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) February 6, 1999
Commerce Group Corp.
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(Exact name of registrant as specified in its charter)
Delaware 1-7375 39-6050862
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(State or other (Commission File Number) (IRS Employer
jurisdiction Identification No.)
of incorporation)
6001 North 91st Street, Milwaukee, Wisconsin 53225-1795
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 462-5310
fax: (414) 462-5312
<PAGE>
Item 5. Other Events Material Disclosure
On January 27, 1999, the Company entered into an agreement with The
Interactive Business Channel, Inc. (The IBC) of Irvine, California to
develop an Internet business with the Company's wholly-owned subsidiary,
Piccadilly Advertising Agency, Inc. (PAA) and to provide the Company with
public relations services designed to give the Company more exposure on
the Internet. The January 27, 1999 Agreement is included as Exhibit A.
The business plan for Ecomm is included and referred to as Exhibit B.
In respect to the development of an Internet business, the Company has
agreed to transfer 49% of the shares of (PAA) to The IBC. PAA is a
Wisconsin corporation organized on July 9, 1974, to provide the Company
and its affiliates with advertising services and it does not have an
ownership interest in the Company's mining or other assets. On January
27, 1999, PAA's articles of incorporation were amended to change the name
of the Corporation to Ecomm Group Inc.(Ecomm), and Ecomm reserved the
domain name of ECOMMGROUP.COM. Ecomm's business strategy is to build its
Web portal through the acquisition and consolidation of selected Internet
companies. It presently has a letter of intent to acquire an Internet
company and has discussed the acquisition or merger with several other
Internet companies. It plans to launch its site prior to June 30, 1999.
In respect to the public relations services made as part of the January
27, 1999 agreement, The IBC has agreed to disseminate information
regarding the Company on the Internet with a view towards developing a
more widespread interest in the Company. The IBC was fully advised that
the Company has been advised by the National Association of Securities
Dealers Automated Quotations Systems SmallCap (and/or the Nasdaq Stock
Market or Nasdaq - AmexMarket Group-Nasdaq) that it will be delisted
unless on or before February 10, 1999, the Company evidences a
closing bid price equal to or greater than $1.00 per share. The Company
agreed to pay The IBC minimum compensation for its public relations and
consulting work in the form of 10,000 shares of the Company's common
stock, and also agreed to issue warrants to purchase 500,000 shares of
the Company's common stock at the price of $0.10 per share if the
conditions imposed by Nasdaq for the Company's continued listing are met.
On January 29, 1999, the Company issued a press release entitled
"Commerce Group Corp. Subsidiary Plans New Web Portal To Model Go2Net
Strategy And Invites Web Sites To Participate In Acquisition Program." On
January 28, 1999, at approximately 17:29 C.D.T., the Company had provided
Nasdaq with an advance copy of the press release pursuant to Nasdaq
Marketplace Rule 4120 and had received no comments.
On January 29, 1999 at 16:28:43 Nasdaq halted the trading of the
Company's shares. Also on January 29, 1999, Nasdaq requested
information from the Company which the Company in turn furnished on
January 31, 1999. On February 1, 1999, Nasdaq requested additional
information which the Company furnished on February 3, 1999. The Company
had a telephone conference call with Nasdaq personnel on Thursday,
February 4, 1999 at approximately 4:00 p.m. C.D.T.
<PAGE>
Additional information on the Companies' expected business relationship
with The IBC follows:
Development of a Website and the Acquisition of Internet companies
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The IBC has informed the Company that it has owned and operated the
ibchannel.com website since June of 1997, and that its website has grown
to over 500,000 hits in January 1999. The IBC plans to develop Ecomm
primarily by outsourcing production work to web design and development
companies. The IBC has identified the key aspects of launching Ecomm's
Internet business in the near future. Ecomm's business strategy is to
build its web portal through the acquisition and consolidation of
selected Internet companies. Ecomm will review, evaluate, structure and
acquire or merge Internet businesses; then it plans to combine them into
its web portal. Ecomm presently has a letter of intent to acquire an
Internet company and its president has discussed the acquisition or
merger with several other Internet companies. In addition, the Company
and The IBC have agreed to use their respective expertise to develop and
incorporate a website related to the mining industry.
The Web portal will be set up in the following manner. The new websites
that Ecomm acquires will function autonomously, but will be linked
together and share the same brand name. Ecomm has arranged to have its
own site, which will be launched soon. The Web portal will be
maintained by The IBC and the companies it acquires and does not require
substantial additional personnel. Technical support, marketing,
advertising, and website maintenance will be handled by Ecomm Group Inc.
and the companies it acquires. The IBC has been retained to assist the
company in the aforementioned areas. Ecomm is currently evaluating data
vendors such as Quote.Com, Zacks.Com, BigCharts. Ecomm plans to purchase
Web Ware's Portal in a Box, which provides companies with a turnkey Web
Portal Web Site.
The Web portal will derive revenue from e-commerce, joint venturers,
strategic alliances and from other revenue streams. The Web portal will
serve any Internet customers seeking services including: free e-mail,
chat, free web pages, auctions, and instant messaging. Its potential
customers will be the customers that the acquired Internet companies have
and it will build on that base through marketing and advertising.
In consideration of the foregoing, the Company agreed to issue at no cost
to The IBC the ownership of 49% of Ecomm's common shares. On January 31,
1999, Mr. Matthew Marcus was elected as the President and Director of
Ecomm. Mr. Edward A. Machulak (son of Edward L. Machulak) the Director,
Executive Vice President and Secretary of the Company continues his
position as the Secretary and Director of Ecomm. One of his companies,
MacPak, Inc., has developed an on-line city guide portal named miy.com
and his company has been developing websites for others. Mr. Edward L.
