Excite@Home Buys Blue Mt. Eyeballs

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Excite@Home Corp.'s deal to pay $780 million or more foronline-greeting-card giant Blue Mountain Arts Inc. netted a lot more than animatedHalloween and Gandhi's birthday wishes.

In Boulder, Colo.-based Blue Mountain, Excite@Home lastweek grabbed one of the most-visited commercial sites on the Internet, and it sees as theopportunity to leverage that traffic into more subscriptions for its broadband-accessservice and more online product sales.

The Bluemountain.com Web site attracts some 9 millionvisitors monthly, making it one of the 15 most-visited sites on the Internet. It holds anestimated 65 percent of the booming market for online greeting cards.

According to Web market watcher Media Metrix Inc., BlueMountain trailed only retailer Amazon.com Inc. and auction site eBay Inc. amongelectronic-commerce sites, even though it does not charge for its products.

Bluemountain.com also handles some 1 million daily onlinetransactions related to gift-giving events and an international spectrum of known eventsand holidays, including AIDS Awareness Week, Flute Day, the Tibetan Buddhist New Year andGirl Scouts founder Juliette Low's birthday.

Excite@Home president George Bell said the acquisitionenables his company to create new e-commerce opportunities with Blue Mountain's existingcustomer base, plus new services such as online calendars.

Because many of the site's cards are sent in conjunctionwith gift-giving opportunities, Bell wants to add a concurrent ability for the sender tobuy and send gifts, flowers or anything that generates revenue.

Besides its English-language site, Blue Mountain alsomaintains versions of its greeting-card sites in Spanish, French, Italian, Portuguese,Chinese, Japanese and Korean.

Blue Mountain was founded in 1971 as a poster-printingbusiness by Steven Schutz and his wife, Susan Polis Schutz, a physics expert and a poet,respectively. The company also has an established "meat space" business as apublisher of poetry books by authors ranging from the unknown to Leonard Nimoy.

Excite@Home will issue about 11 million new common shares,worth some $430 million, and pay another $350 million cash for Blue Mountain. BlueMountain could also get up to another $270 million in stock if it meets certainperformance targets over the coming holiday season.

The companies said they expected to close the deal beforeyear's end.

Excite@Home last week also padded its e-commerce lineup andinvestment portfolio, announcing three-year distribution agreements totaling $34 millionin fees with Internet retailers Proflowers.com, an online florist; candy purveyor Dan'sChocolates; and Lucidity Inc., a provider of online private-label gift certificates.

Excite@Home also made undisclosed investments in Proflowersand Lucidity.

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