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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): APRIL 29, 1998
EXCITE, INC.
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(Exact name of Registrant as specified in its charter)
CALIFORNIA
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(State or other jurisdiction of incorporation)
0-28064 77-0378215
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(Commission (IRS Employer
File Number) Identification No.)
555 Broadway, Redwood City, CA 94063
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(Address of principal executive offices) (Zip Code)
(650) 568-6000
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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ITEM 5: OTHER EVENTS.
Netcenter Services Agreement
On April 29, 1998, Excite, Inc. (the "Company"), entered into a
Netcenter Services Agreement (the "Netcenter Agreement") with Netscape
Communications Corporation ("Netscape"). Under the Netcenter Agreement, the
Company will provide programming and content for Netscape's recently announced
Netcenter service. The Netcenter service is expected to feature topical content
channels, nine of which will be co-branded with Excite. The Company will provide
programming and content for these nine co-branded channels (Education, Games,
Lifestyle, Autos, Health, Arts & Leisure, Real Estate, Auctions and Shopping).
The Netcenter service will also include a Web search function (the
"Netcenter Widget Tool") featuring, in addition to the Excite Network's and
other companies' search services, a search service and a directory service that
will be developed and operated by the Company (subject to Netscape's right to
assume responsibility for programming all or part of the directory service).
Furthermore, the Company's Classifieds2000 service will be featured as the
provider of classified advertising, excluding career-related advertising,
throughout Netcenter.
The Company will continue to be featured as a "Premier Provider" on
Netscape's Net Search page and will be similarly featured on the Netcenter
Widget Tool. Excite's services have been allocated 25% of the random rotation of
premier provider listings from the Net Search page for the two-year term of the
Netcenter Agreement, with Netcenter receiving 25% and 50% of the rotation during
the first and second years of the term of the agreement, respectively. Netscape
has guaranteed that Excite will receive a certain number of impressions from the
Net Search page and a certain number of click-throughs from the Netcenter Widget
Tool over the term of the Netcenter Agreement. Netscape has also guaranteed that
the Netcenter search service will receive a certain number of page views and
that the co-branded Netcenter channels will receive a certain number of page
views over the term of the Netcenter Agreement.
The Netcenter Agreement expires two years from the date of the
launch of the Netcenter service and may be terminated sooner in the event of
certain types of changes in control with respect the Company or Netscape.
The information set forth in the Company's press release dated May
4, 1998 and filed as an exhibit to this report is incorporated herein by
reference.
Warrant Agreement
On April 29, 1998, in connection with the Netcenter Agreement, the
Company and Netscape entered into a Warrant Agreement (the "Warrant Agreement")
pursuant to which Netscape was granted two warrants (the "Warrants") to purchase
shares of Common Stock of the Company having an aggregate exercise price of up
to $50 million. One of the Warrants is immediately exercisable for up to 423,079
shares of Common Stock at an exercise price per share of approximately $59.09
and will expire on April 30, 2000. A second warrant (the "Subsequent Warrant"),
which does not become exercisable until April 30, 1999 and which will expire
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on April 30, 2000, will entitle Netscape to purchase up to a number of shares of
Common Stock as is determined by dividing $25 million by the average closing
sale price of one share of Common Stock for the thirty most recent trading days
ending on the third day preceding April 30, 1999.
In the event that Netscape does not enter into an agreement with a
term of at least two years with the Company's MatchLogic subsidiary on or before
May 22, 1998, whereby Netscape (i) utilizes certain of MatchLogic's services and
(ii) is obligated to pay to MatchLogic a certain minimum payment, then the
foregoing $25 million shall be reduced to $10 million.
The Subsequent Warrant may become exercisable prior to April 30,
1999 in the event of certain corporate transactions involving the Company or
Netscape.
Promissory Note
In order to fund in part the Company's prepayment obligations to
Netscape under the Netcenter Agreement, the Company entered into a $50 million
promissory note (the "Note"). The Note bears interest at a rate of 5.9% per
annum and matures on the earlier to occur of October 30, 1998 or the completion
by the Company of a secondary public offering.
