TheGlobe.com Inc continued the build-out of its network of web sites yesterday with the $52.8m acquisition of its most prominent property so far – the Attitude Network, better known by two of its games web sites, Happy Puppy and Games Domain. New York-based theglobe.com says it will add some 2.4 million registered users to the 9.3 million it already has, although those figures, apparently compiled by a little-known ratings company called @Plan, could not be corroborated by theglobe. Attitude president, David Rae says Attitude Network recorded page views in December of just under 30 million and nine million visits, although some of those were repeat visitors.
The deal values Attitude at a total of $52.8m, based on theglobe’s closing price on Monday of $52.125. Theglobe is issuing 785,000 shares of its stock to Attitude’s shareholders and certain of its notes holders. Theglobe will also assume $5.1m of Attitude’s debt. Attitude’s warrants and options will be exercisable for about 64,000 shares of new theglobe.com stock.
Attitude’s users download samples of games and read the reviews from a team of reviewers. There are also games-oriented search engines, cheats and news about games at the sites. Happy Puppy, which is based in New York and Games Domain, based in Birmingham in the UK, will continue under their own names as part of the theglobe.com network. Rae says the acquisition of Attitude will give theglobe a significant European presence. He says its users have regularly expressed the desire to add their own content and comments to Happy Puppy and the other sites, but the company has not had the infrastructure in place to cope with it. Theglobe has that infrastructure, he says, and has removed any obstacles to Attitude’s planned growth.
The interesting thing about this deal is that the Attitude Network was one of the companies about to be subsumed into the maw of fish oil processing company and internet portal wannabe, Zapata Corp – sorry, Zap Inc – last year’s comical attempt to build an internet business out of nothing. Its acquisition by Zap having been announced in August 1998, Attitude managed to wriggle free when Zap announced in October that it was abandoning its internet strategy and all acquisitions it hadn’t yet closed. (Zap has subsequently dusted off its internet strategy for another go.) Rae says Attitude never changed operationally while the acquisition discussions were going on, so there was no real problem when the whole thing was called off. He would not say whether theglobe’s offer had a higher value that offered by Zapata, but says the difference is that all Zapata had was plans – theglobe has a name, infrastructure and the money to get things done.
Attitude’s other three sites, Console Domain, Multi Player Online Gaming and KidsDomain will probably be subsumed into the wide theglobe site, though no firm plans have been made for them. Rae says all the employees will be retained and the acquisition had already closed. The integration will starts soon and will be completed within a few months. In February this year theglobe acquired interactive department store called Azzaz.com from factorymall.com Inc for $18.5m in stock (02/02/99). The chairman of Attitude is Bill Rasmussen, who founded ESPN more than 20 years ago. Theglobe.com went public in November with a record- setting IPO, which close up 606% from its offer price on its first day (11/16/98). Its shares closed yesterday down $1.375 or 2.5% at $54.75.
