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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 2000.
REGISTRATION NO. 333-39230
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO.1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TICKETMASTER ONLINE-CITYSEARCH, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 95-4546874
(State or Other Jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
790 E. COLORADO BOULEVARD, SUITE 200
PASADENA, CALIFORNIA 91101
(626) 405-0050
(Address Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
JOHN PLEASANTS
CHIEF EXECUTIVE OFFICER
790 E. COLORADO BOULEVARD, SUITE 200
PASADENA, CALIFORNIA 91101
(626) 405-0050
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copies to:
Kenneth M. Doran, Esq. Steven J. Tonsfeldt, Esq.
Gibson, Dunn & Crutcher LLP Mark W. Seneca, Esq.
333 South Grand Avenue Venture Law Group
Los Angeles, California 90071 2800 Sand Hill Road
(213) 229-7000 Menlo Park, California 94025
(650) 854-4488
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
___________________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / _____________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE>
-----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
===============================================================================
<PAGE>
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED JUNE 28, 2000
1,865,434 SHARES
TICKETMASTER ONLINE-CITYSEARCH, INC.
CLASS B COMMON STOCK
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This prospectus relates to the public offering of 1,865,434 shares of Class B
Common Stock, par value $.01 per share, of Ticketmaster Online-CitySearch, Inc.
which are held by certain of our current stockholders or which will be held upon
the exercise of warrants to purchase shares of our Class B Common Stock.
Pursuant to an agreement among us and certain of the selling stockholders, the
number of shares held by the selling stockholders and offered hereby may be
adjusted prior to the time of effectiveness of the registration statement of
which this prospectus forms a part. For more detailed information, see "Summary
-- Recent Developments." This offering will not be underwritten.
The prices at which these stockholders may sell the shares will be determined by
the prevailing market price for the shares or in negotiated transactions. We
will not receive any of the proceeds from the sale of the shares.
Our Class B Common Stock is listed on the Nasdaq National Market under the
symbol "TMCS." On June 26, 2000, the last reported sale price of our Class B
Common Stock was $17.00 per share.
Investing in the Class B Common Stock involves risks. See "Risk Factors"
beginning on page 6.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful and complete. Any representation to the contrary is
a criminal offense.
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You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our Class B Common Stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of the Class B Common Stock.
In this prospectus, references to "Ticketmaster Online-CitySearch," "we," "us"
and "our" refer to Ticketmaster Online-CitySearch, Inc. and its subsidiaries.
The date of this prospectus is June __, 2000
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer and sale is not
permitted.
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TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.............................................1
THE COMPANY....................................................1
THE OFFERING...................................................4
RISK FACTORS...................................................6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............22
USE OF PROCEEDS...............................................23
SELLING STOCKHOLDERS..........................................23
PLAN OF DISTRIBUTION..........................................25
LEGAL MATTERS.................................................26
EXPERTS.......................................................26
WHERE YOU CAN FIND MORE INFORMATION...........................26
INCORPORATION OF DOCUMENTS BY REFERENCE.......................26
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PROSPECTUS SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING THE CONSOLIDATED FINANCIAL
STATEMENTS AND THE NOTES TO THE FINANCIAL STATEMENTS AND OTHER INFORMATION
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
THE COMPANY
Ticketmaster Online-CitySearch, Inc. is a leading local portal and
electronic commerce company that provides in-depth local content and services to
help people get things done online. We offer practical tools for living that
make the Internet an important part of people's everyday lives. Our principal
operations are online city guides, online ticketing and online personals. Our
family of Web sites includes citysearch.com, ticketmaster.com, match.com,
museumtix.com, ticketweb.com, cityauction.com, astroabby.com and livedaily.com,
among others. In September 1998, our company was created by combining
CitySearch, Inc. and Ticketmaster Multimedia Holdings, Inc. (Ticketmaster
Online), then a wholly-owned online subsidiary of Ticketmaster Corporation, to
create Ticketmaster Online-CitySearch, a leading provider of local city guides,
local advertising and live event ticketing on the Internet.
CitySearch was incorporated in September 1995 and launched its first
local city guide in May 1996. Ticketmaster Online was formed in 1993 to
administer the online business of Ticketmaster Corporation and began selling
live event tickets and related merchandise online in November 1996. Subject to
specified limitations, our ticketmaster.com service is the exclusive agent of
Ticketmaster Corporation for the online sale of tickets to live events presented
by Ticketmaster Corporation's clients.
In 1999, we acquired CityAuction, Inc. (cityauction.com), an online
auction company, Match.com, Inc. (match.com) and Web Media Ventures, LLC (d/b/a
One & Only Network), which are both online personals services, and
astroabby.com, an online horoscope service. We are continuing to grow each of
these operations in their own right and we are also integrating their services
with our citysearch.com city guides. In addition, in 1999, we acquired the arts
and entertainment portion of The Microsoft Network (MSN) Sidewalk (sidewalk.com)
city guides, significantly expanding the reach of our citysearch.com city
guides. We have integrated the Sidewalk city guides with the citysearch.com city
guides to create a nationwide network. In January 2000, we acquired 2b
Technology, Inc., a Richmond, Virginia based visitor management software
developer and offline and online ticketing company targeted at venues such as
higher volume museums, cultural institutions and historic sites. In May 2000, we
acquired TicketWeb Inc., a ticketing company whose browser-based ticketing
software allows venues and event promoters, including symphony concerts, clubs,
museum exhibitions, amusement parks and film festivals, to perform box-office
operations remotely, over the Internet. We intend to continue to make strategic
acquisitions as appropriate opportunities become available.
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Our portfolio of Web sites includes: citysearch.com, ticketmaster.com,
match.com, museumtix.com, ticketweb.com, cityauction.com, livedaily.com,
astroabby.com and jobs.citysearch.com, which are described in more detail below.
- CITYSEARCH.COM is a network of local portal city guide sites that
offer primarily original local content for major U.S. and foreign
cities as well as practical transactional tools to get things done
online. The city guides provide up-to-date, locally produced
information about a city's arts and entertainment events, bars and
restaurants, recreation, community activities and businesses
(shopping and professional services), as well as local news,
sports and weather updates. citysearch.com city guides also let
people act on what they learn by supporting online business
transactions, including ticketing, reservations, auctions,
matchmaking, merchandise sales and classifieds. With our recent
acquisition of the arts and entertainment portion of the MSN
Sidewalk (sidewalk.com) city guides, citysearch.com now reaches
more than 70 cities worldwide.TICKETMASTER.COM is the leading
online ticketing site and live event portal. Through our exclusive
arrangement with Ticketmaster Corporation, ticketmaster.com
provides tickets for more than 100 professional sports franchises
and more than 3,750 leading arenas, stadiums, performing arts
venues and theaters. The site also offers in-context,
entertainment-related merchandise, including CDs, apparel and
memorabilia through STORE.TICKETMASTER.COM.
- TICKETMASTER.COM is the leading online ticketing site and live
event portal. Through our exclusive arrangement with Ticketmaster
Corporation, ticketmaster.com provides tickets for more than 100
professional sports franchises and more than 3,750 leading arenas,
stadiums, performing arts venues and theaters. The site also
offers in-context, entertainment-related merchandise, including
CDs, apparel and memorabilia through STORE.TICKETMASTER.COM.
- MATCH.COM is a leading online matchmaking and dating service which
offers single adults a convenient, fun and private environment for
meeting other singles. In combination with the One & Only Network,
another online personals company we acquired in 1999 and which we
are integrating with match.com (the combined operations to be
called match.com), match.com has more than 4 million user
registrations and approximately 560,000 active users, generating
more than 100 million monthly page views. In addition, as part of
our recent transaction with Microsoft, match.com has become the
premier provider of online personals and matchmaking services on
The Microsoft Network (MSN).
- MUSEUMTIX.COM is 2b Technology's online ticketing site, providing
information and ticketing for cultural institutions and other
venues, including museums, zoos, aquariums and planetariums.
- TICKETWEB.COM is TicketWeb's online ticketing site, allowing users
to purchase tickets for events and venues including museums,
amusement parks, festivals, local clubs, symphony concerts and
zoos. TicketWeb's browser-based ticketing software allows clients
to manage the sale of their tickets remotely from a home or office
computer.
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- CITYAUCTION.COM is a person-to-person online auction service that
provides a local resource for online auctions. In addition to
national and regional auctions, cityauction.com lets users post
and search for items in their own locality, allowing them to trade
items that would be considered too valuable or difficult to
transport, such as televisions or furniture. Cityauction.com is a
member of the FairMarket, Inc. network of auction sites. Buyers
and sellers using cityauction.com have access to all of the
auctions listed in the FairMarket network of auction sites,
including listings from users of many of the largest internet
portal Web sites.
- LIVEDAILY.COM is our daily online live entertainment news webzine
that offers music fans daily concert and music news, tour
announcements, reviews, interviews and exclusive national
ticketing information. livedaily.com users benefit from direct
connections to our ticket distribution network at ticketmaster.com
and local music information via citysearch.com's growing network
of city guides.
- ASTROABBY.COM is an entertaining and informative horoscope site
that provides free weekly and monthly astrology forecasts, as well
as astrology advice.
- JOBS.CITYSEARCH.COM is our online source of employment classifieds
and specialists that can be viewed by city to make job searching
efficient and effective.
We have two classes of authorized Common Stock outstanding, Class A
Common Stock and Class B Common Stock. The rights of the holders of Class A
Common Stock and Class B Common Stock are substantially identical, except with
respect to voting, conversion and transfer. Except as otherwise required by
applicable law, each share of Class A Common Stock entitles its holder to 15
votes and each share of Class B Common Stock entitles its holder to one vote on
all matters submitted to a vote or for the consent of stockholders. Except as
otherwise required by applicable law, the Class A Common Stock and the Class B
Common Stock vote together as a single class on all matters submitted to a vote
or for the consent of stockholders. We have also authorized Class C Common Stock
which is nonvoting and of which no shares are issued and outstanding.
We are currently a direct, majority-owned subsidiary of Ticketmaster
Corporation, an Illinois corporation, which is an indirect, wholly-owned
subsidiary of USA Networks, Inc., a Delaware corporation, which is referred to
in this prospectus as USAi. USAi beneficially owns 43,782,544 shares, or
approximately 49.9%, of our total outstanding Common Stock, representing
approximately 82.3% of the total voting power of the outstanding Common Stock.
Our principal executive offices are located at 790 E. Colorado
Boulevard, Suite 200, Pasadena, California 91101, and our telephone number at
that address is (626) 405-0050.
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RECENT DEVELOPMENTS
On May 26, 2000, we acquired all of the outstanding shares of
capital stock of TicketWeb Inc., a Delaware corporation, for a purchase price
of approximately $35.2 million, including the assumption of options and
warrants previously issued by TicketWeb. At the closing, we issued 1,845,439
shares of Class B Common Stock to certain of the former stockholders of
TicketWeb, representing a value of approximately $32.7 million based upon the
average of the closing price of our Class B Common Stock on the Nasdaq
National Market for the seven trading days ended May 24, 2000, which average
was $17.72. We paid cash to the remaining former stockholders of TicketWeb.
We also assumed certain existing warrants and options previously issued by
TicketWeb. As of May 31, 2000, there were 25,196 shares of our Class B Common
Stock issuable upon exercise of those warrants. The number of shares issued
at closing and the number of shares issuable upon exercise of the options and
warrants we assumed was subject to adjustment based on the average of the
closing price of our Class B Common Stock on the Nasdaq National Market for
the seven trading days ended two days prior to the filing of the request for
acceleration of effectiveness of the registration statement of which this
prospectus forms a part; provided that the per share price used to calculate
the adjustment could not be greater than $19.50 nor less than $15.95, which
were the maximum and minimum share prices to be used in the adjustment as
agreed by us and TicketWeb. Pursuant to such adjustment, on June 27, 2000, we
issued an additional 1,262 shares of Class B Common Stock to the former
warrant holders of TicketWeb and 6,493 shares of the Class B Common Stock
issued to the former stockholders of TicketWeb at closing were cancelled. We
are registering hereby the 1,865,434 shares of Class B Common Stock issued to
the former warrant holders and stockholders of TicketWeb at closing and
subject to the post-closing adjustment. We will register the sale of the
shares of Class B Common Stock underlying the options we assumed in
connection with the acquisition of TicketWeb pursuant to a separate
Registration Statement on Form S-8.