AT&T Agreement
In May 1998 the Company announced it had entered into a three-year
agreement with AT&T Corp. to provide dial-up access to an online service to be
named "Excite Online Powered by AT&T WorldNet." Users of the service will have
dial-up access for a personalized Excite page and will be able to access
Internet-based, multimedia communications services such as click-to-dial
directories, anonymous voice chat, and conference calling controlled from the
Web
Forward-Looking Statements
The press releases filed as exhibits to this report include "safe
harbor" language, pursuant to the Private Securities Litigation Reform Act of
1995, indicating that certain statements about the Company's business contained
in the press releases are "forward-looking" rather than "historic." The press
releases also state that a more thorough discussion of factors affecting the
Company's operating results is included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 and the Company's other reports
filed with the Securities and Exchange Commission.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
99.1 Press Release dated May 4, 1998.
99.2 Press Release dated May 6, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EXCITE, INC.
Date: May 11, 1998 By: /s/ ROBERT C. HOOD
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Robert C. Hood
Executive Vice President, Chief
Administrative
Officer and Chief Financial Officer
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EXHIBIT INDEX
Exhibit 99.1 Press Release dated May 4, 1998.
Exhibit 99.2 Press Release dated May 6, 1998.
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Exhibit 99.1
FOR IMMEDIATE RELEASE
Netscape and Excite Announce Strategic Partnership to Dramatically Alter The
Internet Portal Landscape; Excite to Provide Netscape Branded Search, Co-Branded
Channels and Advertising Sales for Netcenter
MOUNTAIN VIEW, Calif. and REDWOOD CITY, Calif., May 4 /PRNewswire/ -- Netscape
Communications Corporation (Nasdaq: NSCP) and Excite, Inc. (Nasdaq: XCIT) today
announced a multi-faceted strategic partnership to build out channels jointly
for Netscape's Web site and to create co-branded search. Combining the strengths
of two of the biggest names on the Internet -- Netscape and Excite -- the
companies will develop content and search services, and sell advertising to
leverage Netscape's highly-trafficked Web site.
One of the largest partnerships ever established on the Internet, the agreement
is expected to have substantial positive impact on both Netscape and Excite. The
deal serves as the catalyst for Netscape's major push into the Internet portal
space. For Excite, which will now build out and sell advertising for portions of
Netcenter, one of the largest portal sites on the Web, the deal is expected to
increase the company's revenue potential, brand visibility and reach to new
Internet users. Continuing Excite's aggressive expansion efforts, the deal also
extends Excite's Classifieds2000 across Netscape's Web site. For Netscape, the
deal enhances Netcenter with essential consumer services, provides a recurring
revenue stream and allows Netscape to build user loyalty by recirculating search
traffic to all Netcenter services. Excite will be responsible for all
advertising sales for the co-branded channel pages on Netscape Netcenter and for
both Netscape and Excite branded search, enabling Excite to sell to advertisers
the Web's largest network of inventory in one package. Advertising revenues from
co-branded channel pages and co-branded search results pages will be shared.
"This agreement demonstrates Netscape's commitment to execute quickly on its
plans to grow Netcenter into a major portal with all the essential consumer and
business services," said Mike Homer, executive vice president and general
manager of Netscape's Web site division. "By partnering with Excite, an Internet
leader which has demonstrated expertise in content programming and navigation,
Netscape is well on its way to expanding Netcenter into a leading Internet
portal. This agreement marks another major step in our plan to turn Netcenter
into the destination of choice for millions of users on the Net who are seeking
content, services and software."
"Netscape's home page is one of the most valuable assets on the Internet," said
George Bell, president and chief executive officer of Excite, Inc. "This
agreement allows us to extend our own brand visibility, reach and revenues while
increasing the value of Netscape Netcenter. Further, this deal strengthens our
subsidiary Classifieds2000, which becomes the preferred classifieds provider
across the Netscape service. Ultimately, the deal is the perfect marriage of
Excite's
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programming, brand, revenue-generating capabilities and consumer expertise with
Netscape's brand, audience and reach."
Excite Programs Co-branded Channels and Search for Netscape's Web Site
Excite has been selected to program a portion of Netscape's Web site and to
power Netscape's new branded search service. The Netscape Net Search page will
be a combination of Netscape's new branded search powered by Excite, Excite
search and other search providers. The branded Netscape Search will provide
search results for the entire Internet as well as key links to Netscape
Netcenter programs. In year one, Netscape's new branded search powered by Excite
will serve as a premier provider, initially receiving at least 25 percent of the
Net Search rotation -- the percentage of pages served to visitors who have not
selected a preferred provider. The other 50 percent will be allocated or divided
among additional search providers. In the second year of the agreement, Netscape
Search powered by Excite will receive at least 50 percent rotation, while Excite
search will continue to receive 25 percent rotation. The other 25 percent will
be allocated or divided among additional search providers. Netscape plans to
launch its new branded search service and channels by the end of June 1998.
