Acquisition Significantly Broadens EarthWeb's
Subscription-Based Business-To-Business Services
Strategic Highlights:
-- Broadens content base in networking and hardware IT segments
-- Significantly expands sales force and enables cross-selling
opportunities
-- Increases subscriber base from over 3,500 to more than 12,000
-- Positions EarthWeb to diversify revenue streams by increasing revenue
from subscription-based services
NEW YORK, March 23 /PRNewswire/ -- EarthWeb Inc. (Nasdaq: EWBX) today
announced that it has acquired MicroHouse International, Inc.
(http//www.microhouse.com), a provider of subscription-based electronic
reference libraries to information technology (IT) professionals.
MicroHouse's electronic libraries include information on networking, hardware
and applications. The company provides its subscription-based products to
such customers as American Express, Nortel, Network Computing Devices and
Compaq-Digital. With the acquisition, EarthWeb significantly expands its
business-to-business subscription services.
Under the terms of the agreement, EarthWeb will acquire MicroHouse for
approximately $9.0 million in shares of common stock, a convertible note and
cash. In 1998, MicroHouse had revenues of approximately $3.7 million
(unaudited).
Strategic Highlights of the Acquisition
Through the acquisition of MicroHouse, EarthWeb broadens its content base
in a number of key IT segments, including networking and hardware. The
addition of MicroHouse's 20-person sales force enhances EarthWeb's ability to
sell a range of subscription-based products to corporate clients. Also
through the acquisition, EarthWeb expands its subscriber base from more than
3,500 to over 12,000.
The acquisition broadens the Company's subscription-based services, which
include ITKnowledge (http//www.itknowledge.com). Since its launch at the end
of the fourth quarter of 1998, ITKnowledge has attracted over 3,500 paid
subscribers. ITKnowledge contains the full text of leading technical
publishers, including IDG Books Worldwide, The Coriolis Group and Macmillan
Computer Publishing, among others.
About MicroHouse
MicroHouse provides IT professionals with electronic reference libraries
of hardware, networking and applications information. With the acquisition of
MicroHouse, EarthWeb broadens its reach in the networking and hardware
segments of the IT industry and supplements its existing content base in other
major IT segments, including software development, enterprise management and
Internet technologies/web development. In addition to its proprietary content
base, MicroHouse aggregates content from a range of hardware and software
providers, including 3Com, Adobe Systems, Computer Associates International,
IBM, Intel, Lotus Development, Netscape, Novell and Symantec.
More than 8,500 subscribers currently pay between $400 and $1,200 annually
to access MicroHouse's deep technical content. MicroHouse's products include
SupportSource and the MicroHouse Technical Library, which contain multi-vendor
content, such as technical diagrams, configuration tables, product manuals,
compatibility reports and software drivers.
Jack D. Hidary, EarthWeb President and CEO, stated, "We are very excited
to add MicroHouse to the EarthWeb portfolio of business-to-business online
services. MicroHouse gives us a powerful platform from which to access the
hardware and networking segments and greatly enhances our online content
offerings. Importantly, MicroHouse's success marketing its content products
on a subscription basis and the successful launch of ITKnowledge both
demonstrate that users will pay for access to rich technical content in a
business-to-business context."
David Katz, of Network Computing Devices, the leader in thin client
computing, with more than 600,000 devices installed worldwide and over 2
billion hours of software utilization, uses MicroHouse SupportSource to
support complex combinations of legacy and modern systems. "SupportSource is
a lifesaver," said Katz, "because our Fortune 500 Thinstar customers won't
accept any delay in keeping their mission-critical systems running. Even when
the problem doesn't relate to our product, they expect us to produce a
solution. That's where SupportSource is so handy."
Financial Terms
In connection with the acquisition of MicroHouse, the Company issued
50,856 shares of common stock at the closing and, pursuant to the terms of the
convertible note issued at closing, is to issue 126,475 shares of common stock
one year after the closing. The securities issued are restricted securities
under the Federal securities laws, with certain registration rights. The
Company will record a one-time charge of approximately $500,000 in the second
quarter of 1999, relating to the issuance of employee stock options. The
acquisition will be accounted for using the purchase method of accounting.
About EarthWeb
EarthWeb Inc. is the leading provider of Internet-based online services to
the information technology (IT) industry worldwide. Through its flagship
services, developer.com, Datamation and ITKnowledge, and its other integrated
business-to-business online services, including dice.com, EarthWeb connects
buyers to sellers, employers to employees, vendors to customers and technical
professionals to a wealth of expert knowledge. EarthWeb is a publicly held
company with headquarters in New York City.
This press release may be deemed to contain forward-looking information.
Any forward-looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements, including statements as to industry trends, future economic
performance, anticipated profitability, anticipated revenues and expenses, and
products or service line growth, may be significantly and materially impacted
by certain risks and uncertainties, including, but not limited to, failure to
meet operating objectives or to execute the operating plan, competition, and
other economic factors. Additional risks and uncertainties are described in
the Company's public filings with the Securities and Exchange Commission.
SOURCE EarthWeb Inc.
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Related links:
http://www.earthweb.com
CONTACT:
Irene Math, VP of Finance of EarthWeb,
212-725-6550; or General Info., Doug DeLieto, Analyst Info.,
Elisa Mailman, or Media Info., Claudine Cornelis, all of The
Financial Relations Board, 212-661-8030
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