THE OFFERING
THE FOLLOWING SUMMARIZES THE SELLING STOCKHOLDERS' OFFERING OF OUR CLASS B
COMMON STOCK.
<TABLE>
<S> <C>
Class B Common Stock to be offered
by the selling stockholders................................................ 1,865,434 shares
Common Stock to be outstanding after the offering:
Class A Common Stock.............................................. 49,143,987 shares
Class B Common Stock.............................................. 38,598,207 shares
Total Common Stock................................................ 87,742,194 shares
Use of Proceeds............................................................ We will not receive any proceeds from
the sale of the shares.
Nasdaq National Market Symbol.............................................. TMCS
</TABLE>
The information concerning outstanding Common Stock above is as of
June 27, 2000. Each share of Class A Common Stock automatically converts into
one share of Class B Common Stock upon transfer to anyone other than another
holder of Class A Common Stock.
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Unless otherwise stated, all information contained in this prospectus
excludes:
(1) 1,444,870 shares of Class A Common Stock issuable upon the
exercise of options outstanding at May 31, 2000 at a weighted
average price of $4.99 per share under our 1996 Stock Plan;
(2) 2,839,384 shares of Class B Common Stock issuable upon the
exercise of options outstanding at May 31, 2000 at a weighted
average price of $27.89 per share under our 1998 Stock Plan;
(3) 5,287,458 shares of Class B Common Stock issuable upon the
exercise of options outstanding at May 31, 2000 at a weighted
average price of $30.34 per share under our 1999 Stock Plan;
(4) 130,590 shares of Class B Common Stock issuable upon the
exercise of options outstanding at June 27, 2000 under
TicketWeb's 2000 Stock Plan, which we assumed in connection
with our acquisition of TicketWeb;
(5) an aggregate of 2,711,726 shares of Class B Common Stock
available for future grant or issuance as of May 31, 2000
under our 1998 Stock Plan, our 1999 Stock Plan and our 1998
Employee Stock Purchase Plan; and
(6) 4,500,000 shares of Class B Common Stock issuable upon the
exercise of warrants issued to Microsoft Corporation in
connection with our acquisition of the assets of Sidewalk.com.
The price per share with respect to 1,500,000 of such shares
is $60 per share. The price per share with respect to the
remaining 3,000,000 of such shares is $30, subject to
reduction by $1/16 for each $1/16 by which the fair market
value of a share of Class B Common Stock exceeds $30.
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RISK FACTORS
An investment in our Class B Common Stock offering is very risky. You
should carefully consider the following risk factors in addition to the
remainder of this prospectus before purchasing the Class B Common Stock. This
prospectus contains forward-looking statements that involve risks and
uncertainties. Many factors, including those described below, may cause actual
results to differ materially from anticipated results.
WE HAVE A HISTORY OF LOSSES, WE EXPECT FUTURE LOSSES AND WE CANNOT ASSURE YOU
THAT WE WILL ACHIEVE OR MAINTAIN PROFITABILITY.
We incurred net losses of $17.2 million, $121.4 million and $48.6
million for the eleven months ended December 31, 1998, the year ended December
31, 1999 and the quarter ended March 31, 2000, respectively. We expect to expend
significant financial and management resources on site and content development
on our citysearch.com, cityauction.com, match.com, ticketmaster.com,
museumtix.com and ticketweb.com sites, integration of the citysearch.com,
cityauction.com, match.com, One & Only Network, ticketmaster.com, 2b Technology
and TicketWeb services, strategic relationships, technology and operating
infrastructure. As a result, we expect to incur significant additional losses
and continued negative cash flow from operations for the foreseeable future.
We believe that our future profitability and success will depend in
large part on, among other things:
- our ability to generate sufficient revenues from online
ticketing, online matchmaking, sales of our Web sites to
businesses and from the licensing of our technology and
business systems to partners setting up our services in
partner-led markets;
- the ability of Ticketmaster Corporation to maintain existing
relationships and enter into new relationships with live event
venues, sports franchises, promoters and other clients for
which it sells live event tickets;
- the ability of Ticketmaster Corporation to obtain or retain
for us the right to sell live event tickets and related
merchandise online;
- our ability to successfully enter into new strategic
relationships for distribution and increased usage of our
services;
- our ability to provide superior customer service;
- our ability to continue to develop and upgrade our
technologies and commercialize our services incorporating
these technologies; and
- and our ability to generate sufficient online traffic and
sales volume to achieve profitability.
As a result of the merger of Ticketmaster Online and CitySearch in
September 1998, we recorded a significant amount of goodwill which will
adversely affect our earnings and profitability for the foreseeable future. We
recorded an aggregate of $315.0 million of goodwill and other intangibles,
$154.8 million of which related to the transaction in which Ticketmaster Group,
Inc. became a wholly-owned subsidiary of USAi, and is to be amortized through
2008, and $160.2 million of which related directly to the merger of Ticketmaster
Online and CitySearch and is to be amortized through 2003. In addition, our
acquisitions of cityauction.com, match.com and One & Only resulted in an
aggregate of $107.1 million in goodwill which will be amortized through 2004.
Our acquisitions of 2b Technology, Inc. is expected to result in goodwill in an
amount approximating the purchase price that will be amortized through 2005.
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To the extent the amount of recorded goodwill is increased or we have future
losses and are unable to demonstrate our ability to recover the amount of
goodwill recorded during these time periods, the period of amortization could
be shortened, which may further increase annual amortization charges. In this
case, our business, financial condition and results of operations could be
materially and adversely affected. In addition, our acquisition of the
Sidewalk assets resulted in $333.5 million of amortizable allocated value to
the assets, which will be amortized over five years.
OUR ONLINE TICKETING SERVICE IS DEPENDENT UPON OUR RELATIONSHIP WITH
TICKETMASTER CORPORATION.
In connection with the merger of CitySearch and Ticketmaster Online,
Ticketmaster Online, Ticketmaster Corporation and USAi entered into a license
agreement which designates, subject to certain limitations, Ticketmaster Online
(ticketmaster.com) as Ticketmaster Corporation's exclusive agent for online live
event ticket sales and as its non-exclusive agent for the online sale of
merchandise.
For the foreseeable future, we anticipate that a substantial portion of
our revenues will be derived from the online sale of tickets. We also expect
that we will continue to derive a substantial portion of our revenues from per
ticket convenience charges and per order handling charges paid by consumers in
connection with online purchases of tickets to live events presented or promoted
by clients of Ticketmaster Corporation. We do not have contractual relationships
with the entities for which our ticketmaster.com service sells tickets as
Ticketmaster Corporation's agent and we are restricted under the license
agreement from having such relationships, whether with current Ticketmaster
Corporation clients or its potential clients. Accordingly, our future revenues
and business success are dependent on Ticketmaster Corporation's ability to
maintain and renew relationships with its existing clients and to establish
relationships with additional clients.
For the year ended December 31, 1999, Ticketmaster Corporation
processed ticket sales for over 3,750 clients. Approximately 20% of Ticketmaster
Corporation's client contracts are subject to renewal each year. We are
dependent upon Ticketmaster Corporation's ability to enter into and maintain
client contracts on terms that are favorable to Ticketmaster Corporation and our
ticketmaster.com service. There can be no assurance that Ticketmaster
Corporation will be able to enter into or maintain client contracts on such
terms.
All of our online ticket sales, other than sales through TicketWeb and
2b Technology, are processed through Ticketmaster Corporation's systems. Under
the license agreement, Ticketmaster Corporation is generally obligated to
provide order fulfillment services at least at the same level as such services
were generally provided as of the date of the license agreement. The license
agreement obligates Ticketmaster Corporation to process a specified number of
tickets sold online each year through December 31, 2001. As a result, our future
online ticketing revenues are dependent upon Ticketmaster Corporation's ability
to process online ticket sales in an accurate and timely manner. While we
believe that, due to our perpetual right to serve as Ticketmaster Corporation's
exclusive agent for online live event ticket sales, Ticketmaster Corporation has
a substantial interest in its relationship with us, there can be no assurance
that Ticketmaster Corporation will provide fulfillment services to us in excess
of the requirements of the license agreement and, in particular, after December
31, 2001.
Our ability to generate ticket and merchandise sales on our
ticketmaster.com Web site is also dependent in part on Ticketmaster
Corporation's ability to maintain and enhance the Ticketmaster brand name. Any
failure on the part of Ticketmaster Corporation to maintain its existing base of
clients, to establish relationships with new clients upon terms favorable to our
ticketmaster.com service, to obtain or retain for us the right to sell tickets
and merchandise online for Ticketmaster Corporation's clients, to process our
online ticket sales in a timely and accurate manner or at levels necessary to
support our business or to maintain and enhance the Ticketmaster brand name
would have a material adverse effect on our business, financial condition and
results of operations.
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WE ARE CONTROLLED BY USAi.
We are currently a direct, majority-owned subsidiary of Ticketmaster
Corporation, which is an indirect wholly-owned subsidiary of USAi. As of May 31,
2000, USAi owned approximately 49.9% of our total outstanding Common Stock,
representing approximately 82.3% of the total voting power of our total
outstanding Common Stock. As a result of its ownership of Class A Common Stock,
USAi generally has the ability to control the outcome of any matter submitted
for the vote or consent of our stockholders, except where a separate vote of the
holders of Class B Common Stock is required by Delaware law. Subject to
applicable Delaware law, USAi is generally not restricted with regard to its
ability to control the election of our directors, to cause the amendment of our
Amended and Restated Certificate of Incorporation, or generally to exercise a
controlling influence over our business and affairs. This control relationship
may have the effect of delaying or preventing a change in control of our company
and might adversely affect the market price of the Class B Common Stock.
Subject to applicable Delaware law, USAi could elect to sell all or a
substantial portion of its equity interest in us to a third party, which would
represent a controlling or substantial interest in us, without offering to our
other stockholders the opportunity to participate in such a transaction. In the
event of a sale of USAi's interest to a third party, that third party may be
able to control us in the manner that USAi is able to control us, including the
ability to control the election of directors.
USAi is currently controlled by Barry Diller, who is also a director of
our company. Mr. Diller is the Chairman and Chief Executive Officer of USAi.
Under stockholder and governance agreements with Liberty Media Corporation and
Universal Studios, Inc., two other significant USAi stockholders, Mr. Diller
generally has the right to control the outcome of any matter requiring the
approval of USAi stockholders, other than with respect to specified fundamental
changes relating to USAi or its subsidiaries. To engage in these fundamental
changes, the approval of each of Mr. Diller, Liberty Media and Universal Studios
is generally required. Copies of the governance and stockholders agreements
among USAi, Universal Studios, Liberty Media and Mr. Diller have been filed with
the Securities and Exchange Commission as Appendices B and C, respectively, to
USAi's Definitive Proxy Statement, dated January 12, 1998 and are available from
the SEC. Mr. Diller does not have an employment agreement with USAi, although he
has been granted options to purchase a substantial number of shares of USAi
common stock. The vesting of the unvested portion of these options, which should
occur in the next two years, is conditioned on Mr. Diller remaining at USAi. If
Mr. Diller no longer serves in his positions at USAi, generally Universal
Studios and Liberty Media will be able to control USAi. Any change in the
governance, management, operations or business of USAi could have a material
adverse effect on our relationship with USAi and Ticketmaster Corporation, and
could materially and adversely affect our business, financial condition and
results of operations.
CONFLICTS OF INTEREST MAY ARISE BETWEEN TICKETMASTER ONLINE-CITYSEARCH AND USAi.
Conflicts of interest may arise between us, including our
ticketmaster.com service, on the one hand, and USAi and its affiliates,
including Ticketmaster Corporation, on the other hand, in areas relating to
past, ongoing and future relationships and other matters. These also include:
- corporate opportunities;
- indemnity arrangements;
- tax and intellectual property matters;
- potential acquisitions or financing transactions;
- sales or other dispositions by USAi of shares of our Class A
Common Stock held by it; and
- the exercise by USAi of its ability to control our management
and affairs.
