GeoCities in Nasdaq push
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June 12, 1998: 11:36 a.m. ET
California-based Internet community builder files for IPO of $72 million
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NEW YORK (CNNfn) - GeoCities, a start-up Internet company that has invited millions of "homesteaders" to stake claims in topically themed communities on the Web's swashbuckling frontier, filed Friday for an initial public offering of $72.45 million in common stock.
GeoCities, based in Santa Monica, Calif., did not divulge the offering price for each of the shares, which will trade on the Nasdaq under the ticker symbol "GCTY."
The company said it intended to use proceeds from the IPO to enhance its technological infrastructure and invest in the GeoCities community site, one of the fastest-growing virtual communities of personal home pages on the World Wide Web.
GeoCities.com, the fourth most trafficked site on the Web among home users, has grown from 10,000 "homesteaders" in October 1995 to more than 1.9 million as of last month.
The site centers on more than 40 themed sectors, called "neighborhoods," with names like "Hollywood" (movies), "WallStreet" (finance), "Capitol Hill" (politics) and "Colosseum" (sports), where users are invited to "express themselves, share ideas, interests and expertise and publish content accessible to other users with common interests."
Yet while the terminology may be different, the concept of a virtual community is hardly novel: Other Internet service providers, including America Online, the nation's largest with 12 million subscribers, host dozens of specialty forums where like-minded users congregate.
Where GeoCities departs from the norm is its focus on personal Web home pages, which it provides free to each user, along with an e-mail account.
But the communities have yet to gain widespread acceptance -- something that GeoCities says is imperative if the company is to continue to attract the advertising revenue and membership fees it relies on to remain profitable.
GeoCities has not posted a profit in any quarter since its founding in December 1994. The company began generating advertising revenues only in mid-1996, it said in a filing Friday with the Securities and Exchange Commission. Last year, GeoCities posted a net loss of $8.9 million. In Friday's SEC filing, the company said it expects net losses to continue for the "foreseeable" future.
"The extent of these losses will be contingent in part on the amount of growth in the company's revenues, from advertising, commerce and premium membership service fees," GeoCities wrote in the filing.
The company added that increased quarterly revenues will be needed if the company hopes to become profitable.
The IPO's underwriters -- Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette Securities Corp. and Hambrecht & Quist -- have an option for an undisclosed number of shares in the case of excess allotment.
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