Machulak, the Company's Chairman, Chief Executive Officer and Treasurer
continues his position as the Treasurer and as a Director of Ecomm.
<PAGE>
Public relations and communications services
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The IBC has agreed to provide on-going professional guidance to the
Company for the purpose of enhancing the Company's exposure in order to
meet the National Association of Security Dealers Automated Quotations
System Small-Cap requirements to maintain a one dollar ($1.00) or higher
bid price.
Among other things, The IBC has agreed to publicize the Company at its
existing website (http://www.ibchannel.com) where it intends to present
summary information on the Company, create a hyperlink to the Company's
own website and the Company's stock quote, chart, and related
information, and provide a means for investors to obtain information on
the Company through an e-mail request. The IBC has agreed to update the
website as needed, forward e-mail leads to the Company, and develop and
maintain lead database. The IBC has agreed to feature the Company in The
IBC Newsletter (http://www.ibchannel.com/stockline.shtml.) and provide a
link to its discussion group (http://www.thestocktalk.com).
In consideration for The IBC services to be rendered, the Company has
agreed to issue warrants to The IBC under the following conditions:
The parties recognize that Nasdaq has notified the Company that unless
its stock trades above $1.00 bid per share for ten consecutive trading
days prior to February 10, 1999, it will be delisted from the exchange.
If the Company's stock trades above $1.00 bid per share for ten
consecutive trading days prior to this deadline, and meets the Nasdaq
requirements, the Company will issue to The IBC warrants to purchase
500,000 shares of its ten cent ($0.10) par value common stock at a price
of ten cents ($0.10) per share. If the warrants are exercised the
Company will issue shares from those shares it has reserved under its
existing Form S-8 Registration Statement No. 333-59209. Although the
parties in good faith believe that these shares can be issued for
services provided under this agreement, the Company made no warranty or
assurance that this is the case. As compensation for its public
relations and other consulting services, the Company has agreed to convey
to The IBC a minimum of 10,000 shares of its common stock, ($0.10 par
value).
<PAGE>
In addition, the Company is including the following news releases as
exhibits:
Exhibit C
Commerce Group Corp. Subsidiary Plans New Web Portal To Model Go2Net
Strategy And Invites Web Sites To Participate In Acquisition Program.
Exhibit D
Commerce Group Corp. Provides Information to Nasdaq And Continues To
Trade On The Boston Stock Exchange Under The Symbol CMG
Exhibit E
The Boston Stock Exchange Halts Trading of Commerce Group Corp.'s Shares
After Its Subsidiary Announces Plans To Develop a New Web Portal.
This document includes certain "forward-looking statements" within the
meaning of Section 21E of the United States Securities Exchange Act of
1934, as amended. All statements other than statements of historical
fact, included herein, including without limitation, statements regarding
potential mineralization and reserves, exploration results, and future
plans and objectives of Commerce Group Corp. ("Commerce"), are
forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate,
and actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from Commerce's expectations are
disclosed under various sections of this and other documents filed from
time to time with the United States Securities and Exchange Commission,
the Boston Stock Exchange, Inc., and the National Association of Security
Dealers Automated Systems.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMERCE GROUP CORP.
(Registrant)
/s/ Edward L. Machulak
Date: February 6, 1999 --------------------------
By: Edward L. Machulak
President
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EXHIBIT A
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Ecomm Group Inc.
6001 North 91st Street
Milwaukee, WI 53225
(414) 462-5310
BUSINESS
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Ecomm Group Inc. is an interactive technology and media company that
believes that a significant opportunity exists to develop and consolidate
certain fragmented niches of the Internet community into a web portal.
Ecomm Group Inc.'s principal business is to evaluate, structure and
complete Internet related business combinations in the form of investment
in or a merger or acquisition of, prospects consisting of private
companies, partnerships or sole proprietorships.
THE OPPORTUNITY
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Because the Internet is growing so rapidly, specialized or niche portals
are being developed as the hubs or gateways to the Internet for groups of
individuals with specific interests. For example, iVillage and Women.com
are Internet portals for women, c/Net (NASDAQ: CNET) and ZDNet (NYSE: ZD)
are Internet portals for computers and technology, and MecklerMedia's
(NASDAQ: MECK). Internet.com is a portal to the Internet for Internet
technology and business.
Ecomm's new web portal will provide a full range of the web's most
popular services. These services include free web-based e-mail similar
to HotMail (NASDAQ: MSFT), free web page communities similar to GeoCities
(NASDAQ: GCTY), chat communities similar to TalkCity, auctions similar
to e-Bay (NASDAQ: EBAY) and uBid (NASDAQ: UBID), targeted advertising
similar to DoubleClick (NASDAQ:DCLK) and Flycast, instant messaging
similar to America Online (NYSE: AOL), a personalized start page similar
to Netscape (NASDAQ: NSCP) , product suggestion similar to Amazon.com
(NASDAQ:AMZN), a topical Internet Directory similar to Yahoo (NASDAQ:
YHOO), and e-commerce similar to OnSale (NASDAQ:ONSL) and Digital River
(NASDAQ: DRIV).
In terms of business or finance content, there is a wealth of financial
resources and information available on the Internet. However, few Web
sites provide custom commodity information combined with quality
proprietary content from business and financial writers and analysts. In
addition, as use of the Internet expands, Ecomm Group Inc. believes that
there will be an increasing demand for Internet-related information
ranging from elementary aspects of the Internet to the latest Internet
software and technology enhancements, as well as the other corresponding
products and services. Ecomm Group Inc. believes that a significant
opportunity exists to exploit certain niches of the Internet user
community by providing business and finance related content.