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These conflicts also may include disagreements regarding our license
agreement with Ticketmaster Corporation, including possible amendments to, or
waivers of provisions of, the agreement. Due to USAi's ability to control our
board of directors and subject to Delaware law, USAi may be able to effect
amendments without seeking the approval of any other party. These amendments,
modifications or waivers may adversely affect our business, financial condition
and results of operations.
Ownership interests of our directors or officers in the USAi common
stock, or service as both a director or officer of us and a director, officer or
employee of USAi, could create or appear to create potential conflicts of
interest when directors and officers are faced with decisions that could have
different implications for us and USAi. Several of the members of our board of
directors are also directors, officers or employees of USAi.
In addition, USAi is engaged in a diverse range of media and
entertainment-related businesses, including businesses engaged in electronic and
online commerce including Home Shopping Network and its USA Interactive
business. These businesses may have interests that conflict or compete in some
manner with our business. Subject to applicable Delaware law, USAi is under no
obligation, and has not indicated any intention, to share any future business
opportunities available to it with us except as expressly provided by our
license agreement with Ticketmaster Corporation. Our Amended and Restated
Certificate of Incorporation also includes provisions which provide that:
- USAi shall have no duty to refrain from engaging in the same
or similar activities or lines of our business, thereby
competing with us;
- USAi, its officers, directors and employees shall not be
liable to us or our stockholders for breach of any fiduciary
duty by reason of any activities of USAi in competition with
us; and
- USAi shall have no duty to communicate or offer corporate
opportunities to us and shall not be liable for breach of any
fiduciary duty as a stockholder of us in connection with these
opportunities, provided that the relevant procedures set forth
in our Amended and Restated Certificate of Incorporation are
followed.
There can be no assurance that any conflicts that may arise between us
and USAi, any loss of a corporate opportunity to USAi that might otherwise be
available to us, or any engagement by USAi in any activity that is similar to
our business will not have a material adverse effect on our business, financial
condition and results of operations or our other stockholders.
USAi MAY SELL A SIGNIFICANT PORTION OF OUR COMMON STOCK THAT IT OWNS WHICH COULD
ADVERSELY EFFECT THE PRICE OF OUR STOCK.
Subject to applicable federal securities laws, USAi may sell a
significant portion of the shares of Class A Common Stock beneficially owned by
it or distribute any or all of its shares of Class A Common Stock to its
stockholders. At May 31, 2000, USAi's holdings represented approximately 49.9%
of the outstanding Common Stock, representing approximately 82.3% of the voting
power of our total outstanding Common Stock. Pursuant to our Amended and
Restated Certificate of Incorporation, each share of Class A Common Stock will
generally be converted automatically into one share of Class B Common Stock upon
any transfer by the initial registered holder. Any sales or distributions by
USAi of substantial amounts of Common Stock in the public market or to its
stockholders, or the perception that these sales or distributions could occur,
could adversely affect the prevailing market prices for our Class B Common
Stock. USAi is not subject to any obligation to retain any portion of its
controlling interest in us. We have not granted to USAi any registration rights
with respect to the shares of our Common Stock owned by it.
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WE MAY HAVE FUTURE CAPITAL NEEDS AND MAY NOT BE ABLE TO OBTAIN ADDITIONAL
FINANCING ON ACCEPTABLE TERMS.
We expect to continue to experience significant negative cash flow from
operations for the foreseeable future. USAi has no obligation or agreement to
provide any future capital or other funding to us. We may be required to raise
additional funds at some point in the future. If additional funds are raised
through the issuance of equity securities, our stockholders may experience
significant dilution. Furthermore, there can be no assurance that additional
financing will be available when needed or that if available, such financing
will include terms favorable to our stockholders or us. If this financing is not
available when required or is not available on acceptable terms, we may be
unable to develop or enhance our services, take advantage of business
opportunities or respond to competitive pressures, any of which could have a
material adverse effect on our business, financial condition and results of
operations.
OUR TURNOVER RATE OF BUSINESS CUSTOMERS FOR THE CITYSEARCH.COM SERVICE IS HIGHER
THAN WE INITIALLY HAD ANTICIPATED AND, IF IT DOES NOT IMPROVE, OUR
CITYSEARCH.COM SERVICE WILL SUFFER.
The turnover rate of business customers using our citysearch.com
service has been higher than we had anticipated, and we cannot provide assurance
that turnover rates will decrease and will not in the future materially and
adversely affect our business, financial condition and results of operations.
Specifically, the turnover rate has been higher than we expected due to several
factors, including:
- our early belief that our services would be suited to a
broader base of business customers;
- the challenges of proving advertising value to a broad range
of small businesses that may not have significant experience
with online services;
- our continuing refinements to our sales, production and
customer service processes to meet the needs of our business
customers; and
- our initial underestimation of the need for continuous
marketing support of our business customers.
We cannot provide assurance that businesses will elect to outsource the
design, development and maintenance of their Web sites to services such as
citysearch.com. Businesses may elect to perform such tasks internally,
particularly if third-party providers of such services prove to be unreliable,
ineffective, too expensive or if software companies offer user-friendly and
cost-effective tools for such purpose. In the event that a significant number of
businesses internalize tasks, our business, financial condition and results of
operations could be materially and adversely affected.
OUR TICKETMASTER.COM SERVICE ALSO RELIES ON STRATEGIC RELATIONSHIPS.
Our ticketmaster.com service is to an extent dependent on its and
Ticketmaster Corporation's relationships with certain strategic partners
relating to the sharing of certain ticketmaster.com Web site and user links. We
hope to derive significant benefits, including increased revenues and consumer
awareness, from these relationships. The arrangements also include, in certain
cases, non-competition provisions that restrict our ability to engage in similar
activities on our own or with other partners. There can be no assurance that
these relationships will continue, that the relationships will be successful in
any respect or that we will be able to find suitable additional or replacement
strategic partners. The failure of these relationships could have a material
adverse effect on our business, financial condition and results of operations.
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A SHORTAGE OF TRAINED SALES PERSONNEL WOULD LIMIT OUR ABILITY TO SELL OUR
SERVICES.
We currently derive and, for the foreseeable future, intend to derive a
substantial portion of our revenues from sales of business Web sites to local
businesses in markets in which we own and operate citysearch.com city guides. We
depend on our direct sales force to sell business Web sites in these markets.
The creation of new revenue from citysearch.com's city guide service and our
roll-out in additional cities requires the services of a highly trained sales
force working directly for us. Accordingly, a shortage in the number of trained
salespeople could limit our ability to sell business Web sites as we roll out
our service in new cities or to maintain or increase our number of business
customers in cities in which we already operate. We have in the past and expect
in the future to experience a high rate of turnover in our direct sales force.
There can be no assurance that turnover will not increase in the future or have
a material adverse effect on our sales, which could have a material adverse
effect on our business, financial condition and results of operations.
In addition, we currently derive a portion of our ticketmaster.com
revenues from the sale of banner advertising and sponsorships. A shortage in the
number of trained salespeople could limit our ability to sell additional banner
advertising or sponsorships or renew existing sponsorship or advertising
relationships, which could have a material adverse effect on our business,
financial condition and results of operations.
WE DEPEND ON KEY PERSONNEL AND NEED TO HIRE ADDITIONAL QUALIFIED PERSONNEL.
Our success depends to a significant degree upon the continued
contributions of our executive management team, including Charles Conn, our
Chairman, John Pleasants, our President and Chief Executive Officer, and Dan
Marriott, our Executive Vice President, Corporate Strategy and Development. The
loss of the services of Messrs. Conn, Pleasants, Marriott or other members of
our management team could have a material adverse effect on our business,
financial condition and results of operations. In addition, the ticketmaster.com
service has been managed historically by the management of Ticketmaster
Corporation. Our success will depend upon a successful completion of the
transition of the ticketmaster.com management responsibility to our senior
management team.
Our employees, including our senior officers, may voluntarily terminate
their employment with us at any time, and competition for qualified employees is
intense. Our success also depends upon our ability to attract and retain
additional highly qualified management, technical and sales and marketing
personnel. The process of locating and hiring such personnel with the
combination of skills and attributes required to carry out our strategy is often
lengthy. The loss of the services of key personnel or the inability to attract
additional qualified personnel could have a material adverse effect on our
business, financial condition and results of operations.
WE MUST MAINTAIN AND PROMOTE OUR BRANDS TO BE SUCCESSFUL.
We believe that maintaining and promoting the citysearch.com and
match.com brands and, to a lesser extent, the cityauction.com, ticketweb.com,
and museumtix.com brands, are critical to our efforts to attract consumers and
business customers to our sites. We also believe that the importance of brand
recognition will increase due to the growing number of Internet sites and
relatively low barriers to entry to providing Internet content. Promotion of our
brands will depend largely on our success, and, to a lesser extent, the success
of our media company partners, in providing high quality Internet content.
Under the terms of our agreements with media company partners, we have
very limited control over the content provided on the citysearch.com partners'
sites. If consumers and business customers do not perceive the content of our or
our partners' existing sites to be of high quality, we may be unsuccessful in
promoting and maintaining the citysearch.com brand. Furthermore, not all of our
partners promote the citysearch.com brand on their services with a high level of
prominence. In addition, users accessing partner-led market sites that contain
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different interfaces from our owned and operated sites may be confused by the
differences in interface or navigation, and this confusion may inhibit our
ability to develop our brand and network.
In order to attract and retain consumers and business customers, and to
promote our brands in response to competitive pressures, we have found it
necessary to increase our budget for content and to increase substantially our
financial commitment to creating and maintaining a distinct brand loyalty among
consumers and business customers. If either we or our media company partners are
unable to provide high quality content or otherwise fail to promote and maintain
our brands or if we incur excessive expenses in an attempt to improve our
content or promote and maintain our brands, our business, financial condition
and results of operations could be materially and adversely affected.
OUR FIXED PRICE CONTRACTS EXPOSE US TO COST OVERRUNS AND OTHER RISKS.
The services we offer to citysearch.com business customers typically
consist of the design, implementation, hosting and maintenance of customized Web
sites, for which the customers are billed on a fixed-price basis, consisting of
an up-front fee and monthly fees. Our failure to estimate accurately the
resources and time required for providing such services, to manage client
expectations effectively regarding the scope of services to be delivered for the
estimated fees or to complete the services within budget, on time and to
clients' satisfaction would expose us to risks associated with cost overruns and
customer dissatisfaction.
THE MARKETS IN WHICH WE SELL OUR SERVICES ARE INTENSELY COMPETITIVE AND OUR
BUSINESS WOULD BE ADVERSELY AFFECTED IF WE FAIL TO GROW OUR MARKET SHARE OR
OTHERWISE FAIL TO SUCCESSFULLY COMPETE IN THESE MARKETS.
The markets for local interactive content and services, the selling of
live event tickets and related merchandise and our other services are highly
competitive and diverse. citysearch.com's primary competitors include Digital
City, Inc., a company wholly owned by America Online, Inc., Tribune Company, Cox
Interactive and Knight Ridder's Real Cities. citysearch.com also competes with
numerous search engines and other site aggregation companies, media,
telecommunications and cable companies, Internet service providers and niche
competitors which focus on a specific category or geography and compete with
specific content offerings provided by us. Furthermore, additional major media
and other companies with financial and other resources greater than ours may
introduce new Internet products addressing the local interactive content and
service market in the future.
The online services of Ticketmaster Corporation, ticketmaster.com, 2b
Technology and TicketWeb compete with event facilities and promoters that handle
their own ticket sales and distribution through online and other distribution
channels, live event automated ticketing companies with Web sites which may or
may not currently offer online transactional capabilities and certain Web-based
live event ticketing companies which conduct business online, including
Tickets.com. In certain specific geographic regions, including certain of the
local markets in which citysearch.com provides or intends to provide our local
city guide service, one or more of Ticketmaster Corporation's,
ticketmaster.com's, 2b Technology's and TicketWeb's competitors may serve as the
primary ticketing service in the region. We believe that our online ticketing
service will experience significant difficulty in establishing a significant
online presence in such regions and, as a result, any local city guide for such
a region may be unable to provide significant ticketing capabilities. In
addition, there can be no assurance that one or more of these regional automated
ticketing companies will not expand into other regions or nationally, which
could have a material adverse effect on our business, financial condition and
results of operations. Furthermore, substantially all of the tickets sold
through our ticketmaster.com Web site are also sold by Ticketmaster Corporation
by telephone and through independent retail outlets. These sales by Ticketmaster
Corporation could have a material adverse effect on our online sales, and as a
result, on our business, financial condition and results of operations.