Building Out Netcenter
At launch, Excite will program a significant package of Netcenter's upcoming
consumer channels, including Arts & Leisure, Auctions, Autos, Classifieds,
Education, Games, Lifestyles, Real Estate and Shopping. Excite will program the
Netscape Shopping channel with Excite's unique product search technology, Jango.
All pages will be co-branded. In addition, Netscape will continue to develop
additional channels through best-of-breed partnerships for Computing, Business,
Finance, News, Sports, Entertainment, Local Information and Kids & Family.
Excite's subsidiary Classifieds2000, the leading provider of online classifieds,
will be the preferred provider of classifieds across Netscape's Web site.
The strategic agreement also includes marketing and technology licensing between
the two companies. These additional assets provide value for both parties during
the two-year agreement.
About Excite, Inc.
Founded in 1994, Excite, Inc. is a global media company offering consumers a
free online service with a simple front end to the Internet and extensive
personalization capabilities, and advertisers the best one-to-one marketing
services available online. The Excite Network consists of two of the largest
brands on the Web, Excite (www.excite.com) and WebCrawler (www.webcrawler.com),
and its subsidiaries; Classifieds2000, MatchLogic, Inc., Excite Japan Co., Ltd.
and Excite UK, Ltd. Personalized versions of Excite are available in France,
Germany, the UK and Japan. Localized versions are available in The Netherlands,
Sweden and Australia. Based in Redwood City, Calif., Excite, Inc. has strategic
relationships with America Online, Inc., Intuit Inc., Netscape Communications
Corp., Prodigy Internet and Tribune Company.
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About Netscape
Netscape Communications Corporation is a leading provider of open software and
services for linking people and information over enterprise networks and the
Internet. The company offers a full line of clients, servers, development tools
and commercial applications to create a complete platform for next-generation,
online applications. Traded on Nasdaq under the symbol NSCP, Netscape
Communications Corporation is based in Mountain View, California.
Additional information on Netscape Communications Corporation is available on
the Internet at http://home.netscape.com, by sending email to [email protected]
or by calling 650-937-2555 (corporations) or 650-937-3777 (individuals).
NOTE: Netscape, Netscape Navigator, and the Netscape N logo are registered
trademarks of Netscape Communications Corporation in the United States and other
countries. Other Netscape logos, product names, and service names are also
trademarks of Netscape Communications Corporation, which may be registered in
other countries. Other product and brand names are trademarks of their
respective owners.
This press release includes forward-looking statements within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934. These
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These statement are not
guarantees of future performance and are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed or forecasted, including the uncertain future development of the
Internet as an advertising medium, the volatility of the stock price of
Internet-focused companies in general and Excite in particular, the traffic and
usage levels on Netscape's Web site and Excite's search engine and the
uncertainties attendant upon any contractual relationship. Further risks and
uncertainties include, without limitation: the continued increases in the number
of companies advertising on Netscape's Web site and the Excite Network; either
company's ability to increase sales of targeted advertisements and to achieve
higher costs per thousand impressions for their advertisements; the intensely
competitive environment for Web advertising sales; reductions in market prices
for Web advertising as a result of competition or otherwise; increases in the
amount of traffic on Netscape's Web site and the Excite Network and increases in
the amount of use of Netscape's Web site and the Excite Network by Web users;
Excite's increased operating expenses resulting from the agreement with Netscape
and the attendant risks to Excite's ability to achieve profitability; Excite's
increased negative cash flows resulting from the agreement with Netscape; the
companies' ability to integrate successfully Excite's content and technology
with the other content, technology and services offered on Netscape's Web site;
other risks relating to these companies such as their extremely limited
operating history upon which to base any revenue projections; the likely
fluctuations in operating results of both companies' operations due to factors
beyond their control; and the willingness of other Web sites to continue to
purchase advertising on Netscape's Web site (particularly those which are direct
competitors of Excite. For a more detailed discussion of these and other
relevant risks, see Netscape's most recent filings with the U.S. Securities &
Exchange Commission, including Form 10-K and 10-Q, as well as Excite's
comparable filings.
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Exhibit 99.2
Company Press Release
AT&T and Excite Team Up to Offer Internet-based Communications Services and
"Excite Online Powered by AT&T WorldNet Service"
Companies To Accelerate Growth of Online Communications And Offer Easy Dial-up
Web Access
REDWOOD CITY, Calif. & NEW YORK--(BUSINESS WIRE)--May 6, 1998-- AT&T and Excite,
Inc. today announced a three-year, multifaceted agreement including
Internet-based multimedia communications services and a new online service
called "Excite Online Powered by AT&T WorldNet(r) Service." The advanced
Internet based services will expand consumers' ability to communicate in
cyberspace. Excite OnLine will offer consumers fast, easy and reliable dial-up
access to Excite's personalized front-end to the Internet.