<PAGE>
The Company's Internet site seeks to attract what Ecomm Group Inc.
believes is the typical Internet user of today (18 to 39 years old,
middle- to upper-middle class and college-educated) and the advertisers
wishing to reach this target market. In order to reach this target market
and advertisers, the Company's Internet site seeks to provide:
* An Interactive online environment in which content is updated
frequently and visitors are active participants, interacting with both
users and one another;
* Content that captures and retains visitors interest by entertaining,
providing varying perspectives and encouraging users to participate or
take action on the information provided;
* Ease of use of the Internet site through its design, communication and
navigation features and tools; and advertising and sponsorship
opportunities through an approach combining brand integration, animated
advertising, product promotion and content area sponsorship.
The Company's objective is to be a leading provider of content on the
World Wide Web, specifically in the areas of business and finance. Ecomm
Group Inc. focuses on utilizing innovative technologies to deliver its
content and to enhance the attractiveness and utility of its product
offerings with specially designed graphics and animation. The Company's
Goal is to provide interactive content in all of its content areas, and
to seek advertisers and sponsors who wish to access the demographic
groups using the Company's Internet site.
INDUSTRY BACKGROUND
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Growth of the Internet and the World Wide Web
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The Internet is a global collection of thousands of computer networks
interconnected to enable commercial organizations, educational
institutions, government agencies and individuals to communicate
electronically, access and share information, and conduct business. Much
of the growth to date in the use of the Internet by businesses and
individuals is due to the emergence of the World Wide Web. The World Wide
Web is a network medium that includes a wide range of content and
activities. Within the World Wide Web there can be found content such as
magazines, news and sports information, radio broadcasts, and corporate,
product, educational, research and political information, as well as
activities such as customer service, electronic commerce, hotel and
airline reservations, banking, games and discussion groups. Electronic
documents or "Web pages," which may contain textual, audio and video
information, are published on the World Wide Web on what is referred to
as a "Web site" in a comm on format. Users can view and move among these
Web pages by using software called "Web browsers" such as Netscape
Navigator or Microsoft Internet Explorer. Users specify which electronic
documents they wish to view with their Web browser by entering a
document's unique electronic Web address, or Universal Resource Locator
("URL").
<PAGE>
International Data Corporation estimates that the number of Internet
users is projected to reach 199 million users in 1999, of which 125
million users are estimated to be accessing the World Wide Web. Ecomm
Group Inc. believes that the growth in the number of Internet users and
Web sites has been fueled principally by significant investments by
leading technology and computer software companies, public interest and
the potential pervasive effect of the Internet on virtually every
industry. In particular, the existing and increasing number of personal
computers in the workplace and at home, improvements in the performance
and speed of personal computers and modems, the development of
easy-to-use graphical user interfaces, improvements in the network
infrastructure, the enhanced ease of access to the Internet by Internet
service providers, consumer-oriented Internet services and long-distance
telephone companies, the emergence of standards for Internet navigation
and information access and the declining costs of Internet service have
all been contributing factors to the current growth in the use of the
Internet and the World Wide Web by businesses and individuals.
<PAGE>
Content on the Internet and in Traditional Media
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The World Wide Web provides the opportunity for Internet content
providers to create a product that is timely, interactive, and offers
information in a manner not typically produced by traditional forms of
media. While the print media can be comprehensive with respect to its
subject matter and the television broadcast media is well-suited to
conveying content with a high degree of audio and visual information,
each generally lacks interactivity and the information provided thereby
cannot be personalized or customized. In addition, the print media lacks
the ability to provide real-time information and the television broadcast
media typically offers only a broad coverage of the subject matter. Web
sites can offer the user archives, related stories and other tools to
enhance the attractiveness and utility of the information received. The
World Wide Web also makes it possible to deliver personalized, real-time
information to the user through software applications that allow the user
to customize and manipulate the information accessed. The delivery of
Internet content may be used not only to address a user's preferences,
but also to optimize, among other things, the utility thereof based on
the user's computer hardware, software and bandwidth. Ecomm Group Inc.
believes that many of the more prominent Web sites have been successful
in creating "virtual communities" by offering the user opportunities to,
among other things, congregate, trade information, make purchases and
interact with the content and/or programs. Ecomm Group Inc. believes that
Web sites that have been successful in building a "virtual community"
among its users have been able to significantly increase the number of
users accessing their particular Web site.
Ecomm Group Inc. believes that new technologies developed specifically
for use on the Internet, such as the "Java" programming language
developed by Sun MicroSystems, Inc., will help to fuel continued growth
in the use of the Internet. The Java programming language represents an
evolution of languages such as "C" and "C++." It combines the simplicity
of "C" with object oriented principles found in "C++" and adds, among
other things, platform independence and what Ecomm Group Inc. believes is
an effective security model. In theory, a computer program written in
Java may be run on any operating system, eliminating the expense and work
involved in porting computer code between platforms. Java also offers
security features that enable the safe execution of downloaded computer
code, which has accelerated a shift in distribution models from
shrink-wrapped software to direct electronic delivery via the Internet.
Two of the most widely used Web browsers, Netscape Navigator and
Microsoft Inte rnet Explorer, both employ the use of Java.
<PAGE>
Business Opportunities on the Internet
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Ecomm Group Inc. believes that the leading Internet content providers
will benefit from the increasing number of Internet users since
advertisers will more likely advertise on Web sites that demonstrate a
high volume of user traffic and provide advertising programs designed for
specific demographic groups. As a result, Ecomm Group Inc. believes that
a significant opportunity exists for companies providing original,
entertaining, informative and compelling content on the Internet. Ecomm
Group Inc. believes that a significant opportunity exists to exploit
certain niches of the Internet user community by providing business and
finance related content. Ecomm Group Inc. believes that the Internet
market for advertising will continue to grow in the foreseeable future.
According to Jupiter Communications, the market for Internet-based
advertising and sponsorships amounted to approximately $55 million in
1995, and is expected to grow to approximately $4 billion by the year
2000.