The online dating services market is very competitive. match.com's and
One & Only Network's primary competitors include FriendFinder, Inc. and
Matchmaker.com, Inc., both of whom charge subscribers fees for use of
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their services. In addition, match.com and One & Only Network face
significant competition from online dating services which are free to
subscribers and which are offered by most major portal sites, including
Yahoo! Inc., Excite Inc. and America Online, Inc., among others.
We believe that the principal competitive factors for all our services
include:
- depth, quality and comprehensiveness of content;
- ease of use;
- distribution;
- search capability; and
- brand recognition.
Many of our competitors have greater financial and marketing resources
than we and may have significant competitive advantages through other lines of
business and existing business relationships. There can be no assurance that we
will be able to successfully compete against our current or future competitors
or that competition will not have a material adverse effect on our business,
financial condition and results of operations. Furthermore, as a strategic
response to changes in the competitive environment, we may make certain pricing,
servicing or marketing decisions or enter into acquisitions or new ventures that
could have a material adverse effect on our business, financial condition and
results of operations.
WE NEED TO SUCCESSFULLY INTRODUCE NEW SERVICES TO GROW OUR BUSINESS.
We expect to continue to introduce new and expanded services in order
to generate additional revenues, attract more businesses and consumers, and
respond to competition. We also offer services facilitating the purchase of
goods by consumers from citysearch.com's business customers or others. A key
element of our strategy is to technologically enable our city guides so that
consumers and our business customers can buy and sell goods and services online
through our city guides. We have limited experience in building e-commerce
functionality with our city guides. There can be no assurance that we will be
able to offer e-commerce or other new services in a cost-effective or timely
manner or that our efforts would be successful. Furthermore, any new service
launched by us that is not favorably received by consumers could damage our
reputation or our brand names. Expansion of our services in this manner would
also require significant additional expenses and development and may strain our
management, financial and operational resources. If we do not generate revenues
from expanded services sufficient to offset their costs, our business would
suffer.
WE HAVE RECENTLY EXPERIENCED AND ARE CURRENTLY EXPERIENCING RAPID GROWTH AND OUR
INABILITY TO MANAGE THIS GROWTH COULD HARM OUR BUSINESS.
Our businesses have grown rapidly in recent periods. The growth of
these businesses and expansion of our consumer bases have placed a significant
strain on our management and operations. The growth of our businesses has
resulted, and is expected in the future to result, in the growth in the number
of our employees, in the establishment of offices in disparate regions of the
country and in increased responsibility for both existing and new management
personnel. In addition, this growth has and will put additional pressure on
existing operational, financial and management information systems. Our success
will depend to a significant extent on the ability of our executive officers and
other members of senior management to operate effectively, both independently
and as a group. To manage our growth, we must continue to implement and improve
operational, financial and management information systems and hire and train
additional qualified personnel, including sales and marketing staff. There can
be no assurance that we will be able to manage recent or any future expansions
successfully, and any failure by us to do so could have a material adverse
effect on our business, financial condition and results of operations. There
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also can be no assurance that our citysearch.com, cityauction.com, match.com
(including the One & Only Network), ticketmaster.com, 2b Technology or
ticketweb.com services will be able to sustain the rate of expansion that each
has experienced in the past.
OUR SERVICES ARE SUBSTANTIALLY DEPENDENT ON OUR ABILITY TO CONTINUE TO DEVELOP
COMPELLING CONTENT.
Our success depends in part upon our ability to deliver compelling
interactive content on our citysearch.com service, such as local events
information, recreation, business, shopping, professional services and
news/sports/weather and online ticketing services. We need to develop this
content in order to attract consumers with demographic characteristics valuable
to citysearch.com's business customers. Our success also depends on our ability
to develop and integrate compelling content with existing ticketing capabilities
on our ticketmaster.com, museumtix.com and ticketweb.com Web sites.
There can be no assurance that we will be successful in developing new
content and services or enhancing citysearch.com's existing local city guide
service, or the ticketmaster.com, 2b Technology, ticketweb.com, cityauction.com,
match.com or One & Only Network services on a timely basis, or that such content
and services will effectively address consumer requirements and achieve market
acceptance. If we, for technological or other reasons, are unable to develop and
enhance our local interactive content and services in a manner compatible with
emerging industry standards and that allows us to attract, retain and expand a
consumer base possessing demographic characteristics attractive to
citysearch.com's business customers, ticketmaster.com's advertisers and
sponsors, and cityauction.com's, match.com's and One & Only Network's users, our
business, financial condition and results of operations would be materially and
adversely affected.
OUR PLANS TO EXPAND INTERNATIONALLY WILL REQUIRE US TO DEVELOP LOCALIZED
VERSIONS OF OUR SITES AND ADDRESS OTHER RISKS OF OPERATING INTERNATIONALLY.
A key component of our strategy is to continue to expand our services
into international markets. We expect to expend significant financial and
management resources to operate overseas and, with respect to the citysearch.com
service, create localized user interfaces through the launch of additional
partner-led markets. We believe Ticketmaster Corporation intends to continue to
expand its operations outside of the United States, which will require
additional resources from our ticketmaster.com service to the extent it
distributes tickets online in those markets. If the revenues generated by these
international operations are insufficient to offset the expense of establishing
and maintaining such operations, our business, financial condition and results
of operations will be materially and adversely affected. There can be no
assurance that our partners or we will be able to successfully market or sell
our services in these international markets. In addition to the uncertainty as
to our ability to expand our international presence, there are certain risks
inherent in conducting business on an international level, such as:
- unexpected changes in regulatory requirements, tariffs and
other trade barriers;
- difficulties in staffing and managing foreign operations;
- political instability;
- currency rate fluctuations; and
- potentially adverse tax consequences.
There can be no assurance that one or more of the foregoing factors
will not have a material adverse effect on our current and future international
operations and, consequently, on our business, financial condition and results
of operations.
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OUR BUSINESS RELIES ON THE PERFORMANCE OF OUR SYSTEMS AND THE PERFORMANCE AND
AVAILABILITY OF THIRD PARTY SYSTEMS.
The satisfactory performance, reliability and availability of our city
guides, online ticketing services, auction services, Internet personals services
and our network infrastructures are critical to attracting Web users and
maintaining relationships with business customers and consumers. System
interruptions that result in the unavailability of sites or slower response
times for consumers would reduce the number of business Web sites and
advertisements purchased and reduce the attractiveness of our citysearch.com
local city guides, cityauction.com, match.com and One & Only Network services,
and ticketmaster.com's, 2b Technology's and ticketweb.com's online services to
business customers and consumers. Our services have experienced system
interruptions in the past and we believe that such interruptions will continue
to occur from time to time in the future.
Any substantial increase in traffic on our services will also require
us to expand and adapt our network infrastructure. Our inability to add
additional software and hardware to accommodate increased traffic on our
services may cause unanticipated system disruptions and result in slower
response times.
In addition, our ticketmaster.com operations are substantially
dependent upon services and infrastructure provided by Ticketmaster Corporation
that enable ticketmaster.com to access information on ticket and merchandise
inventory, events and consumers maintained by Ticketmaster Corporation. In
addition, Ticketmaster Corporation has agreed to provide all order processing,
payment processing and fulfillment services for tickets to live events and
merchandise ordered through ticketmaster.com pursuant to the terms and subject
to the limitations of our license agreement. Any discontinuation or disruption
of these services by Ticketmaster Corporation would be disruptive to the
ticketmaster.com business and would likely have a material adverse effect on our
business, financial condition and results of operations.
We use a custom-developed system for our ticketmaster.com ticketing
operations and certain aspects of transaction processing. ticketmaster.com has
experienced temporary system interruptions, which may continue to occur in the
future from time to time. Any substantial increase in the volume of traffic on
our online sites or the number of tickets purchased by consumers will require us
to continue to expand and upgrade further ticketmaster.com technology,
transaction- processing systems and network infrastructure.
There can be no assurance that our ticketmaster.com service's
transaction-processing systems and network infrastructure will be able to
accommodate increases in traffic in the future, or that we will, in general,
be able to accurately project the rate or timing of such increases or upgrade
our systems and infrastructure to accommodate future traffic levels on our
online sites. In addition, there can be no assurance that we will be able to
effectively upgrade and expand our ticketmaster.com transaction-processing
systems in a timely manner or to successfully integrate any newly developed
or purchased components of its existing systems. Any inability to do so could
have a material adverse effect on our business, financial condition and
results of operations.
SECURITY BREACHES OF OUR NETWORK SYSTEMS WOULD SIGNIFICANTLY ADVERSELY AFFECT
OUR BUSINESS.
A fundamental requirement for online commerce and communications is the
secure transmission of confidential information over public networks. We rely on
encryption and authentication technology licensed from third parties to provide
the security and authentication necessary to effect secure transmission of
confidential information, such as consumers credit card numbers. In addition, we
maintain an extensive confidential database of consumer profiles and transaction
information. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography, or other events or developments
will not result in a compromise or breach of the methods used by us to protect
consumer transaction and personal data contained in our database. If any such
compromise of our security were to occur, it could have a material adverse
effect on our reputation and on our business, operating results and financial
condition. A party who is able to circumvent our security measures could
misappropriate proprietary information or cause interruptions in our operations.
We may be required to
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expend significant capital and other resources to protect against security
breaches or to alleviate problems caused by breaches.
Concerns over the security of transactions conducted on the Internet
and commercial online services and the privacy of users may also inhibit the
growth of the Web and online services as a means of conducting commercial
transactions. To the extent that our activities or those of third-party
contractors involve the storage and transmission of proprietary information,
such as credit card numbers or other personal information, security breaches
could expose us to a risk of loss or litigation and possible liability. In
addition, we may suffer losses as a result of orders placed with fraudulent
credit card data, even though the consumer's payment for such orders has been
authorized by the associated financial institution. Under current credit card
practices, a merchant is liable for fraudulent credit card transactions where,
as is the case with the transactions processed by us, no cardholder signature is
obtained. There can be no assurance that we will not suffer significant losses
as a result of fraudulent use of credit card data in the future, which could
have a material adverse effect on our business, financial condition and results
of operations.
OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO ADAPT TO THE RAPID TECHNOLOGICAL
CHANGES THAT CHARACTERIZE THE INTERNET AND THE ONLINE COMMERCE INDUSTRY.
The Internet and the online commerce industry are characterized by the
following:
- rapid technological change;
- changes in user and customer requirements and preferences;
- frequent new product and service introductions embodying new
technologies; and
- the emergence of new industry standards and practices that
could render our existing online sites and proprietary
technology and systems obsolete.
The emerging nature of these products and services and their rapid
evolution will require that we continually improve the performance, features and
reliability of our online services, particularly in response to competitive
offerings. Our success will depend, in part, upon our ability:
- to enhance our existing services;
- to develop new services and technology that address the
increasingly sophisticated and varied needs of our prospective
customers; and
- to respond to technological advances and emerging industry
standards and practices on a cost-effective and timely basis.
The development of online sites and other proprietary technology
entails significant technical and business risks and requires substantial
expenditures and lead time. There can be no assurance that we will successfully
use new technologies effectively or adapt our online sites, proprietary
technology and transaction-processing systems to customer requirements or
emerging industry standards. If we are unable, for technical, legal, financial
or other reasons, to adapt in a timely manner in response to changing market
conditions or customer requirements, our business, operating results and
financial condition could be materially adversely affected.
INFORMATION DISPLAYED ON OR ACCESSED FROM OUR WEB SITES MAY SUBJECT US TO
LIABILITY.
