iVillage, Women.com to Merge

N E W   Y O R K, Feb. 6 -- IVillage and Women.com announced a plan to mergeMonday, consolidating two popular but financially strugglingdestinations for women on the Internet.

Technically, iVillage is buying Women.com for $25 million instock and some cash, but the combined company is getting a bighelping hand from Women.com’s largest shareholder, the women’smagazine publisher and media conglomerate Hearst Corp.

Hearst is giving iVillage a $20 million cash infusion and isalso promising to buy at least $15 million in production andadvertising services over the next three years. Hearst, which owns46 percent of Women.com, will wind up with about 30 percent of thecombined company.

Women.com uses material from several of Hearst’s magazines,including Cosmopolitan, Good Housekeeping and Redbook.

Both iVillage and Women.com went public in 1999 at the height ofthe Internet craze, but shares in both companies have dwindledsince then.

IVillage also reported earnings late Monday and warned that itsrevenues in the first quarter of 2001 would decline by 25 percentdue to a slowdown in advertising. Its fourth-quarter net lossshrank to $10 million from $30 million in the same period a yearago.

Both announcements were made Monday evening after stock tradinghad closed. IVillage’s shares, which had traded at more than $100in April 1999, ended regular trading up 3 cents at $1.72 on theNasdaq Stock Market.

Shares in Women.com, which were in danger of being delisted fromthe Nasdaq since they traded below $1 per share, were also up 3cents in regular trading at 72 cents. The shares had been above $20last fall.