Ecomm Group Inc. believes that an important factor in the recognition of
the World Wide Web as a legitimate advertising medium is the ability to
direct advertising to specific user groups, directly distribute targeted
information to users on an individualized basis and receive timely
feedback from users. Current technology allows Web sites to monitor the
demographics of their users and deliver specific information to the
advertisers and advertising agencies. Ecomm Group Inc. believes that
continued improvements in the tools and technologies used to measure user
response to advertisements on the Internet and to track purchasing
decisions should increase the effectiveness and attractiveness of
Internet-based advertising. The emerging model for advertising rates is
that advertisers pay a premium for a targeted audience. The Internet can
also provide the user with direct access to the advertiser with
"click-through" advertisements, where an electronic transaction is
capable of occurring immediately if the advertiser has a Web site capable
of conducting sales and purchases via the Internet. Another perceived
advantage of Internet-based advertising is that such advertising can be
evaluated and monitored daily, and in the future should be capable of
being monitored in real-time. If an Internet-based advertisement is not
delivering the anticipated results, an advertiser can remove the
advertisement within a short period of time and replace it with an
advertisement that may be more likely to deliver the anticipated results.
In light of increased growth in the number of Internet users, certain
content providers charge a subscription fee for users to access certain
of their content as an additional revenue source. These subscription fees
are charged to either supplement advertising revenues or as an entirely
separate revenue model. For example, ESPNET.Sportszone charges its users
for fantasy sports league participation, and selected sports columns, and
Individual, Inc. charges for use of its NewsPage Web site, which provides
a customized Internet newspaper. Additionally, Ecomm Group Inc. believes
that the growth of the Internet and its adaptation to commercial use
presents a significant new opportunity for merchants to reach a wider
customer base. However, before Internet commerce can experience
significant growth, consumers, merchants and financial institutions must
be satisfied that the electronic manifestations of existing payment
methods are as safe, convenient and secure as their current counterpar
ts. No assurance can be given that such safe, convenient and secure
Internet payments can be developed or, if developed, can be effectively
used by, or be cost efficient for, most Internet users.
<PAGE>
STRATEGY
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The Company's objective is to be a leading provider of content on the
World Wide Web, specifically in the areas of business and finance. The
Company's goal is to provide interactive content in all of its content
areas, and to seek advertisers and sponsors who wish to access the
demographic groups using the Company's Internet site. The inability of
Ecomm Group Inc. to achieve any portion of its strategic goals may have a
material adverse effect on its business, financial condition and
operating results. There can be no assurances that Ecomm Group Inc. will
be able to achieve any of such goals and, if not so achieved, that it
will be able to develop and implement alternative strategic goals. Key
elements of the Company's strategy include: Provide Compelling and
Targeted Content. Ecomm Group Inc. seeks to create content that is
original, entertaining, informative and compelling. The Company's Web
site content focuses on what Ecomm Group Inc. believes are currently the
most popular are as of interest on the Internet: business and finance.
Ecomm Group Inc. seeks to offer information in these areas which is
written by content contributors with demonstrated expertise, experience
and notoriety in their fields. Ecomm Group Inc. supplements the content
provided by these contributors with supporting commodity and other
information and content provided by its in-house editorial staff. In
addition, Ecomm Group Inc. recognizes that as its content areas grow, it
may be useful to spin off certain content areas as their own URL's in
order to maximize department revenues, and maximize the navigational
intuitiveness and usability of the department.
In addition, Ecomm Group Inc. believes that the creation of a virtual
community for the content found on its Web site is an important component
in determining who chooses to access its Web site. In particular, the
Company's content contributors and editors interact with users through
electronic mail, and online question and answer sessions. Ecomm Group
Inc. also encourages its users to submit articles and questions directly
to its Web site. Ecomm Group Inc. hopes to provide content that is formed
through an interaction between the Company's editorial staff and the
users.
<PAGE>
Establish Market Awareness and Brand Recognition
------------------------------------------------
Ecomm Group Inc. believes that establishing and maintaining the
Company's brand is a critical element of its operating strategy. Ecomm
Group Inc. plans to create a brand identity that is built around
authoritative commentary and innovative delivery of information. In this
regard, Ecomm Group Inc. has placed significant emphasis on establishing
brand identity for its product offerings. The Company's brand and
corporate identity seeks to reflect an Internet site that provides a
well-balanced array of programming with varying perspectives. Ecomm Group
Inc. will seek to build and reinforce its brand through advertising on
the Internet; in trade magazines and in other traditional forms of media;
editorial coverage; and a public relations strategy that includes
frequent press releases. Ecomm Group Inc. also believes that its brand
will be reinforced as a result of the consistent design and imagery
associated with each department of its Web site. Ecomm Group Inc.
believes that by successful ly building its brand, there will be
opportunities to expand into new content offerings.
Leverage Strategic Relationships. Ecomm Group Inc. seeks to leverage its
current resources and infrastructure by entering into strategic
relationships with third party developers of content and Internet-related
technologies. Ecomm Group Inc. believes that these relationships will
enhance the Company's product offerings while leveraging the Company's
development, sales and marketing resources. Ecomm Group Inc. has
established relationships with a number of leading information providers
with respect to a significant portion of the commodity information
included in the Company's Internet site. These relationships enable Ecomm
Group Inc. to complement its proprietary content offerings with
information developed or compiled by third parties.
Focus on Advertising Sales. Ecomm Group Inc. seeks to differentiate
itself from other Internet companies by offering advertising and
sponsorship opportunities that combine brand integration, animated
advertising, product promotion and content area sponsorship. Ecomm Group
Inc. seeks to assist sponsors and advertisers in promoting their products
by providing alternatives to banner advertisements, which are the current
advertising standard on the World Wide Web.
