Internet Consolidation Heats Up with Excite@Home, Digital Island Deals

Strategic Insights

Oct 25, 1999 — 1 min read

Excite@Home, a leading internet portal and high-speed access service, has announced its plan to acquire Blue Mountain Arts, the largest online greeting card provider, in a deal valued at approximately $780 million. This move comes as Digital Island, a provider of internet services to businesses, has agreed to acquire Sandpiper Networks, a specialist in technology that improves web site content delivery, for around $870 million. These acquisitions signal a rapid consolidation in the internet sector, with market leaders leveraging high stock prices to extend their leads.

Key Takeaways:

Excite@Home is acquiring Blue Mountain Arts, a leading online greeting card provider, in a stock and cash deal valued at approximately $780 million.
The acquisition is expected to broaden Excite@Home's audience reach and create opportunities for advertising and e-commerce revenues.
Digital Island is acquiring Sandpiper Networks, a privately held specialist in technology that improves web site content delivery, for stock valued at approximately $870 million.
The deal should "put to bed rumors and speculation" about Excite@Home's future, according to Chairman and Chief Executive Tom Jermoluk.
Blue Mountain Arts ranks third in the most popular consumer-oriented e-commerce sites, according to Media Metrix.
Digital Island's shares jumped 38 percent on news of the deal, trading at $31 3/4.
Excite@Home said it is in an "aggressive growth mode" following the acquisition of Blue Mountain Arts.

Statistics:

$780 million: The valuation of the Excite@Home and Blue Mountain Arts deal.
$870 million: The valuation of the Digital Island and Sandpiper Networks deal.
38 percent: The increase in Digital Island's shares on news of the deal.
$31 3/4: The trading price of Digital Island's shares following the announcement.
Third: The ranking of Blue Mountain Arts in the most popular consumer-oriented e-commerce sites, according to Media Metrix.

Sources:

Financial Times Limited, 1999.

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