We may face potential liability for defamation, negligence, copyright,
patent or trademark infringement and other claims based on the nature and
content of the materials that appear on the citysearch.com,
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cityauction.com, match.com, One & Only Network, ticketmaster.com,
museumtix.com or ticketweb.com sites or on sites operated by our partners.
These claims have been brought, and sometimes successfully pressed, against
online services. Although we intend to maintain our general liability
insurance at current levels, our insurance may not cover claims of these
types or may not be adequate to indemnify us for any liability that may be
imposed. Any imposition of liability, particularly liability that is not
covered by insurance or is in excess of insurance coverage, could have a
material adverse effect on our reputation and our business, financial
conditions and results of operations.
OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS FROM THIRD PARTY CHALLENGES OR IF WE ARE SUBJECT TO
LITIGATION.
We regard our copyrights, service marks, trademarks, trade dress, trade
secrets, proprietary software and similar intellectual property as critical to
our success, and rely on trademark and copyright law, trade secret protection
and confidentiality and/or license agreements with employees, customers,
partners and others to protect our proprietary rights. We do not hold any
patents. We pursue the registration of certain of our key trademarks and service
marks in the United States and internationally. Effective trademark, service
mark, copyright and trade secret protection may not be available or sought by us
in every country in which our products and services are made available online.
We have licensed in the past, and expect to license in the future,
certain proprietary rights, such as trademarks or copyrighted material, to third
parties. In addition, we have licensed in the past, and expect that we may
license in the future, certain content, including trademarks and copyrighted
material, from third parties. While we attempt to ensure that the quality of our
brands is maintained by such licensees, there can be no assurance that such
licensees will not take actions that might materially adversely affect the value
of our proprietary rights or reputation, which could have a material adverse
effect on our business, financial condition and results of operations.
There can be no assurance that the steps taken by us to protect our
proprietary rights will be adequate or that third parties will not infringe or
misappropriate our copyrights, trademarks, trade dress and similar proprietary
rights. In addition, there can be no assurance that other parties will not
assert infringement claims, including patent infringement claims, against us.
We license the trademark "CitySearch" from a third party, and there can
be no assurance that we will be able to continue to license the trademark on
terms acceptable to us.
We license the trademark "Ticketmaster" and related trademarks from
Ticketmaster Corporation pursuant to our license agreement with Ticketmaster
Corporation. We may be subject to legal proceedings and claims of alleged
infringement of the trademarks and other intellectual property rights of third
parties by us and our licensees. Such claims, even if not meritorious, could
result in the expenditure of significant financial and managerial resources
which could result in a material adverse effect on our business, financial
condition and results of operations. We are dependent upon Ticketmaster
Corporation to maintain and assert its rights to the trademarks and defend
infringement claims, if any.
IF WE FAIL TO COMPLY WITH THE LAWS AND REGULATIONS THAT GOVERN OUR SERVICES, OUR
BUSINESS COULD BE ADVERSELY AFFECTED.
We are subject to regulations applicable to businesses generally and
laws or regulations directly applicable to access to online commerce. Although
there are currently few laws and regulations directly applicable to the Internet
and commercial online services, it is possible that a number of laws and
regulations may be adopted with respect to the Internet or commercial online
services covering issues such as:
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- user privacy;
- pricing;
- content;
- taxation;
- copyrights;
- distribution;
- antitrust; and
- characteristics and quality of products and services.
Furthermore, the growth and development of the market for online
commerce may prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business online. The
adoption of any additional laws or regulations may decrease the growth of the
Internet or commercial online services, which could, in turn, decrease the
demand for our products and services and increase our cost of doing business, or
otherwise have a material adverse effect on our business, financial condition
and results of operations. Moreover, the applicability to the Internet and
commercial online services of existing laws in various jurisdictions governing
issues such as property ownership, sales and other taxes, libel and personal
privacy is uncertain and may take years to resolve. For example, tax authorities
in a number of states are currently reviewing the appropriate tax treatment of
companies engaged in online commerce, and new state tax regulations may subject
us to additional state sales and income taxes. Any such new legislation or
regulation, the application of laws and regulations from jurisdictions whose
laws do not currently apply to our business, or the application of existing laws
and regulations to the Internet and commercial online services could have a
material adverse effect on our business, financial condition and results of
operations.
As of April 21, 2000, we are subject to the Children's Online Privacy
Protection Act of 1998 ("COPPA"). Pursuant to COPPA, a Web site operator must
provide notice on its Web sites of the information it collects from children
under the age of 13, how it uses that information and to whom it discloses that
information. With certain exceptions, the operator must obtain verifiable
parental consent for any collection, use or disclosure of personal information
submitted online by children under the age of 13. We believe we are currently
in, and intend to continue to remain in, compliance with COPPA. However, in the
event we are found to have violated COPPA, we could be subject to penalties of
up to $10,000 per violation.
Our ticketmaster.com, 2b Technology and TicketWeb services are
regulated by certain state and local regulations, including, but not limited to,
a law in Georgia that establishes maximum convenience charges on tickets for
certain sporting events. Other legislation that could affect the way our
ticketmaster.com, 2b Technology and TicketWeb services do business, including
bills that would regulate the amount of convenience charges and handling
charges, are introduced from time to time in federal, state and local
legislative bodies. We are unable to predict whether any such bills will be
adopted and, if so, whether such legislation would have a material effect on our
business, financial condition and results of operations.
WE MAY BE SUBJECT TO GOVERNMENTAL INVESTIGATIONS AND LITIGATIONS.
From time to time, federal, state and local authorities have conducted
investigations or inquiries with respect to Ticketmaster Corporation's
compliance with antitrust, unfair business practice and other laws. In 1994, the
Antitrust Division of the Department of Justice commenced an investigation,
which was concluded in 1995 with no enforcement action being taken against
Ticketmaster Corporation. Ticketmaster believes it has not taken any
18
<PAGE>
action which is improper. In addition, we are a party to various legal
proceedings involving commercial disputes and intellectual property issues
arising in the ordinary course of business. While the outcomes of these
proceedings are uncertain, we do not currently expect that they will have a
material adverse effect on our business, financial condition or results of
operations.
During 1994, Ticketmaster Corporation was named as a defendant in 16
federal class action lawsuits filed in United States District Courts purportedly
on behalf of consumers who were alleged to have purchased tickets to various
events through Ticketmaster Corporation. These lawsuits alleged that
Ticketmaster Corporation's activities violated antitrust laws. On December 7,
1994, the Judicial Panel on Multidistrict Litigation transferred all of the
lawsuits to the United States District Court for the Eastern District of
Missouri for coordinated and consolidated pretrial proceedings. After an amended
and consolidated complaint was filed by the plaintiffs, Ticketmaster Corporation
filed a motion to dismiss and, on May 31, 1996, the District Court granted that
motion, ruling that the plaintiffs had failed to state a claim upon which relief
could be granted. On April 10, 1998, the United States Court of Appeals for the
Eighth Circuit issued an opinion affirming the district court's ruling that the
plaintiffs lack standing to pursue their claims for damages under the antitrust
laws and held that the plaintiffs' status as indirect purchasers of Ticketmaster
Corporation's services did not bar them from seeking equitable relief against
Ticketmaster Corporation. Discovery on the plaintiffs' remanded claim for
equitable relief is ongoing in the District Court and a trial date of July 17,
2000 has been set. On July 9, 1998, the plaintiffs filed a petition for writ of
certiorari to the United States Supreme Court seeking review of the decision
dismissing their damage claims. Plaintiff's petition for writ of certiorari in
the United States Supreme Court was denied on January 19, 1999. The action is
still pending.
Ticketmaster Corporation has stated that the Court's affirmance of the
decision prohibiting plaintiffs from obtaining monetary damages against
Ticketmaster Corporation eliminates the substantial portion of plaintiffs'
claims. With respect to injunctive relief, the Antitrust Division of the United
States Department of Justice had previously investigated Ticketmaster
Corporation for in excess of 15 months and closed its investigation with no
suggestion of any form of injunctive relief or modification of the manner in
which Ticketmaster Corporation does business.
In March 1995, MovieFone, Inc. and The Teleticketing Company, L.P.
filed a complaint against Ticketmaster Corporation in the United States District
Court for the Southern District of New York. Plaintiffs allege that they are in
the business of providing movie information and teleticketing services, and that
they are parties to a contract with Pacer Cats Corporation, a wholly owned
subsidiary of Wembley plc, to provide teleticketing services to movie theaters.
Plaintiffs also allege that, together with Pacer Cats, they had planned to begin
selling tickets to live entertainment events, and that Ticketmaster Corporation,
by its conduct, frustrated and prevented plaintiffs' ability to do so.
Plaintiffs further allege that Ticketmaster Corporation has interfered with and
caused Pacer Cats to breach its contract with plaintiffs. The complaint asserts
that Ticketmaster Corporation's actions violate Section 7 of the Clayton Act and
Sections 1 and 2 of the Sherman Act, and that Ticketmaster Corporation
tortiously interfered with contractual and prospective business relationships
and seeks monetary and injunctive relief based on such allegations. Ticketmaster
Corporation filed a motion to dismiss. The court heard oral argument on
September 26, 1995. In March 1997, prior to the rendering of any decision by the
Court on Ticketmaster Corporation's motion to dismiss, Ticketmaster Corporation
received an amended complaint in which the plaintiffs assert essentially the
same claims as in the prior complaint but have added a RICO claim and tort
claims. Ticketmaster Corporation filed a motion to dismiss the amended complaint
in April 1997, which is pending. Some of the claims in this litigation are
similar to claims that were the subject of an arbitration award in which
MovieFone was a claimant and Pacer Cats a respondent. Among other things, the
award included damages from Pacer Cats to MovieFone of approximately $22.75
million before interest and an injunction against some entities, which may
include affiliates of Ticketmaster Corporation, restricting or prohibiting their
activity with respect to aspects of the movie teleticketing business for a
specified period of time. Neither USAi, Ticketmaster Corporation, nor any entity
owned or controlled by Ticketmaster Corporation, were parties to the
arbitration. In May 1998, MovieFone filed a petition in New York state court to
hold an entity affiliated with Ticketmaster Corporation in contempt of the
injunction provision of the arbitration award on the grounds that such entity is
a successor or assignee of, or otherwise acted in concert with, Pacer Cats. In
November 1998, the court ruled that the Ticketmaster Corporation affiliate is
bound by the arbitrators' findings that it is the successor to Pacer Cats and,
as such, liable for
19
<PAGE>
breaches committed by Pacer Cats and subject to the terms of the arbitration
award's injunction. The court further found that the Ticketmaster Corporation
affiliate had violated the injunction and awarded MovieFone approximately
$1.38 million for losses it incurred as a result of such violations. The
Ticketmaster Corporation affiliate filed a notice of appeal of the court's
decision, including to seek reversal of the ruling regarding successor
liability and violations of the injunction. The appeal was denied by order
entered January 11, 2000. Further, on December 21, 1999, the court extended
the injunction for six months.
On July 22, 1999, a class action entitled ANTHONY MARTIN V.
TICKETMASTER LLC; TICKETMASTER CORPORATION; TICKETMASTER GROUP, INC.; TIME
CONSUMER SERVICE, INC. AND JOHN DOES 1-10 was filed in the United States
District Court for the Northern District of Illinois. The plaintiff alleges that
Ticketmaster Corporation engages in unlawful business practices in connection
with offering "Entertainment Weekly" magazine to consumers. The complaint, which
alleges that Ticketmaster's policies violate 39 U.S.C. 3009 (mailing of
unordered merchandise) and Section 2 of the Illinois Consumer Fraud and
Deceptive Business Practices Act, seeks restitution, damages, punitive damages
and attorney's fees. The defendants filed an answer on September 16, 1999.
Ticketmaster Corporation believes that these allegations have no merit.
On or about December 17, 1999, a purported class action lawsuit
entitled ADRIANA GARZA, ET AL. V. SOUTHWEST TICKETING, INC., D/B/A TICKETRON,
TICKETMASTER AND RAINBOW TICKETMASTER, TICKETMASTER TEXAS MANAGEMENT,
TICKETMASTER LLC, TICKETMASTER GROUP, INC., TICKETMASTER ONLINE-CITYSEARCH, INC.
