Beyond.Com and BuyDirect.Co Merge in $133M E-Commerce Stock Deal

Internet software superstore Beyond.com (Nasdaq: BYND) and BuyDirect.com, an online software retailer boosted by its relationship with C|Net, today announced that the two companies will merge in a stock-for-stock transaction.

The deal has been approved by both companies’ boards of directors and is expected to be completed by the end of March 1999. According to Mark Breier, president and CEO of Beyond.com, “Together, we now boast nearly 1 million cumulative customers and one of the most complete lists of portal, content and broadband partnerships in the industry.”

Why It Makes Sense for Beyond.Com

The merger is expected to boost Beyond.com’s position in the online retail industry, in the following key areas:

First, Beyond.com gains an exclusive software retailing relationship with @Home Network, a leading provider of broadband Internet access via the cable infrastructure, as well as a strategic alliance with XOOM.COM, a well-known Internet-based direct marketer site. “The combination will provide @Home subscribers with one of the largest offerings of high-speed digital download software available on the Web,” said Tom Jermoluk, Chairman and CEO, @Home Network.

Second, Beyond.com gets to add technology content providers CNET and ZDNet, to what the company termed, its “stable of partners.” BuyDirect.Com recently signed an agreement with ZDNet to become the principal online software retailer on ZDNet’s sites. As part of that agreement, BuyDirect.Com will have significant promotion and media on the ZDNet site. These additional capabilities complement Beyond.com’s recent announcements of e-commerce partnerships with top Internet destination sites, including America Online, Excite, Netscape and Yahoo!. Beyond.com also partners with four of the top eight software publishers — Autodesk, Microsoft, Network Associates and Netscape — to fulfill their online software orders.

Third, Beyond.com gains key additional engineering expertise in electronic software distribution, giving the company one of the industry’s largest pools of engineers with digital downloading experience.

And fourth, the acquisition provides Beyond.com with a strong customer base in the small office/home office (SOHO) market segment, complementing its existing customer base in the consumer, government agency and large corporate enterprise markets. In addition, Beyond.com gains more than 200,000 new customers from BuyDirect.Com.

The Management Shuffle

Mark Breier will remain Beyond.com’s president and CEO, and Michael Praisner will continue to serve as chief financial officer of the combined new company. Bong Suh, CEO of BuyDirect.com, will become vice president of corporate development for Beyond.com, focusing on developing additional large-scale partnerships. William Headapohl, president and CEO of BuyDirect.com, will become vice president of software and digital delivery for Beyond.com.

Beyond.com Business Overview

Beyond.com sells commercial, off-the-shelf software to the government enterprise, corporate and consumer markets. The company’s product line is reported to be approximately 44,000 software stock-keeping units (SKUs), with 5,600 SKUs available for immediate electronic delivery over the Internet.

Additionally, Beyond.com offers publishers transaction processing, physical and electronic order fulfillment, customer support, site design consultation, marketing support and e-commerce reporting.

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