Yahoo! Acquires Encompass, Inc.
Yahoo! Acquires Encompass, Inc.
New PC Purchasers to Benefit from an Integrated, One-Button Internet Experience
SANTA CLARA, Calif. -- May 27, 1999 --Yahoo! Inc. (Nasdaq:YHOO) today announced it has acquired Encompass, Inc., a marketleader of software designed to give consumers easy and compellingaccess to the Web. Through relationships with Internet serviceproviders (ISPs) and Yahoo!, Encompass' custom-designed softwareenables PC manufacturers to give Internet users a fully integrated,all-in-one Internet solution. This acquisition supports Yahoo!'sstrategy to deliver consumers the best experience available onthe Web and expands the business services the company offersits strategic partners. Encompass currently serves the world'sleading PC and PC peripheral manufacturers and ISPs, includingAcer, CTX, Dell, Diamond Multimedia, Hewlett-Packard, Micron,Toshiba, Sony, AT&T, Earthlink and GTE. The acquisition,which is being accounted for as a pooling of interests, is valuedat approximately $130 million.
"Encompass integrates several traditionally disparateelements and enables us to give PC providers one comprehensivesolution that results in easier access to the best content andservices available on the Web and a better consumer Internetexperience, which is the foundation of Yahoo!'s business philosophy,"said Jeff Mallett, president and chief operating officer, Yahoo!."This acquisition further expands the business serviceswe offer our strategic partners, and is consistent with our PC,device and ISP independent business model."
Either integrated into the start experience of a new PC, or bundledon CDs shipped by device and software manufacturers, Encompassdelivers instant access to the Internet. Using a simple, integratedregistration process, Encompass provides consumers with ISP connectivityand a personalized My Yahoo! Internet experience. Consumers getconnected to the Internet in less than five minutes through anexperience that features customized content, and a step-by-stepInternet tutorial. During the same process, Encompass providesthe hardware, software, ISP or affinity partner with productregistration services, allowing them to capture detailed demographicinformation about their customers, and the ability to generaterevenue from affinity products and services. Encompass' end-to-endsolution also provides companies with an array of innovativecommunications platforms allowing them to leverage the Internetto communicate with their customers in a persistent and effectiveway. Consumers benefit from Encompass' custom browser that provideseasy navigation, commerce and communications services.
"We have teamed with Yahoo! for more than a year on an arrayof distribution agreements," said John Willcutts, presidentand CEO, Encompass. "This merger deepens our combined commitmentto deliver to consumers the easiest and most compelling experienceon the Web, while providing added value to hardware and devicemanufacturers, ISPs, and advertisers and merchants. Combined,Yahoo! and Encompass' services are distributed in partnershipwith eight of the world's 10 largest PC providers."
The Encompass acquisition complements Yahoo!'s business modeland Fusion Marketing Online™ (FMO) program in which it designsintegrated marketing programs for merchants and advertising clientsworldwide. FMO leverages Yahoo!'s traffic and database of morethan 47 million unique user registrations to provide targeted,customized and measurable marketing solutions for clients. Encompass'registered users, who have all recently purchased a PC and areeager to explore a wide variety of content and services on theWeb, are a highly desirable demographic for Yahoo!'s advertisingand merchant clients.
About Yahoo!
Yahoo! Inc. (Nasdaq: YHOO) is a global Internet media companythat offers a branded network of comprehensive information, communicationand shopping services to 60 million users worldwide. As the firstonline navigational guide to the Web, www.yahoo.comis the leading guide in terms of traffic, advertising, householdand business user reach, and is one of the most recognized brandsassociated with the Internet. The company's global Web networkincludes 18 world properties. Yahoo! has offices in Europe, theAsia Pacific, South America, Canada and the United States, andis headquartered in Santa Clara, Calif.
This announcement contains forward-looking statements thatinvolve risks and uncertainties including the ability to successfullyintegrate the two companies, and to realize the synergies andother perceived advantages resulting from this acquisition, includingYahoo!'s ability to grow its user and advertiser bases and toachieve expectations for anticipated financial results basedon the combined entity. More information about potential factorsthat could affect Yahoo!'s ability to make this acquisition successfuland continue to grow the business are included in Yahoo!'s AnnualReport on Form 10-K/A for the year ended Dec. 31, 1998 and Yahoo!'squarterly report on Form 10-Q for the three-months ended March31, 1999 including, without limitation, under the captions, "Management'sDiscussion and Analysis of Financial Condition and Results ofOperations," "Risk Factors," "Competition,"and "Proprietary Rights," which are on file with theSecurities and Exchange Commission. In addition, informationabout this transaction will be included in a Form S-3 to be filedwith the Securities and Exchange Commission (http://www.sec.gov).