AND THE MAY DEPARTMENT STORES COMPANY, Case No. C-5714-99-B, was filed in state
court in the District Court of Hidalgo County, Texas, 93rd Judicial District.
The lawsuit challenges the cash discounts offered by Ticketmaster Corporation's
outlets in Texas, and alleges that Defendants impose a surcharge on credit card
users. On January 14, 2000, Defendants removed the case to a federal court, and
filed an Answer on January 24, 2000 denying the allegations. Plaintiff filed a
motion to remand to state court, to which Defendants filed a response on
February 18, 2000. On March 8, 2000, the federal court granted the Plaintiff's
motion to remand the case to state court. Plaintiff filed a motion for partial
summary judgment on March 24, 2000 and, on May 1, 2000, Defendants filed a
cross-motion for summary judgment. Ticketmaster Online-City Search, Inc.
contends in the cross-motion for summary judgment that, in addition to the fact
that the cash discounts offered at outlets are legal, it has no liability
because it was not involved in the sale of tickets to the Plaintiff and,
further, that it does not sell any tickets for which cash discounts are
available. There is no hearing date yet for the motions for summary judgment. On
April 3, 2000, Plaintiff amended her petition. The amended petition includes
allegations by Plaintiff of her desire to represent a class of plaintiffs from
the State of Texas, Oklahoma, Kansas, New York, Florida, Connecticut, Maine,
Massachusetts and Colorado. In addition, Plaintiff also stated her desire for
the proposed class to include not only credit card purchasers of tickets at
outlets but also credit card purchasers of tickets over the telephone and the
Internet. Plaintiff filed her Motion for Class Certification on April 11, 2000.
Hearing is not yet scheduled on this motion. Ticketmaster Online-City Search,
Inc. intends to vigorously defend this action.
On July 23, 1999, Ticketmaster Corporation and Ticketmaster
Online-CitySearch, Inc. (collectively, "Ticketmaster"), filed a Complaint for
Damages and Injunctive Relief against Tickets.com, Inc. ("Tickets.com"),
entitled TICKETMASTER CORPORATION AND TICKETMASTER ONLINE-CITYSEARCH, INC. V.
TICKETS.COM, INC., Case No. 99-07654 HLH, in the United States District Court,
Central District of California. Ticketmaster claims that Tickets.com violates
Ticketmaster's legal and contractual rights by, among other things, (i)
providing deep-links to Ticketmaster's internal web pages without Ticketmaster's
consent, (ii) systematically, deceptively and intentionally accessing
Ticketmaster's computers and computer systems and copying verbatim Ticketmaster
event pages daily and extracting and reprinting Ticketmaster's Uniform Resource
Locators ("URLs") and event data and information in complete form on
Tickets.com's web site and (iii) providing false and misleading information
about Ticketmaster, the availability of tickets on the Ticketmaster Web Site,
and the relationship between Ticketmaster and Tickets.com. On January 7, 2000,
Ticketmaster filed a First Amended Complaint. Tickets.com filed a motion to
dismiss Ticketmaster's First Amended Complaint on or about February 23, 2000,
claiming that Tickets.com did not violate the Copyright Act or Lanham Act and
that Ticketmaster's state law claims were preempted and/or did not state a valid
claim for relief. The Court denied Tickets.com's motion as to Ticketmaster's
claims for copyright infringement, violations of the Lanham Act, state law
unfair competition and interference with prospective economic advantage. The
Court granted Tickets.com's motion, but gave Ticketmaster leave to amend, as to
20
<PAGE>
Ticketmaster's claims for breach of contract, trespass, unjust enrichment and
misappropriation. Ticketmaster filed a Second Amended Complaint on April 21,
2000.
On March 3, 2000, Ticketmaster filed a motion for preliminary
injunction, requesting the Court to enjoin Tickets.com from, among other things,
deep-linking to Ticketmaster's internal web pages, accessing Ticketmaster's
computers and computer systems and copying Ticketmaster's event pages, and
providing misleading and false information about Ticketmaster, the availability
of tickets on the Ticketmaster Web Site and the relationship between
Ticketmaster and Tickets.com. The hearing date on Ticketmaster's motion for
preliminary injunction currently is scheduled for July 10, 2000. On May 30,
2000, Tickets.com filed its Answer to Ticketmaster's Second Amended Complaint
and Counterclaims against Ticketmaster Corporation and Ticketmaster
Online-CitySearch, Inc. Tickets.com alleges claims for relief against
Ticketmaster for violations of the Sherman Act, sections 1 and 2, violations of
California's Cartwright Act, violations of California's Business and Professions
Code section 17200, violations of common law restraint of trade and unfair
competition and business practices, interference with contract and declaratory
relief. Tickets.com claims that Ticketmaster Corporation's exclusive agreements
with Ticketmaster Online-CitySearch, Inc., venues, promoters and other third
parties injure competition, violate antitrust laws, constitute unfair
competition and interfere with Tickets.com's prospective economic advantages.
Ticketmaster's responsive pleading currently is due on July 19, 2000.
Ticketmaster intends to vigorously defend this litigation. There can be no
assurance that we or Ticketmaster Corporation or our affiliates will not become
the subject of future governmental investigations or inquiries or be named as a
defendant in claims alleging violations of federal or state antitrust laws or
any other laws. Any adverse outcome in such litigation, investigation or
proceeding against us or Ticketmaster Corporation or our affiliates could limit
or prevent ticketmaster.com from engaging in its online ticketing business or
subject us to potential damage assessments, all of which could have a material
adverse effect on our business, financial condition or results of operations.
Regardless of its merit, source or outcome, any such litigation, investigation
or proceeding would at a minimum be costly and could divert the efforts of our
management and other personnel from productive tasks, which could have a
material adverse effect on our business, financial condition or results of
operations.
ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR
BUSINESS, DILUTE STOCKHOLDER VALUE AND ADVERSELY AFFECT OUR OPERATING RESULTS.
As part of our business strategy, we intend to make acquisitions of or
significant investments in, complementary companies, products or technologies.
For example, we recently completed our acquisitions of cityauction.com,
match.com, One & Only Network, the Sidewalk assets, 2b Technology and TicketWeb.
In addition, we made investments in foodline.com, an online restaurant
reservation company, FairMarket, Inc., an online auction company, and
ActiveUSA.com, an online participatory sports reservation and registration
company. These acquisitions and investments and any future acquisitions and
investments are and will be accompanied by the risks commonly encountered in
acquisitions of companies. These risks include, among other things:
- the difficulty of assimilating the operations and personnel of
the acquired companies;
- the potential disruption of our ongoing business;
- the diversion of resources from our existing businesses, sites
and technologies;
- the inability of management to maximize our financial and
strategic position through the successful incorporation of the
acquired technology into our products and services;
- additional expense associated with amortization of acquired
intangible assets;
- the maintenance of uniform standards, controls, procedures and
policies; and
- the impairment of relationships with employees and customers
as a result of any integration of new management personnel.
21
<PAGE>
There can be no assurance that we would be successful in overcoming
these risks or any other problems encountered with such acquisitions. Our
inability to overcome such risks could dilute our stockholder value and
materially adversely affect our operating results.
OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE DO NOT MAINTAIN THE VALUE OF OUR
DOMAIN NAMES.
We currently hold and license various Web domain names relating to our
brand, including the "citysearch.com", "cityauction.com", "match.com",
"ticketmaster.com", "sidewalk.com", "museumtix.com" and "ticketweb.com" domain
names. The acquisition and maintenance of domain names generally is regulated by
governmental agencies and their designees. The regulation of domain names in the
United States and in foreign countries is subject to change. Governing bodies
may establish additional top-level domains, appoint additional domain name
registrars or modify the requirements for holding domain names. As a result,
there can be no assurance that we will be able to acquire or maintain relevant
domain names in all countries in which we conduct business. Furthermore, the
relationship between regulations governing domain names and laws protecting
trademarks and similar proprietary rights is unclear. We, therefore, may be
unable to prevent third parties from acquiring domain names that are similar to,
infringe upon or otherwise decrease the value of our trademarks and other
proprietary rights. Any such inability could have a material adverse effect on
our business, financial condition and results of operations.
WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS THAT MAY AFFECT THE PRICE OF OUR
STOCK.
Our Amended and Restated Certificate of Incorporation, our Amended and
Restated Bylaws and the Section 203 of the Delaware General Corporation Law
contain provisions that may render more difficult, or have the effect of
discouraging, unsolicited takeover bids from third parties or the removal of our
incumbent management. These provisions include the right of the holders of the
Class A Common Stock to 15 votes per share, versus one vote per share for the
holders of Class B Common Stock and provide that the stockholders may not call
special meetings. In addition, our Amended and Restated Certificate of
Incorporation authorizes the Board of Directors to issue, without stockholder
approval, 2,000,000 shares of preferred stock, par value $.01 per share, with
voting, conversion and other rights and preferences that could adversely affect
the voting power or other rights of the holders of our Common Stock. Although we
have no current plans to issue any shares of Preferred Stock, the issuance of
Preferred Stock or rights to purchase Preferred Stock could render more
difficult, or have the effect of discouraging, unsolicited takeover bids from
third parties or the removal of incumbent management, or otherwise adversely
affect the market price for the Class B Common Stock. Although such provisions
do not have a substantial practical significance to investors while USAi,
through its ownership of Class A Common Stock, is in a position to effectively
control all matters affecting us, such provisions could have the effect of
depriving stockholders of an opportunity to sell their shares at a premium over
prevailing market prices should USAi no longer be in such control.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "intend," "potential," or "continue" or the negative of such terms
or other comparable terminology. These statements are only predictions. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including the risks outlined under "Risk Factors" and elsewhere in this
prospectus.
