NEW YORK (CNNfn) - Online content and Web service company InfoSpace agreed to buy Web site network Go2Net Inc. for about $4 billion in stock Wednesday.|
InfoSpace (INSP: Research, Estimates), which offers services such as maps, classified ads and telephone listings on the Web, will pay 1.82 shares of its own stock for each outstanding share of Go2Net. Go2Net (GNET: Research, Estimates) has about 42 million shares outstanding.
The deal values Go2Net at about 86-7/8 per share, a 43 percent premium over its closing price Wednesday of 60-9/16. Shares of InfoSpace closed at 47-3/4.
"I originally invested in Go2Net because they offer superior technology and share my vision for the broadband world," said investor Paul G. Allen, chairman of Vulcan Ventures and Microsoft co-founder in a statement. "Combining these companies will create and unparalleled infrastructure company. We consider this to be very strategic to our overall vision for the Wired World."
The boards of both Redmond, Wash.-based InfoSpace and Seattle-based Go2Net have approved the deal.
The transaction is subject to shareholder approval, but Vulcan Ventures, Go2Net Chairman and CEO Russell Horowitz and other Go2Net executives comprising about 40 percent of Go2Net's shares, will vote for the deal. InfoSpace Chairman Naveen Jain and other InfoSpace board members who hold 40 percent of InfoSpace's shares, will also approve the deal.
The deal is expected to be completed by the fourth quarter of 2000.
Go2Net had sales of just $22.1 million in 1999 and 225 employees. The company lost more than $10 million in that year.
InfoSpace had sales of nearly $37 million and lost $21.7 million. The company has about 450 employees.