As part of the agreement, Excite and AT&T will offer Internet- based, multimedia
communications services such as click-to-dial directories, anonymous voice chat,
and conference calling controlled from the Web. For example, an Excite user
visiting a chat room will be able to turn that keyboard-based session into a
verbal chat with another participant without disclosing his or her phone number,
thereby preserving the anonymity inherent in online chat. These services are
based on new technologies from AT&T Labs.
Excite Online powered by AT&T WorldNet Service, which will be competitively
priced, will be one of the easiest and fastest ways for consumers to get online.
The service will launch in June with nationwide dial-up access and Excite's
personalized online services. The service will also offer consumers the help
they need to effectively use the Internet. Consumers will be able to take
advantage of AT&T's world-class customer-service capabilities, which will be
integrated into the Excite online experience. AT&T and Excite will jointly
market the service to consumers.
"AT&T and Excite are combining the information and communications capabilities
of the Internet in a way that greatly enhances the value of both to customers,"
said Dan Schulman, president of AT&T WorldNet Service. "Advanced communications
services like click-to-dial directories and voice-enabled anonymous chat are
examples of the power of this combination. This is the next in a series of steps
AT&T is taking to bring consumers the benefits of the communications revolution
made possible by the Internet."
"We want to make it as easy as possible for people to not only get things done
when they are on the Web, but to get online as easily as possible," said George
Bell, president and CEO of Excite, Inc. "Offering an Internet connection
directly to consumers is the next step in giving them everything they need
online, inexpensively from home without a busy signal. The powerful combination
of AT&T's Internet access service and penetration of the consumer marketplace,
combined with Excite's leading Internet service, provide the opportunity to
build the largest online service for accessing the Internet."
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In the near future, AT&T will also offer Excite users a selection of AT&T
services through a co-branded "Personal Communications Center" on the Excite
site (www.excite.com and www.webcrawler.com). The center will appear as a link
on selected areas of Excite, including the home page and personalized pages, and
will serve as the user's point-and-click gateway to AT&T's communications
services.
Initially, the Personal Communications Center will provide users with online
access to four AT&T services:
o AT&T One Rate(SM) Online long distance service, which enables consumers to
order AT&T long distance service online, with monthly charges billed to a
major credit card. AT&T One Rate online features a nine-cents-per-minute long
distance rate for Excite-registered users on their direct-dialed, state-to-
state calls made from home.
o AT&T Wireless Services, which is the largest wireless service provider in the
United States. Its Digital PCS (Personal Communications Service) lets callers
send short messages over the Internet to other Digital PCS subscribers.
o AT&T Prepaid Calling Cards, which offer consumers a convenient way to call
from any Touch-Tone phone.
o AT&T WorldNet Service, the largest pure Internet service provider in the
United States and the provider of Internet access for Excite Online in the
United States.
Founded in 1994, Excite is a global media company offering consumers a free
online service with a simple front end to the Internet and extensive
personalization capabilities, and advertises the best one-to-one marketing
services available online. The Excite Network consists of two of the largest
brands on the Web, Excite (www.excite.com) and WebCrawler (www.webcrawler.com),
and its subsidiaries: Classifieds2000, MatchLogic, Inc., Excite Japan Co., Ltd.,
and Excite UK, Ltd. Personalized versions of Excite are available in France,
Germany, the UK, and Japan. Localized versions are available in The Netherlands,
Sweden, and Australia. Based in Redwood City, Calif., Excite, Inc. has strategic
relationships with America Online, Inc., Intuit, Inc., Netscape Communications
Corp., Prodigy Internet, and Tribune Company.
AT&T is the world's premier voice and data communications company, serving more
than 90 million customers, including consumers, businesses and government. With
annual revenues of more than $51 billion and some 126,000 employees, AT&T
provides services to more than 280 countries and territories around the world.
AT&T runs the world's largest, most powerful long-distance network and the
largest digital wireless network in North America. The company is a leading
supplier of data and Internet services for businesses and the nation's largest
direct Internet service provider to consumers.
AT&T WorldNet is a registered service mark of AT&T. AT&T One Rate is a service
mark of AT&T
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Contact:
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Mike Miller
AT&T
(908) 221-5372
[email protected]
or
Melissa Walia
Excite
(650) 569-2213
[email protected]
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