22
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
our Class B Common Stock by the selling stockholders pursuant to this
prospectus.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
selling stockholders as of June 27, 2000:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED NUMBER OF SHARES OFFERED SHARES BENEFICIALLY OWNED
SELLING STOCKHOLDER PRIOR TO OFFERING AFTER OFFERING
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard Tyler (1) 697,173 697,173 -
-------------------------------------------------------------------------------------------------------------------
Andrew Dreskin (2) 359,150 359,150 -
-------------------------------------------------------------------------------------------------------------------
African Media Entertainment
Limited (3) 358,446 358,446 -
-------------------------------------------------------------------------------------------------------------------
Edge Net Fund LLC (4) 113,123 113,123 -
-------------------------------------------------------------------------------------------------------------------
Bottom of the Hill Limited 1,100* 1,100 -
Partnership (5)
-------------------------------------------------------------------------------------------------------------------
Andrew Rasiej 423* 423 -
-------------------------------------------------------------------------------------------------------------------
Cocktail Blue LLC (6) 2,201* 2,201 -
-------------------------------------------------------------------------------------------------------------------
Doug Kaufmann (7) 2,934* 2,934 -
-------------------------------------------------------------------------------------------------------------------
Jesse Morreale (7) 2,934* 2,934 -
-------------------------------------------------------------------------------------------------------------------
Chris Swank (7) 2,934* 2,934 -
-------------------------------------------------------------------------------------------------------------------
MCP Promotions Limited (8) 6,229* 6,229 -
-------------------------------------------------------------------------------------------------------------------
Bravo Entertainment, LLP (9) 7,702* 7,702 -
-------------------------------------------------------------------------------------------------------------------
Thomas Beck 3,889 3,889 -
-------------------------------------------------------------------------------------------------------------------
Mark A. Beer 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
David B. Benedict 3,889 3,889 -
-------------------------------------------------------------------------------------------------------------------
Michael D. Bennis 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Glenn Bergoffen 3,111 3,111 -
Leah Bergoffen
-------------------------------------------------------------------------------------------------------------------
John D. Bertuzzi 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Lloyd C. Blankfein 24,888 24,888 -
-------------------------------------------------------------------------------------------------------------------
Richard J.F. Bronks 12,444 12,444 -
-------------------------------------------------------------------------------------------------------------------
Chris Carrera 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Chrystie Street Co., LLP 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Gary D. Cohn 31,110 31,110 -
-------------------------------------------------------------------------------------------------------------------
Edith W. Cooper 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
R. George Cranmer 12,444 12,444 -
-------------------------------------------------------------------------------------------------------------------
Richard J. Cranmer 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Edwin Smith Crooks 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Ralph P. Davidson 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
William D. Davis 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Oral Dawe 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Michael Dritz 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Isabelle Ealet 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
The Easterfield Trust 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
John A. Edwards, Jr. 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Ernest R. Esakoflos Ins. Trust 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
B.J. Fabric 778 778 -
-------------------------------------------------------------------------------------------------------------------
Alfred Feldman 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Barbara Frinsch 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Peter Gerhard 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Irwin Goldberg 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
J. Michael Gottesman 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
J. Michael Gottesman Pension Plan
and Trust 1,556 1,556 -
-------------------------------------------------------------------------------------------------------------------
Mark Greenberg 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Harold Greisman 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
George Haulon 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Roger J. Hechstin 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Glenn P. Hofferber 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
John Iglehart 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Thomas Iguizio 778 778 -
-------------------------------------------------------------------------------------------------------------------
William Jiler 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Philip L. Kalker 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Michell Kirschner 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Anne C. Kolker 4,666 4,666 -
-------------------------------------------------------------------------------------------------------------------
Curtis S. Lane 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Arthur Langel 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Pierre F. Lapeyre, Jr. 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Shen Hong Ho Lee 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
David M. Leuschen 4,666 4,666 -
-------------------------------------------------------------------------------------------------------------------
William Lyga 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Michael S. Marchisi 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
John William McMahon 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Wilma Morse 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Paul Oscher 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Joseph N. Palma, Inc. 1,555 1,555 -
Defined Benefit Plan
-------------------------------------------------------------------------------------------------------------------
Louis Parascondola 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
James Pearson 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Harry Pierandri 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Edward A. Reiss, Inc 1,555 1,555 -
Defined Benefit Pension
Plan
-------------------------------------------------------------------------------------------------------------------
Jeffrey A. Resnick 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Kenneth Riso 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Ivan Gallegos Rivas 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
George Rosenfeld 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Lee A. Rubenstein 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Richard Ruzicka 4,666 4,666 -
-------------------------------------------------------------------------------------------------------------------
Paul H. Ryan 12,444 12,444 -
-------------------------------------------------------------------------------------------------------------------
Stephen Scala 4,666 4,666 -
Donna Scala
-------------------------------------------------------------------------------------------------------------------
John Sfondrini 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Everett A. Sheslow 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Armin Silbersmith 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Douglas Smith 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Richard H. Suger 6,222 6,222 -
-------------------------------------------------------------------------------------------------------------------
Trade Consultants Pension Plan 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Charles P. Tuke 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Gary I. Wadler 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Martin J. Weinberg 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Elisha Wiesel 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Richard H. Winn 3,111 3,111 -
-------------------------------------------------------------------------------------------------------------------
Samuel W. Winn 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
Stern, Keiser, Panken & 3,111 3,111 -
Wohl Profit-Sharing Plan
-------------------------------------------------------------------------------------------------------------------
Linda Yarden 1,555 1,555 -
Chris Smith
-------------------------------------------------------------------------------------------------------------------
William B. Young 1,555 1,555 -
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Designates shares of our Class B Common Stock issuable upon exercise of
warrants. The warrants were originally issued by TicketWeb and assumed by us in
connection with our acquisition of TicketWeb in May 2000.
(1) Mr. Richard Tyler currently serves as a consultant to
TicketWeb pursuant to a consulting agreement with TicketWeb
and us. Pursuant to a lock-up arrangement, the 697,173 shares
of our Class B Common Stock beneficially owned by Mr. Tyler
include 289,040 shares which may not be sold by Mr. Tyler
until November 26, 2000 and 192,219 shares which may not be
sold by Mr. Tyler until May 26, 2001.
(2) Mr. Andrew Dreskin currently serves as President and Chief
Executive Officer of TicketWeb pursuant to an employment
agreement with TicketWeb and us. Pursuant to a lock-up
arrangement, the 359,150 shares of our Class B Common Stock
beneficially owned by Mr.
23
<PAGE>
Dreskin include 148,899 shares which may not be sold by
Mr. Dreskin until November 26, 2000 and 99,022 shares which
may not be sold by Mr. Dreskin until May 26, 2001.
(3) Pursuant to a lock-up arrangement, the 358,446 shares of our
Class B Common Stock beneficially owned by African Media
Entertainment Limited include 77,173 shares which may not be
sold by African Media Entertainment Limited until May 26,
2001.
(4) Pursuant to a lock-up arrangement, the 113,123 shares of our
Class B Common Stock beneficially owned by Edge Net Fund LLC
include 21,780 shares which may not be sold by Edge Net Fund
LLC until November 26, 2000 and 91,331 shares which may not
be sold by Edge Net Fund LLC until May 26, 2001.
(5) Pursuant to an agreement between TicketWeb and Bottom of the
Hill Limited Partnership, TicketWeb has the right to act as a
non-exclusive agent for the sale of tickets to Bottom of the
Hill's events.
(6) Pursuant to an agreement between TicketWeb and Cocktail Blue
LLC, TicketWeb has the right to act as a non-exclusive agent
for the sale of tickets to Cocktail Blue's events.
(7) Messrs. Kaufmann, Morreale and Swank are principals of Nobody
In Particular Presents (NIPP). Pursuant to an agreement
between TicketWeb and NIPP, TicketWeb is the exclusive ticket
seller for certain events promoted by NIPP.
(8) Pursuant to an agreement among TicketWeb, TicketWeb (UK)
Limited, a wholly-owned subsidiary of TicketWeb, and MCP
Promotions Limited, TicketWeb (UK) Limited is the preferred
ticket agent for all of the events promoted by MCP.
(9) Pursuant to an agreement between TicketWeb and Bravo
Entertainment, LLP, TicketWeb is the exclusive ticket seller
for certain events promoted by Bravo.
The shares described above were originally issued by us in
connection with our acquisition of TicketWeb Inc. or will be issued upon the
exercise of warrants which we assumed in connection with such acquisition.
Our acquisition of TicketWeb is described more fully under "Prospectus
Summary-Recent Developments." The shares were issued pursuant to exemptions
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"). The shares are being registered by us pursuant to the
Agreement and Plan of Merger, dated May 26, 2000, by and among us, TMCS
Merger Sub, Inc., a wholly-owned subsidiary of ours, and TicketWeb Inc.
Pursuant to the Agreement and Plan of Merger and Stockholder Support
Agreements by and among us, TMCS Merger Sub, TicketWeb and each of Richard
Tyler, Andrew Dreskin, African Media Entertainment Limited and Edge Net Fund
LLC, an aggregate of 459,744 of the shares issued by us to Richard Tyler,
Andrew Dreskin, African Media Entertainment Limited and Edge Net Fund LLC may
not be transferred until November 26, 2000 and an aggregate of 459,744 of the
shares issued by us to Richard Tyler, Andrew Dreskin, African Media
Entertainment Limited and Edge Net Fund LLC may not be transferred until
May 26, 2001. The number of shares subject to such restrictions will be
adjusted as described more fully under "Prospectus Summary - Recent
Developments."
24
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders (and their respective donees, distributees,
pledgees and personal representatives) may, from time to time, offer for sale
and sell or distribute the shares of our Class B Common Stock offered hereby
in transactions executed on the Nasdaq National Market, in negotiated
transactions, private sales or through other means. The selling stockholders
under some circumstances might be deemed underwriters under the Securities
Act. Sales may be effected at market prices prevailing at the time of sale or
at such other prices as may be negotiated by the selling stockholders. The
shares may be sold by one or more of the following, in each case subject to
applicable lock-up arrangements: (a) a block trade in which the broker-dealer
so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
a purchase by a broker-dealer as principal and resale by such broker-dealer
for its account pursuant to this prospectus; (c) an exchange distribution in
accordance with the rules of such exchange; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; (e)in
ordinary brokerage transactions in which the broker solicits purchasers or
executes unsolicited orders, or transactions in which the broker may acquire
the shares as principal and resell the shares into the public market in any
manner permitted by the selling shareholders under this prospectus; (f) in
connection with the pledge of shares registered hereunder to a broker/dealer
or other pledgee to secure debts or other obligations, and the sale of the
shares so pledged upon a default; and (g) through the writing or settlement
of non-traded and exchange-traded put or call option contracts, and by means
of the establishment or settlement of other hedging transactions including
forward sale transactions. In addition, the selling shareholders may loan
their shares to broker/dealers who are counterparties to hedging transactions
and such broker/dealer may sell the shares so borrowed into the public
market, subject to applicable lock-up arrangements. In effecting sales,
broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in the resales.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders in amounts
to be negotiated in connection with the sale of shares. Such broker-dealers or
agents and any other participating broker-dealers may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act in
connection with such sales and any such commission, discount or concession may
be deemed to be underwriting discounts or commissions under the Securities Act.
In addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus. In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers.
The selling stockholders will be responsible for any fees,
disbursements and expenses of any counsel for the selling stockholders. We will
be responsible for all other expenses incurred in connection with the
registration of the shares offered hereby, including SEC registration fees,
printer's and accounting fees, and the fees, disbursements and expenses of our
counsel. Commissions and discounts, if any, attributable to the sales of the
shares offered hereby will be borne by the selling stockholders. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. We have agreed to
indemnify the selling stockholders against certain liabilities in connection
with the offering of the shares, including liabilities arising under the
Securities Act.
We have undertaken to keep a registration statement of which this
prospectus constitutes a part effective until the earlier of (a) the date on
which all of the shares offered hereby have been sold by the holders thereof or
(b) the date on which all of the shares offered hereby may be sold pursuant to
Rule 144, without regard to volume limitations. After such period, if we choose
not to maintain the effectiveness of the registration statement of which this
prospectus constitutes a part, the shares offered hereby may not be sold,
pledged, transferred or assigned, except in a transaction which is exempt under
the provisions of the Securities Act or pursuant to an effective registration
statement thereunder.
25
<PAGE>
LEGAL MATTERS
The validity of our Class B Common Stock to be offered in this
prospectus will be passed upon for us by Gibson, Dunn & Crutcher LLP, Los
Angeles, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may inspect
and copy these reports, proxy statements and other information at the public
reference facilities of the SEC at:
- Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
- 7 World Trade Center, Suite 1300, New York, New York 10048; and
- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois, 60661.
You may also obtain copies of these materials from the public reference section
of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. You should call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC also maintains an Internet web site that
contains reports, proxy and information statements and other information
regarding companies and other persons that file electronically with the SEC. The
SEC's Internet web site address is http:\\www.sec.gov. You may inspect reports
and other information that we file at the offices of Nasdaq Operations, 1735 K
Street, N.W., Washington, D.C. 20006.
We have filed a registration statement and related exhibits with the
SEC under the Securities Act. The registration statement, which includes this
prospectus, contains additional information about our company and the shares to
be sold by the selling stockholders. You may inspect the registration statement
and exhibits without charge at the office of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and you may obtain copies from the SEC at prescribed
rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we
file with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and the information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the following documents that we have filed with the SEC:
- Annual Report on Form 10-K for the year ended December 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
- Current Report on Form 8-K filed January 28, 2000;
- Current Report on Form 8-K filed April 20, 2000;
- Current Report on Form 8-K filed June 2, 2000; and
26
<PAGE>
- The description of our Class B Common Stock contained in our
Registration Statement on Form 8-A (File No. 000-25041) filed on
November 6, 1998, pursuant to Section 12(g) of the Exchange Act,
including any amendment or report filed for the purpose of
updating such description.
27
<PAGE>
We are also incorporating by reference additional documents that we may
file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act between the date of the prospectus and the termination of the offering of
the shares offered hereby. You may request a copy of these filings at no cost,
by writing or telephoning us at the following address and phone number:
Ticketmaster Online-CitySearch, Inc.
Attn: Chief Financial Officer
790 E. Colorado Boulevard, Suite 200
Pasadena, California 91101
Telephone: (626) 405-0050
28
<PAGE>
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with different information.
