
customer base, plus new services such as online calendars.
Because many of the site's cards are sent in conjunction
with gift-giving opportunities, Bell wants to add a concurrent ability for the sender to
buy and send gifts, flowers or anything that generates revenue.
Besides its English-language site, Blue Mountain also
maintains versions of its greeting-card sites in Spanish, French, Italian, Portuguese,
Chinese, Japanese and Korean.
Blue Mountain was founded in 1971 as a poster-printing
business by Steven Schutz and his wife, Susan Polis Schutz, a physics expert and a poet,
respectively. The company also has an established "meat space" business as a
publisher of poetry books by authors ranging from the unknown to Leonard Nimoy.
Excite@Home will issue about 11 million new common shares,
worth some $430 million, and pay another $350 million cash for Blue Mountain. Blue
Mountain could also get up to another $270 million in stock if it meets certain
performance targets over the coming holiday season.
The companies said they expected to close the deal before
Excite@Home last week also padded its e-commerce lineup and
investment portfolio, announcing three-year distribution agreements totaling $34 million
in fees with Internet retailers Proflowers.com, an online florist; candy purveyor Dan's
Chocolates; and Lucidity Inc., a provider of online private-label gift certificates.
Excite@Home also made undisclosed investments in Proflowers
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