@Home Buys Narrative for $90M

Author:
Publish date:

@Home Network underscored its interest in broadband
advertising last week, opting to acquire Narrative Communications Corp. for $90 million in
stock.

Narrative, based in Waltham, Mass., is a leading provider
of software that creates interactive-advertisement displays on Web pages.

The deal, which is expected to close by year-end, will form
what @Home is calling the "Enliven Business Unit," referring to the brand name
of Narrative's software.

Both companies said the deal has everything to do with
"rich-media advertising," meaning ads that are TV-like in their sophistication,
with the deep targeting associated with the Internet.

Ad agencies and major advertisers including General Motors
Corp., Hewlett-Packard Co., IBM Corp., Procter & Gamble Co. and Sprint Corp. are
already using Narrative's technology to increase the effectiveness of their online
presences, executives said.

The deal also means that @Home instantly becomes a one-stop
shop for interactive Web-advertising campaigns across the continuum of Internet
connections, said Charles Moldow, vice president, @Media sales and marketing for @Home.

Moldow added that advertisers will have the option of
conducting "large-scale, highly interactive rich-media" advertising campaigns
across a variety of Internet distribution channels, including standard dial-up, telco
high-speed, @Home broadband personal computer and TV set-top connections.

Hilmi Ozguc, cofounder and CEO of Narrative, said he hopes
to establish Enliven as the standard for rich-media ads.

"Ultimately, this is all about commerce," Ozguc
said. "It's the ability to see an advertisement ... to drill down to learn more about
it and, if you like what you see ... to buy it."

Ozguc described Narrative as already owning a 60 percent to
65 percent market share in the rich-media advertising market. "Granted, that's a
small portion of the ad dollars spent today," he acknowledged.

Under the terms of the merger agreement, @Home will acquire
all outstanding shares and assume all outstanding options and warrants of Narrative in
exchange for 1.34 million to 1.55 million shares of @Home common stock, based on its
closing price.

@Home would issue 1.34 million shares in the merger, valued
at approximately $89 million, based on the closing price of its common stock last
Thursday.

Related