1,865,434 SHARES
TICKETMASTER ONLINE-CITYSEARCH, INC.
CLASS B COMMON STOCK
----------------
29
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We will pay all expenses incident to the offering and sale to the
public of the shares being registered including any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. Such expenses are set
forth in the following table except commissions, discounts and transfer taxes.
All of the amounts shown are estimates, except for the SEC registration fee:
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
ITEM
<S> <C>
SEC Registration fee.............................................. $9,910
Nasdaq listing fee................................................ 17,500
Printing fees and expenses........................................ 5,000
Accounting fees and expenses...................................... 10,000
Legal fees and expenses........................................... 10,000
Blue Sky fees and expenses........................................ 5,000
Transfer agent and registrar fees................................. 5,000
Miscellaneous..................................................... 5,000
Total............................................................. $67,410
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We are a Delaware corporation. Section 145 of the General Corporation
Law of the State of Delaware (the "Delaware Law") empowers a Delaware
corporation to indemnify any persons who are, or are threatened to be made,
parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
action by or in the right of such corporation), by reason of the fact that such
person was an officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
Our Amended and Restated Certificate of Incorporation provides for the
indemnification of directors to the fullest extent permissible under Delaware
law.
The effect of these provisions is to eliminate our rights and the
rights of our stockholders (through stockholders' derivative suits on our
behalf) to recover monetary damages against a director for breach of fiduciary
duty of care as a director (including breaches resulting from negligent or
grossly negligent behavior), except in certain limited situations. These
provisions do not limit or eliminate our rights or any of our stockholder's
rights to
II-1
<PAGE>
seek non-monetary relief such as an injunction or rescission in the event of
a breach of a director's duty of care. These provisions will not alter the
liability of directors under federal securities laws.
Our Amended and Restated Bylaws provide for the indemnification of
officers, directors and third parties acting on behalf of us if such person
acted in good faith and in a manner reasonably believed to be in and not opposed
to our best interest, and, with respect to any criminal action or proceeding,
the indemnified party had no reason to believe his conduct was unlawful.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE NOTES
<S> <C> <C>
2.1 Agreement and Plan of Reorganization, among CitySearch,
Inc., MB Acquisition Corporation, MetroBeat, Inc., Mark
Davies and Joshua White, dated May 31, 1996. (A)*
2.2 Amended and Restated Agreement and Plan of Reorganization, among CitySearch, Inc.,
Tiberius, Inc., USA Networks, Inc., Ticketmaster Group, Inc., Ticketmaster Corporation and
Ticketmaster Multimedia Holdings, Inc., dated August 12, 1998. (A)
2.3 Agreement and Plan of Reorganization, dated January 8, 1999, by and among Ticketmaster
Online-CitySearch, Inc., Nero Acquisition Corp., Inc., CityAuction, Inc., Andrew Rebele
and Monica Lee as amended. (B)
2.4 Agreement and Plan of Reorganization, dated as of February 8,1999, by and among USA
Networks, Inc., Ticketmaster Online-CitySearch, Inc., Lycos, Inc., USA Interactive Inc.,
Lemma, Inc. and Tycho, Inc. (the "Merger Agreement"), including Form of Certificate of
Designations, Preferences and Rights of Series A Convertible Redeemable Preferred Stock of
USA/Lycos Interactive Networks, Inc. (Exhibit B to the Merger Agreement). (C)
2.5 Exchange Agreement by and among Cendant Corporation, Cendant Intermediate Holdings, Inc.
and Ticketmaster Online-CitySearch, Inc. dated as of May 14, 1999. (D)
2.6 Agreement and Plan of Reorganization dated June 10, 1999 among Ticketmaster
Online-CitySearch, Web Media Ventures LLC (dba One & Only Network) and William Bunker,
David Kennedy and Glenn Wiggins. (D)
2.7 Agreement and Plan of Merger by and among Sidewalk.com, Inc., Microsoft Corporation and
the Registrant, dated as of July 19, 1999. (E)
2.8 Agreement and Plan of Merger by and among the Registrant, TMCS Merger Sub, Inc., 2b
Technology, Inc., Bryan Bostic, Eric Martin, Live Oak Holdings, L.C., Clarke Holding,
L.C., and Kenneth Bostic, dated as of January 30, 2000. (G)
2.9 Agreement and Plan of Merger by and among the Registrant,
TMCS Merger Sub, Inc. and TicketWeb Inc., dated as of May
23, 2000. +
4.1 Specimen Class B Common Stock Certificate. (F)
4.2 Form of Class B Common Stock Purchase Warrant of the Registrant to be delivered upon
closing of the Sidewalk acquisition (3,000,000 shares). (E)
4.3 Form of Class B Common Stock Purchase Warrant of the Registrant to be delivered upon
closing of the Sidewalk acquisition (1,500,000 shares). (E)
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of
the securities being registered.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE NOTES
<S> <C> <C>
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (included in Exhibit 5.1).
</TABLE>
-------------------------
+ Filed previously.
* Confidential treatment has been granted with respect to portions of this
exhibit.
(A) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-64855) filed with the Commission on September 30, 1998.
(B) Incorporated by reference to the Company's Report on Form 10-K filed with
the Commission on March 31, 1999.
(C) Incorporated by reference to exhibits filed in response to Item 7,
"Exhibits," of the Report on form 8-K filed by USA Networks, Inc. (File
No. 000-20570) with the Commission on February 26, 1998.
(D) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-81761) filed with the Commission on June 29, 1999.
(E) Incorporated by reference to exhibits filed in response to Item 6,
"Exhibits," of the Report on Form 10-Q filed with the Commission on
August 16, 1999.
(F) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-64855) filed with the Commission on November 6, 1998.
(G) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-3 (File No.
333-30884) filed with the Commission on February 22, 2000.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities and Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. UNDERTAKING IN RESPECT OF INCORPORATED ANNUAL AND QUARTERLY REPORTS
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
D. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or
II-4
<PAGE>
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
E. UNDERTAKING PURSUANT TO RULE 430A
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pasadena, California, on the 27th day of June, 2000.
TICKETMASTER ONLINE-CITYSEARCH, INC.
By: /S/ JOHN PLEASANTS
-----------------------
John Pleasants
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
----------------------------------------- ----------------------------------------- --------------
<S> <C> <C>
*/S/ JOHN PLEASANTS Chief Executive Officer (Principal June 27, 2000
----------------------------------------- Executive Officer) and Director
John Pleasants
*/S/ THOMAS MCINERNEY Chief Financial Officer, Executive Vice June 27, 2000
----------------------------------------- President, Finance and Treasurer
Thomas McInerney (Principal Financial and Accounting
Officer)
*/S/ BARRY BAKER Director June 27, 2000
-----------------------------------------
Barry Baker
*/S/ TERRY BARNES Director June 27, 2000
-----------------------------------------
Terry Barnes
*/S/ CHARLES CONN Director June 27, 2000
-----------------------------------------
Charles Conn
*/S/ BARRY DILLER Director June 27, 2000
-----------------------------------------
Barry Diller
*/S/ JOSEPH GLEBERMAN Director June 27, 2000
-----------------------------------------
Joseph Gleberman
</TABLE>
II-6
<PAGE>
<TABLE>
<S><C>
*/S/ WILLIAM GROSS Director June 27, 2000
-----------------------------------------
William Gross
*/S/ ALLEN GRUBMAN Director June 27, 2000
-----------------------------------------
Allen Grubman
*/S/ LAWRENCE JACOBSON Director June 27, 2000
-----------------------------------------
Lawrence Jacobson
*/S/ VICTOR A. KAUFMAN Director June 27, 2000
-----------------------------------------
Victor A. Kaufman
*/S/ DARA KHOSROWSHAHI Director June 27, 2000
-----------------------------------------
Dara Khosrowshahi
*/S/ BRYAN LOURD Director June 27, 2000
-----------------------------------------
Bryan Lourd
*/S/ WILLIAM D. SAVOY Director June 27, 2000
-----------------------------------------
William D. Savoy
*/S/ ALAN SPOON Director June 27, 2000
-----------------------------------------
Alan Spoon
*/S/ THOMAS UNTERMAN Director June 27, 2000
-----------------------------------------
Thomas Unterman
</TABLE>
* By: /S/ BRADLEY K. SERWIN
----------------------
Bradley K. Serwin
Attorney-In-Fact
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE NOTES
------ ------------- -----
<S> <C> <C>
2.1 Agreement and Plan of Reorganization, among CitySearch, Inc.,
MB Acquisition Corporation, MetroBeat, Inc., Mark Davies and Joshua White,
dated May 31, 1996. (A)*
2.2 Amended and Restated Agreement and Plan of Reorganization, among CitySearch, Inc.,
Tiberius, Inc., USA Networks, Inc., Ticketmaster Group, Inc., Ticketmaster Corporation and
Ticketmaster Multimedia Holdings, Inc., dated August 12, 1998. (A)
2.3 Agreement and Plan of Reorganization, dated January 8, 1999, by and among Ticketmaster
Online-CitySearch, Inc., Nero Acquisition Corp., Inc., CityAuction, Inc., Andrew Rebele
and Monica Lee as amended. (B)
2.4 Agreement and Plan of Reorganization, dated as of February 8,1999, by and among USA
Networks, Inc., Ticketmaster Online-CitySearch, Inc., Lycos, Inc., USA Interactive Inc.,
Lemma, Inc. and Tycho, Inc. (the "Merger Agreement"), including Form of Certificate of
Designations, Preferences and Rights of Series A Convertible Redeemable Preferred Stock of
USA/Lycos Interactive Networks, Inc. (Exhibit B to the Merger Agreement). (C)
2.5 Exchange Agreement by and among Cendant Corporation, Cendant Intermediate Holdings, Inc.
and Ticketmaster Online-CitySearch, Inc. dated as of May 14, 1999. (D)
2.6 Agreement and Plan of Reorganization dated June 10, 1999 among Ticketmaster
Online-CitySearch, Web Media Ventures LLC (dba One & Only Network) and William Bunker,
David Kennedy and Glenn Wiggins. (D)
2.7 Agreement and Plan of Merger by and among Sidewalk.com, Inc., Microsoft Corporation and
the Registrant, dated as of July 19, 1999. (E)
2.8 Agreement and Plan of Merger by and among the Registrant, TMCS Merger Sub, Inc., 2b
Technology, Inc., Bryan Bostic, Eric Martin, Live Oak Holdings, L.C., Clarke Holding,
L.C., and Kenneth Bostic, dated as of January 30, 2000. (G)
2.9 Agreement and Plan of Merger by and among the Registrant, TMCS Merger Sub, Inc. and
TicketWeb Inc., dated as of May 23, 2000. +
4.1 Specimen Class B Common Stock Certificate. (F)
4.2 Form of Class B Common Stock Purchase Warrant of the Registrant to be delivered upon
closing of the Sidewalk acquisition (3,000,000 shares). (E)
4.3 Form of Class B Common Stock Purchase Warrant of the Registrant to be delivered upon
closing of the Sidewalk acquisition (1,500,000 shares). (E)
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the securities being
registered.
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (included in Exhibit 5.1).
</TABLE>
-------------------------
II-8
<PAGE>
+ Previously filed.
* Confidential treatment has been granted with respect to portions of
this exhibit.
(A) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-64855) filed with the Commission on September 30, 1998.
(B) Incorporated by reference to the Company's Report on Form 10-K filed with
the Commission on March 31, 1999.
(C) Incorporated by reference to exhibits filed in response to Item 7,
"Exhibits," of the Report on form 8-K filed by USA Networks, Inc. (File
No. 000-20570) with the Commission on February 26, 1998.
(D) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-81761) filed with the Commission on June 29, 1999.
(E) Incorporated by reference to exhibits filed in response to Item 6,
"Exhibits," of the Report on Form 10-Q filed with the Commission on August
16, 1999.
(F) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-1 (File No.
333-64855) filed with the Commission on November 6, 1998.
(G) Incorporated by reference to exhibits filed in response to Item 16,
"Exhibits," of the Company's Registration Statement on Form S-3 (File No.
333-30884) filed with the Commission on February 22, 2000.
II-9