STRATEGIC RELATIONSHIPS
-----------------------
Ecomm Group Inc. intends to leverage its current development resources
and infrastructure by entering into strategic and licensing relationships
with third party developers of content and technologies. Ecomm Group Inc.
has established relationships with a number of leading information
providers
Ecomm Group Inc. is currently negotiating agreements with Quote.Com,
Zacks.Com, BigCharts, and many other data vendors which Ecomm Group
Inc. believes will enhance its brand recognition and potentially expand
its user base.
<PAGE>
REVENUE SOURCES
---------------
Sponsors/Advertisers: The typical advertiser being sought by Ecomm Group
Inc. for its Web site is a large corporation or organization which
currently advertises nationally in print, radio, television or electronic
media. Ecomm Group Inc. seeks to establish advertising relationships with
these potential advertisers through its own marketing and advertising
sales department and to supplement these efforts from time to time
through national advertising agencies. The pricing strategy will
generally be based on the number of impressions delivered, with the goal
of incentivizing advertisers to sign longer term agreements. No
assurance, however, can be given that such pricing strategy can be
implemented, or if implemented, will result in significant advertising
revenues to the Company.
Subscriptions, Memberships and Other Transactions: Ecomm Group Inc.
believes that there may be possibilities to segment certain proprietary
content areas on the Company's Web site as subscription areas,
specifically with stock recommendations in the business area, which have
demonstrated popularity on the World Wide Web. As traffic to the
Company's Web site increases, Ecomm Group Inc. will review other
opportunities for deriving revenue, such as offering products and
services from advertisers and sponsors and itself, if safe, secure
electronic payments can be developed and widely implemented. There can be
no assurance that Ecomm Group Inc. will be able to initiate or
successfully operate electronic commerce, for itself or its
sponsors/advertisers, through its Web site.
ADVERTISING SALES
-----------------
Ecomm Group Inc. expects to derive substantially all of its revenues from
the sale of advertising on its Web site. Ecomm Group Inc. expects that
its Internet-based advertising revenues will be derived from the sale of
advertising and sponsorships by the Company's direct sales department
supplemented from time to time with the use of national advertising
agencies. To date, Ecomm Group Inc. has generated no cash advertising or
sponsorship revenues.
Ecomm Group Inc. seeks to help grow the businesses of its potential
sponsors and advertisers by providing an alternative to banner
advertising, which is the current standard on the World Wide Web. To
this end, Ecomm Group Inc. seeks to provide two advertising elements:
custom brand integration and company promotion. The Company's advertising
strategy is based on the concept of brand and product integration. Brand
logos are integrated into areas of the Company's Web site without
diminishing the presentation of the content. The brands are woven into
the design of the Web site in an attempt to hold a user's attention with
customized environments designed for each page. This approach is
consistent with the Company's endorsement of the sponsorship model for
advertising.
Ecomm Group Inc. believes that the sponsorship of Internet content will
play an increasingly important role in generating advertising revenues.
The World Wide Web is relatively new to sponsorships, but this concept
has been around for almost 50 years in traditional forms of media,
originating back in the days of Kraft Television Theater (1947) and the
Texaco Star Theater (1948) and continuing today through corporate
sponsorship of various forms of entertainment, such as sporting events
and concerts. The key element of this approach for the sponsor is that
the product or service becomes associated with the content or program.
Ecomm Group Inc. believes that tasteful, authentic sponsorships will lead
the user to believe that the sponsor is not being forced upon them, but
rather is presenting a value-added product and a content program.
<PAGE>
Ecomm Group Inc. seeks to offer each of its potential
sponsors/advertisers the opportunity to access the number of times their
advertisements are viewed on a daily basis through the establishment of a
private, dedicated URL located on the Company's Web servers. Ecomm Group
Inc. believes that this process will make it easier for the
sponsor/advertiser to monitor the success of a particular advertisement
on a daily basis, and will give the sponsor/advertiser more confidence in
the accuracy of the number of advertisement impressions delivered on the
Company's Web site. In order to further serve the sponsor/advertiser,
Ecomm Group Inc. plans to establish during 1997 a page on its Web site
where the user will be asked from time to time to respond to a short
survey in return for the opportunity to win prizes provided by either
Ecomm Group Inc. or a sponsor/advertiser. Ecomm Group Inc. believes that
such surveys may result in generating more interest in specific content
areas and attract sp onsorship interest. No assurance, however, can be
given that, if Ecomm Group Inc. is able to establish such a page on its
Web site, users will actually participate in such surveys or that
advertisers or sponsors will find such surveys of use or value to them.
Use of the Internet by consumers is at a very early stage of development,
and market acceptance of the Internet as a medium for information,
entertainment, commerce and advertising is subject to a high level of
uncertainty. Ecomm Group Inc. believes that its success depends upon its
ability to obtain significant revenues from its Internet operations,
which will require the development and acceptance of the Internet as an
advertising medium. Ecomm Group Inc. believes that most advertisers and
advertising agencies have limited experience with the Internet as an
advertising medium and neither advertisers nor advertising agencies have
devoted a significant portion of their advertising budgets to
Internet-related advertising to date. In order for Ecomm Group Inc. to
generate advertising revenues, advertisers and advertising agencies must
direct a portion of their budgets to the Internet as a whole, and
specifically to the Company's Internet site. There can be no assurance
that advertisers or advertising agencies will be persuaded, or able, to
allocate or continue to allocate portions of their budgets to
Internet-based advertising, or if so persuaded or able, that they will
find Internet-based advertising to be more effective than advertising in
traditional media such as television, print or radio, or in any event
decide to advertise on the Company's Internet site. Moreover, there can
be no assurance that the Internet advertising market will develop as an
attractive and sustainable medium, that Ecomm Group Inc. will achieve
market acceptance of its products or that Ecomm Group Inc. will be able
to execute its business strategy successfully. Acceptance of the
Internet among advertisers and advertising agencies will also depend on
the level of use of the Internet by consumers, which is highly uncertain,
and on the acceptance of the alternative new model of conducting business
and exchanging information presented by the Internet. Advertisers and
advertising agencies tha t have invested resources in traditional methods
of advertising may be reluctant to modify their media buying behavior or
their systems and infrastructure to use Internet-based advertising.
