IVillage.com Inc. to purchase Women.com Networks Inc. for 1.00 times revenue

Weekly Corporate Growth Report, Feb 19, 2001

The Deal: IVillage.com Inc. has agreed to purchase rival Women.com Networks Inc. for $30 million in cash and stock. The transaction is further evidence that the Internet cannot sustain several major ad-dependent sites catering to women's interest. After the news of the acquisition was announced, shares of Women.com inched up 3 cents to 72 cents, while iVillage.com shares also rose 3 cents to close at $1.72.

Discussion: Women.com Networks Inc. features 19 channels with more than 100,000 pages of content focusing on topics of importance to women, such as career, family, fashion, fitness, shopping and travel. Its channels also provide access to content from about a dozen magazines published by Hearst, including Cosmopolitan, Good Housekeeping and Redbook and Rodale Press' Prevention. The company derives more than 80 percent of revenue from advertising. Women.com Networks is the 1999 marriage of Women.com to Hearst's HomeArts.com and Astronet.

IVillage.com Inc. targets women ages 25-54 through more than 15 channels focusing on topics such as health, food and money. Its members can access services such as e-mail, message boards and chat rooms. One of the first Internet companies to target women, iVillage generates more than 90 percent of its revenue from sponsorships and advertising; it has shed its iBaby e-commerce operation. The company also owns Lamaze Publishing, educational information for mothers, online family forum Family Point and Web health community OnLine Psych.