FOR IMMEDIATE RELEASE
Excite@Home To Acquire Bluemountain.com Acquisition of category leader extends reach, e -commerce and broadband subscriber opportunities REDWOOD CITY, CA/BOULDER, CO. -- October 25, 1999 -- Excite@Home (Nasdaq: ATHM) and Blue Mountain Arts Publishing Company today announced a definitive agreement in which Excite@Home will acquire Bluemountain.com, the leader in Web-based greeting cards and event-driven commerce services for approximately $780 million in cash and stock. This acquisition of one of the most popular services online increases the reach of the Excite@Home audience to approximately 34%, an increase of 40%, creates electronic commerce opportunities with every greeting card sent, and via Bluemountain.com's 9M unique monthly users greatly expands the Company's opportunity to generate new subscribers of the @Home consumer broadband service. Under the terms of the agreement, Excite@Home will issue approximately 11 million shares, valued at approximately $430 million, and $350 million in cash. The Company will also assume all outstanding employee options. This transaction is expected to close before the end of the year. Separately, Excite@Home announced distribution agreements with Proflowers.com, a leading provider of Internet floral goods, Dan's Chocolates (a former subsidiary of Bluemountain.com), and Lucidity Inc. where the three companies will pay Excite@Home a combined minimum of $34 million in advertising fees over a period of three years. "Perhaps more than any other site on the Web, Bluemountain.com has done an incredible job of creating viral growth around occasion-driven commerce; they are the undisputed leader in the electronic greeting card space," said George Bell, president, Excite@Home. "Simply on the strength of the appeal of their content, and without any marketing or distribution relationships, Bluemountain.com has become one of the most popular sites on the Web, with an audience of loyal users that generates huge page views aimed at one URL -- not random surfers. We will continue to support this loyal community with strong differentiated content while offering consumers new services that range from online calendars to electronic commerce to broadband services. For Excite@Home, this acquisition promises to be a significant platform for future growth in both narrow and broadband content to generate increases in registered users, @Home broadband subscribers and revenue." "Excite@Home can provide our loyal community with more services to enhance the culture we've created," said Mark Rinella, Vice President and General Manager of Bluemountain.com. "Bluemountain.com poetry and whimsical greetings help people of all ages and cultures to communicate their feelings with family and friends. It has always been our mission to bring people closer together through the Internet." Continued Bell, "Our leadership in turning page views into revenue and in truly understanding direct marketing, using our Matchlogic and Enliven divisions, is well known. Now, every greeting card represents an event-based commerce opportunity. By leveraging our targeting technologies, we expect to bring the Blue Mountain community the right purchasing opportunities at the right time associated with their greeting card selections." MAXIMIZING THE OPPORTUNITY - NARROWBAND AND BROADBAND Currently the 14th most-trafficked Web property according to Media Metrix, Bluemountain.com expects to see significant growth during the holiday season, typically its busiest time of year and when the company has historically seen its largest surge in traffic. Contingent upon the achievement of strong traffic, reach, and other performance targets over the holiday season, there may be an additional payment of up to $270 million to be issued in shares of Excite@Home. Bluemountain.com currently ranks third among e-commerce sites, behind Amazon.com and Ebay, and has been consistently in the Top 15 Web Properties in the past year. In early 1999, it was the top e-commerce destination on the Web for four consecutive months. (Media Metrix, Feb-May 99). Bluemountain.com currently services more than one million transactions per day relating to gift-giving events, more than Amazon.com, and its audience is 55% more likely to shop online than the average Web audience and over 70% more likely to purchase. (@Plan, Fall 1999) Bluemountain.com leads the Web-based greetings cards category, having more than 65% of the electronic greeting cards market and more audience reach than all of its competitors combined. Exhibiting some of the strongest organic growth on the Web, Bluemountain.com has grown to more than nine million unique users per month in their three-year history. (Media Metrix, September, 1999.) For the Excite.com narrowband portal, this acquisition brings reach, a chance to monetize significant new page views -- each with an event-focus - while exposing the large and unique Bluemountain.com audience to Excite's leading personalization and communications services. Blue Mountain users are actively engaged with the site in either sending or receiving a greeting card, as opposed to a home page-building site where most of the users are just surfing from a search engine. This creates a significant opportunity for Excite@Home to cross-sell and offer Excite products and the @Home broadband service. Excite@Home will provide Bluemountain.com customers with those services they have most frequently requested: email, calendering, online address books and other related communication services. For example, when the Excite Calendar reminds a user that it is her mother's birthday, she will also be presented with the opportunity to send her a greeting card or gift. Blue Mountain greeting cards will also be widely promoted across the Excite portal service and the @Home broadband service. Excite@Home plans to leverage the Bluemountain.com audience reach and page views almost immediately to create more Excite@Home registered users, broadband subscribers and, ultimately, revenues. With the company's proven ability to monetize Web traffic, Excite@Home will package Blue Mountain's millions of daily page views for advertisers, monetizing a portion of total page views with advertisements and giving advertisers the opportunity for targeted exposure. Excite@Home