Furthermore, no standards to measure the effectiveness of Internet-based
advertising have yet gained widespread acceptance, and there can be no
assurance that such standards will be adopted or adopted broadly enough
to support widespread acceptance of Internet-based advertising. If
Internet-based advertising is not widely accepted by advertisers and
advertising agencies, the Company's business, financial condition and
operating results will be materially adversely affected and Ecomm Group
Inc. may cease to be a commercially viable enterprise.
<PAGE>
MARKETING
---------
The Company's marketing strategy is to enhance, promote and support a
perception that the Company's Internet offerings have a balance of
proprietary content and general subject matter in its content areas.
Ecomm Group Inc. believes that it is necessary to provide the Internet
user with content that allows them an opportunity to act on the
information provided. To that end, Ecomm Group Inc. has positioned its
technical team to supplement the content contributors and editors with
interactive elements. This enhances the ability of Ecomm Group Inc. to
provide Internet content that it believes to be creative, entertaining
and unique to the Internet medium.
Ecomm Group Inc. will focus on a marketing strategy that will include
informing all search/index guides and information Web sites about the
Company's Web site; periodic press releases promoting new content,
technologies, important hires and other strategic relationships; and
advertising on Web sites and in trade magazines.
Ecomm Group Inc. believes that the combination of a strong brand
identity and meaningful content is an approach that has been successful
to date for certain of the prominent Web sites. In order to implement its
marketing plan, Ecomm Group Inc. intends to routinely gather information
regarding the types of content that Internet users seek. Ecomm Group Inc.
intends to monitor users' needs and preferences primarily by periodically
conducting focus groups and encouraging users to provide input in the
form of electronic mail or soliciting such opinions through surveys
completed in conjunction with contests conducted by the Company.
Each of these elements of the Company's marketing plan will depend upon
the Company's ability to provide original, entertaining, informative and
compelling content, which cannot be assured. If Internet users do not
perceive the Company's Internet content to be such, or if Ecomm Group
Inc. introduces new content or Web sites, or enters into new business
relationships or strategies that are not favorably received, Ecomm Group
Inc. would likely be unsuccessful in promoting and implementing its
marketing plan. Furthermore, in order to attract and retain users and to
promote and implement its marketing plan, particularly in response to
competitive pressures, Ecomm Group Inc. may find it necessary to commit
greater financial and personnel resources to providing Internet content
or creating or maintaining its brand recognition. If Ecomm Group Inc. is
unable to provide the contemplated content or otherwise fail to establish
and maintain brand recognition, or if Ecomm Group Inc. incurs excess ive
expenses in an attempt to improve its content or implement its marketing
plan, the Company's business, financial condition and operating results
would be materially adversely affected. See "Risk Factors."
<PAGE>
RESEARCH AND DEVELOPMENT
------------------------
A focus of the Company's research and development efforts is the
enhancement of its content delivery and presentation through the use of
Java-based software applications. Examples of potential Java-based
software applications include the facilitation of multi-player games, a
Java interface to a metasearch engine and enhanced financial monitoring
and analysis tools. No assurance can be given that Ecomm Group Inc. will
be able to develop enhancements to its content delivery or presentation
or to develop any new Java-based software applications, or if so
developed, that such enhancements or applications will be commercially
viable.
Ecomm Group Inc. also focuses its research and development efforts on the
development of new content areas and services that address the needs or
preferences of certain demographic groups that, in the belief of
management, may be attractive to advertisers and sponsors. No assurance
can be given that Ecomm Group Inc. will be able to develop new content
areas or services, or if so developed, that such content areas or
services will be commercially viable.
COMPETITION
-----------
Ecomm Group Inc. competes with other Internet content providers for the
time and attention of consumers and for advertising and subscription
revenues. Competition among Internet content providers is intense and is
expected to increase significantly in the future. The Company's Internet
site competes against a variety of companies that provide similar content
through one or more media, such as print, radio, television and the
Internet. To compete successfully, Ecomm Group Inc. must develop and
deliver popular, original, entertaining, informative and compelling
Internet content to attract Internet users and to support advertising
and, in the future, subscription fees. In the Company's niche of business
and finance, sports and the Internet, in addition to competing with
numerous newspapers, magazines, television programs and radio broadcasts
that cover the same material, Ecomm Group Inc. competes with various
Internet content providers such as Starwave Corporation, Microsoft
Corporatio n, c/net, Inc., America OnLine, Inc., MGM Interactive, Inc.,
CompuServe, Inc., Prodigy Services Co., Excite, Inc., Infoseek
Corporation, Lycos, Inc., Netscape Communications Corporation, Time
Warner, Inc., PointCast Incorporated, SOFTBANK Corporation, Yahoo! Inc.,
SportsLine USA, Inc. and Wired Ventures, Inc. Many, if not all, of these
competitors also offer a wider range of services than does the Company,
which services may be sufficiently attractive to Internet users to
attract users to their services and, consequently, dissuade them from
accessing the Company's Internet site. If Ecomm Group Inc. is unable to
attract a significant number of Internet users to its Internet site, the
Company's business, financial condition and operating results will be
materially adversely affected and Ecomm Group Inc. may cease to be a
commercially viable enterprise.
