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LYCOS ACQUIRES GAMESVILLE.COM FOR $207 MILLION
BOSTON, MA - November 23, 1999 - Lycos, Inc. (NASDAQ: LCOS), the fastest growing Internet portal and world's largest online community, today announced it has signed a definitive agreement to acquire Gamesville.com (http://www.gamesville.com), a leading interactive entertainment company and direct marketer. Gamesville will become part of the Lycos Network, adding a massive multi-player game environment to the list of compelling destinations that attract millions of users to the Lycos Network day after day, fueling already industry-leading growth in page views and revenues.
The Lycos Network experienced a dramatic jump in audience reach from September to October growing from 43.6 to 45.8 percent. Gamesville reaches 4.5 percent of the monthly Web audience, which is expected to boost Lycos' reach even further to approximately 47 percent. Lycos Network sites, which include Tripod, HotBot, Angelfire and MailCity, are now used by nearly one of every two Internet users.
Gamesville's unique approach to interactive entertainment enables thousands of registered contestants to simultaneously vie for prizes in unique, proprietary live games such as poker and other card games, sports, trivia and bingo. These games have proven to be one of the most popular pastimes on the Internet, driving more than a 300 percent increase in audience reach for Gamesville in the last year. The addition of Gamesville brings the following to the Lycos Network:
2.2 million registered users adding more than 10,000 new members each day A site second only to Ebay in stickiness (according to Media Metrix) with the average usage at nearly 17.9 minutes per day More than 7 million additional page views per day A premier direct marketer with a rich base of technology, products and expertise
"The addition of Gamesville to the Lycos Network adds to our revenues, grows our average daily usage minutes by nearly 20 percent and adds depth to our direct marketing efforts," said Bob Davis, president and CEO of Lycos, Inc. "We were particularly attracted to Gamesville because of the exceptional quality of registration information, which considerably expands our direct marketing infrastructure. Furthermore, by deploying their rich gaming content across the Lycos Network, we believe that Gamesville's already significant growth in users and page views will be enhanced."
Davis added, "What began with Sonique and Quote.com is expanded with Gamesville as we add another popular vertical property to our portfolio to boost visitor frequency and duration, thereby bolstering page view and revenue growth. This model delivers the best on the Web for our loyal users and is supported by an exceptionally talented group of employees."
"Gamesville adds the best in sticky entertainment combined with the power of true permission-based 1:1 target marketing," said Steve Kane, CEO of Gamesville. "Our powerful multi-player games should thrive in Lycos' large-scale, self-referring environment. We anticipate that Gamesville will provide Lycos users with another great reason to come together, enhancing their experience and loyalty, and that our user base will enjoy the opportunity to access the broader resources of the large and diverse Lycos Network."
Gamesville adds an attractive property to the Lycos Network for advertisers because the company has a detailed profile on each registered user. Also, advertisers have a unique opportunity to deliver E-mercials™, long-form, full screen, rich media messages, to captive audiences for multi-minute intervals. These e-mercials are delivered every 10 minutes during the waiting period between games and can last up to three minutes, making them a cutting-edge platform for broadband television-like commercials.
In addition to the similarities to TV for advertisers, Gamesville mirrors many of the wildly popular TV game shows where users play for prizes. But unlike TV, Gamesville.com turns an exciting but passive TV game show forum into an interactive Web phenomenon - an Internet "killer app." - in which there are no viewers, only players.
Lycos will acquire Gamesville for $207 million in Lycos stock plus the assumption of Gamesville's stock option plan. The acquisition is expected to close by the end of the year and is subject to Gamesville.com shareholder approval. Steve Kane will serve as Lycos' general manger of gaming reporting to Ron Sege, executive vice president. With the addition of Gamesville, Lycos will employ more than 900 people across the country.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties, including, without limitation, the ability to successfully integrate the two companies and to realize the synergies and other perceived advantages resulting from this acquisition, the level of usage of the Internet and traffic to the companies' Internet sites, continued acceptance of the companies products, demand for Internet advertising, seasonal trends in advertising sales, the advertising budgeting cycles of individual advertisers, capital expenditures and other costs relating to the expansion of operations, the introduction of new products or services by the two companies or their competitors, the mix of the services sold and the channels through which those services are sold, pricing changes, general economic conditions and specific economic conditions in the Internet industry and actual results may differ materially from those projected. More information about potential factors that may cause actual results to differ materially from those in the forward-looking statements may be found under the heading "Factors Affecting the Company' s Business, Operating Results and Financial Conditions" in the Company's annual report on Form 10-K.