plans to enhance e-commerce throughout the Blue Mountain site as appropriate, giving users the opportunity to send gifts when they are sending free greeting cards. For example, bluemountain.com users sending a free Mother's Day card will soon have the opportunity to also buy and send their mother a gift or flowers at the same time. The Bluemountain.com service provides a strategic opportunity to accelerate @Home service adoption by exposing millions of unique users to the benefits of a rich media experience enhanced by the broadband platform. The demographics of the bluemountain.com audience -- generally older, more experienced and heavy home users -- are consistent with the demographics of residential broadband Internet access customers. Targeting the largest and fastest growing broadband subscriber base, broadband content developers will be able to take advantage of Bluemountain.com's wealth of content to create dynamic, interactive greeting cards and e-commerce applications. A recent survey by Mercer Management Consulting found that people with high-speed Internet connections make twice as many purchases online as people with low-speed dial-up modems. Creators of cards, in a broadband environment, can take advantage of unique features such as animation, video and audio. In addition, Excite@Home will package the @Home residential-service as a gift-giving opportunity on Bluemountain.com. CORNERSTONE OF COMMUNICATIONS PLATFORM FOR EXCITE@HOME USERS Underscoring the Company's strategy of delivering personalized, rich content "All Band, All Device, All the Time," Excite@Home will continue to build out its communications services and integrate different offerings. For example, Blue Mountain's greeting cards plan to be integrated into Excite@Home's different existing services including email, calendaring, address books, VoiceMail, VoiceChat and Excite Clubs. ABOUT BLUEMOUNTAIN.COM Bluemountain.com is the leading communication site on the Internet featuring the best known and most widely used electronic greeting cards in the world. With 30 years of publishing experience, Blue Mountain Arts is now pioneering the electronic greeting card industry with a 65% share of the market. The company's web site hosts millions of loyal users, making it the most trafficked privately held site on the Internet. Spanish, French, Italian, Portuguese, Chinese, Japanese, and Korean versions of the Blue Mountain web site are available at www.monteazul.com, www.montbleu.com, www.it.bluemountain.com, www.pt.bluemountain.com, and www.chi.bluemountain.com, www.jp.bluemountain.com, and www.kr.bluemountain.com. To visit the popular site, please go to www.bluemountain.com. About Excite@Home Excite@Home (Nasdaq: ATHM) is a global media company based in Redwood City, Calif. Through the company's narrowband portal, Excite (www.excite.com), and broadband services @Home and @Work, the company uniquely offers consumers content and interactive services across both narrowband and broadband. The rich media advertising and database marketing solutions of Enliven (www.enliven.com) and MatchLogic (www.matchlogic.com) offer advertisers highly targeted interactive marketing and reporting services across all platforms of delivery. Leveraging the high-speed, always-on attributes of cable, Excite@Home empowers unique multimedia applications that go beyond current Web experiences. The company will combine the Excite brand -- one of the best-known names on the Internet with 70 percent recognition among Web users -- with the @Home broadband service's broad distribution, a worldwide footprint of 67 million cable homes, to deliver on its vision of "All Band, All Device, All the Time." For more investor information about Excite@Home, please call our stockholder services hotline at 1.888.924.9248.
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Excite@Home, @Home, and the @ logo are trademarks of the AtHome Corporation and may be registered in certain jurisdictions. All other brands and products are trademarks of their respective companies. Brand recognition statistics quoted are from Frank N. Magid and Associates, Inc. (1/99). This press release contains forward-looking statements that involve risks and uncertainties, including those relating to the Company's ability to grow its subscriber or user base from users of Bluemountain.com, the Company's ability to generate incremental users and revenues from bluemountain.com, the number of bluemountain.com users who use Excite@Home's other services, the Company's ability to generate revenues from bluemountain.com products, the likelihood of bluemountain.com users to purchase goods and services and integration of Bluemountain.com services with Excite@Home. Actual results may differ materially due to a number of factors, including the increasingly competitive environment for Internet advertising sales and e-commerce services; uncertainty as to whether users of Bluemountain.com will continue to use Blue Mountain services after the acquisition, particularly as the service is changed to support the generation of e-commerce and advertising revenue; the extent to which Excite@Home will experience sustained growth in users as a result of the acquisition, as these users may not accept any additional services or products offered by Excite@Home; the extent to which Blue Mountain users will purchase goods and services in addition to sending greeting cards, which are free of charge; whether Blue Mountain's greeting card services or products will continue to be used at the same rates or in the same seasonal patterns as in the past and whether competitive card services will achieve market acceptance and divert users from Bluemountain.com. In addition, as with any acquisition, acquisitions involve numerous risks relating to the integration of previously independent services, technologies, employees and corporate cultures, and Excite@Home may not be able to meet these challenges successfully. Reported results should not be considered as an indication of future performance. The matters discussed in this press release also involve risks and uncertainties described in Excite@Home's filings with the Securities and Exchange Commission. Excite@Home assumes no obligation to update the forward-looking information contained in this press release.