<PAGE>
The market for Internet content and services is relatively new, intensely
competitive and rapidly evolving. There are minimal barriers to entry,
and current and new competitors can launch new Internet sites at
relatively low cost within relatively short time periods. In addition,
Ecomm Group Inc. competes for the time and attention of Internet users
with thousands of non-profit Internet sites operated by, among other
persons, individuals, government and educational institutions. Existing
and potential competitors also include magazine and newspaper publishers,
cable television companies and start-up ventures attracted to the
Internet market. Accordingly, Ecomm Group Inc. expects competition to
persist and intensify and the number of competitors to increase
significantly in the future. Should Ecomm Group Inc. seek in the future
to attempt to expand the scope of its Internet site, it will compete with
a greater number of Internet sites and other media companies. Because the
operations and strategic plans of existing and future competitors are
undergoing rapid change, it is extremely difficult for Ecomm Group Inc.
to anticipate which companies are likely to offer competitive content and
services in the future. There can be no assurance that the Company's
Internet site will compete successfully.
Ecomm Group Inc. believes that the competitive factors attracting
Internet users include the quality of presentation and the relevance,
timeliness, depth and breadth of information and services offered by the
Company. With respect to attracting advertisers and advertising agencies,
Ecomm Group Inc. believes that the competitive factors include, among
others, the number of users accessing the Company's Internet site, the
demographics of such user base, the Company's ability to deliver focused
and compelling advertising and interactivity through its Internet site
and the overall cost-effectiveness and value of advertising offered by
the Company. In addition, the success of the Company's business strategy
depends on the sale of future Internet advertising at premium prices,
based in part on the demographic characteristics of the Company's
Internet users. With respect to attracting subscription-based users in
the future, Ecomm Group Inc. believes that the competitive factors
include, amo ng others, the quality, uniqueness and usefulness of the
content being provided, the price charged for such content and the cost
and accessibility of similar content through the Internet or competing
media. Given the intense competition among Internet content providers and
other media, there can be no assurance that Ecomm Group Inc. will be able
to compete successfully with respect to any of these factors.
Many, if not all, of the Company's current and potential competitors have
significantly greater financial, editorial, technical and marketing
resources, longer operating histories, greater name recognition, and
greater experience than the Company; and also have established
relationships with advertisers and advertising agencies. Many, if not
all, of such competitors may be able to undertake more extensive
marketing campaigns, adopt more aggressive advertising and subscription
price policies and devote substantially more resources to developing
Internet content than the Company. There can be no assurance that Ecomm
Group Inc. will be able to compete successfully against current or future
competitors or that competitive pressures faced by Ecomm Group Inc. will
not materially adversely affect the Company's business, financial
condition and operating results. In addition, in response to competitive
pressures, Ecomm Group Inc. may make certain pricing, content and/or
marketing decisions o r enter into acquisitions or new ventures that
could have a material adverse effect on the Company's business, financial
condition and operating results.
<PAGE>
EXHIBIT B
---------
AGREEMENT
This is an Agreement made this 27th day of January, 1999, by and
between Commerce Group Corp. ("Commerce"), a Delaware corporation with
its principal place of business at 6001 North 91st Street, Milwaukee,
Wisconsin, 53225, and The Interactive Business Channel ("The IBC"), a
Delaware corporation, with its principal place of business located at
19000 MacArthur Boulevard, #500, Irvine, California, 92612.
WHEREAS, The IBC has expertise in the development of websites and is
interested in jointly developing with Commerce a website having
specialized information in mining activities; and
WHEREAS, The IBC is an investor relations, direct marketing,
publishing and public relations firm with expertise in the dissemination
of information about private and publicly-traded companies; and is in the
business of providing investor relations services, public relations
services, publishing, advertising services, fulfillment services,
marketing of business formats and opportunities, financing arrangements,
private placements and other related programs, services and products; and
WHEREAS, Commerce desires to publicize itself with the intention of
making its name and business better known to its stockholders, investors,
brokerage houses, potential investors or shareholders, and various media
for the purpose of enhancing its common share value to meet the NASDAQ
Small-Cap bid price of more than $1.00; and
WHEREAS, Commerce requires investor relations/public relations
services and desires to employ and/or retain The IBC to provide such
services as an independent contractor, and The IBC is agreeable to such a
relationship and/or arrangement, and the parties desire a written
document formalizing and defining their relationship and evidencing the
terms of their agreement; and
<PAGE>
WHEREAS, Commerce presently has a wholly-owned subsidiary,
Piccadilly Advertising Agency, Inc., ("Piccadilly") a Wisconsin
corporation, which was incorporated for the purpose of undertaking
advertising activities, and, Commerce is willing to engage with The IBC
in the joint development of Piccadilly as an internet company; and
WHEREAS, The IBC is aware that Commerce presently is listed on the
Boston Stock Exchange, Inc. (BSE) and its trade symbols are "CMG" or
"CMG.BN" and on the National Association of Security Dealers Automated
Quotation Systems (NASDAQ) under the Small-Cap Issues with the trade
symbol of "CGCOC"; and
WHEREAS, The IBC is willing and able to provide Commerce with
financial public relations and other consulting services as part of this
Agreement;
NOW THEREFORE, the parties agree as follows:
1. Development of Website. Commerce Group will issue to The IBC
non-dilutible common shares representing 49% of the stock issued and
outstanding in its subsidiary, Piccadilly Advertising Agency, Inc., a
Wisconsin corporation. The parties agree that they will take appropriate
steps to change the name of Piccadilly to "Ecommgroup.com Inc." (if
available). The IBC will use its best efforts and expertise to use
Piccadilly as a vehicle for creating and operating an internet website
with special emphasis on mining activities.
