Yahoo agreed to acquire Geocities on Thursday for an estimated $3.5 million in stock, in a move that will see two of the Web?s largest players joining up.
Yahoo is a portal site supplier, while Geocities is the most popular of the Web?s socalled community sites. Its smaller competitor, ICQ, was snatched up by America Online (AOL) last June.
Tim Bajarin, president of research firm, Creative Strategies, said: "One of the things [Geocities] brings to the table is personalisation." The site enables users to create their own free home page, a feature that is likely to appear on Yahoo.com shortly.
According to market research firm, Media Metrix, the merger will result in a Web site with a huge user base. Some 58.1 per cent of all US Web users - the equivalent of 33 million - visited either site during November, 1998.
This currently beats front runner, AOL, although the tables will be turned when AOL.com is integrated with Netscape?s Netcenter. The two had 38.2 million visitors in November.
But Yahoo?s key competitors are now all aligned with broadband Internet access providers. AOL has just closed a major deal with Atlantic Bell to provide broadband Digital Subscriber Line (DSL) services, while broadband access company, @Home, snatched Excite in a $6.7 billion deal last week.
Bridget Leach, an analyst with Giga Information Group, said: "I don?t really think Yahoo needs to pick an [access] player at this time."
Shares in both companies climbed following the news. Yahoo?s stock rose 9.5 per cent at $367.75, while Geocities? share price shot up 56 per cent to $117.25.
(see analysis section for further details)
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