2. Public Relations and Consultant Services. The IBC agrees to
provide Commerce with public relations and other related services
primarily directed at providing information regarding Commerce on the
Internet. Any and all press releases or other information used by The
IBC in this respect must be pre-approved in writing by Commerce. The IBC
is aware that Commerce is required to notify the U.S. Securities and
Exchange Commission, the BSE, and NASDAQ of news announcements prior to
their release to the public. In connection with the foregoing, the
parties further agree:
<PAGE>
A. The IBC, in providing the foregoing services, shall be
responsible for all of its costs of providing the services,
including, but not limited to, out-of-pocket expenses for
postage, delivery service (e.g. Federal Express), telephone
charges, and compensation to third party vendors.
B. The IBC shall NOT release any non-public information or data
about Commerce without the written consent and approval of
Commerce.
C. The IBC will NOT release any non-public information or data
about Commerce to any selected or limited persons(s), entity, or
group if The IBC is aware that such information or data has not
been generally released or promulgated by Commerce.
3. The IBC Marketing Campaign. In addition to the above, The IBC
agrees to perform the following program which is known as "The IBC
Marketing Campaign" and is described below, at no cost to Commerce or to
its subsidiary, Piccadilly:
A. Featured Public Company Website - The IBC will develop, host,
and maintain an IBC Feature Public Company Website at
http://www.ibchannel.com which includes:
(1) The IBC will Hyperlink to Commerce's website, company stock
quote, and chart.
(2) Commerce's summary, press releases, financials, and contact
information.
(3) Investor package e-mail request form.
B. Featured Public Company Administration
(1) The IBC will update website as needed.
(2) The IBC will forward e-mail leads to Commerce.
(3) The IBC will develop and maintain lead database.
C. Featured Public Company Marketing
(1) Commerce will be featured bi-monthly in The IBC Newsletter
http://www.ibchannel.com/stockline.shtml.
(2) The IBC will link Company Discussion Group to
http://www.thestocktalk.com.
<PAGE>
4. Information. The IBC agrees that it will keep Commerce
informed of its activities and the results thereof on a weekly or more
frequent basis.
5. Minimum Compensation. As compensation for its public
relations and other consulting services, Commerce will convey to The IBC
a minimum of 10,000 shares of its common stock, ($0.10 par value) if and
when it is determined that The IBC has not earned the warrants for
Commerce common shares provided for in Paragraph 5 in this Agreement.
6. Warrants. The parties recognize that NASDAQ has notified
Commerce that unless its stock trades above $1.00 bid per share for ten
consecutive trading days prior to February 10, 1999, it will be delisted
from the exchange. If Commerce's stock trades above $1.00 bid per share
for ten consecutive trading days prior to this deadline, Commerce will
issue to The IBC warrants to purchase additional common shares from
Commerce Group Corp. as compensation for its achievement. Specifically,
if the conditions imposed by NASDAQ are met, Commerce will issue to The
IBC warrants to purchase 500,000 shares of its ten cent ($0.10) par
value common stock at a price of ten cents ($0.10) per share. In
connection with these warrants, the parties further agree as follows:
A. If the warrant is exercised, Commerce will issue shares from
those shares it has reserved under its existing Form S-8
Registration Statement No. 333-59209. Although the parties in
good faith believe that these shares can be issued for services
provided under this agreement, Commerce can make no warranty or
assurance that this is the case. It will be The IBC's
obligation to seek whatever legal counsel it deems necessary to
satisfy itself that shares issued pursuant to the warrants will
be free tradable stock.
B. Commerce represents that Edward L. Machulak, Edward A. Machulak,
and John E. Machulak will not in any way without notice dispose,
sell, hypothecate or transfer directly or beneficially owned
shares of Commerce stock at any time before February 10, 1999.
<PAGE>
C. The aggregate purchase price for the warrants is $50,000 paid in
cash; bank wire transfer; certified or cashier checks. Said
warrant may be exercised in full or in part at The IBC's
discretion except Commerce will be liable to pay for one
transfer fee. All other transfer fees presently at $15.00 per
certificate will be paid by The IBC to Commerce's transfer
agent, Nevada Agency and Trust Company.
D. Commerce promises and agrees to convey good, clear and
marketable title to all the shares to be sold hereunder, the
same to be free and clear of all liens and encumbrances. Full
possession of said shares will be delivered.
7. All of the terms, representations and warranties shall survive
the closing. This agreement shall binding upon and inure to the benefit
of Commerce and The IBC and their respective heirs, executors, successors
and assigns.
8. If this Agreement contains any term or provision which shall be
invalid or against public policy or if the application of same is invalid
or against public policy, then, the remainder of this agreement shall not
be affected thereby and shall remain full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed in triplicate on the day and year first above written.
COMMERCE GROUP CORP. INTERACTIVE BUSINESS CHANNEL, INC.
/s/ Edward L. Machulak
_____________________________ /s/ Matthew Marcus
Edward L. Machulak, President By: _________________________________
Matthew Marcus
<PAGE>
EXHIBIT C
---------
COMMERCE GROUP CORP.
6001 North 91st Street
Milwaukee, Wisconsin 53225
Tel: (414) 462-5310 Fax: (414) 462-5312
E-Mail: [email protected]
Website: www.execpc.com/~comgroup/
January 28, 1999
_________________________________________________________________________
News Release
Commerce Group Corp. Subsidiary Plans New Web Portal To Model Go2Net
Strategy And Invites Web Sites To Participate In Acquisition Program
Milwaukee, WI - Commerce Group Corp.'s (Nasdaq: CGCOC) and (Boston
Exchange: CMG) announced today that its subsidiary, Ecomm Group Inc., is
currently planning to consolidate niche web sites into a new web portal.
Ecomm believes that a significant opportunity exists to develop and
consolidate certain fragmented niches of the Internet community into a
web portal. An Internet portal is a hub or gateway to the Internet, such
as Excite (NASDAQ: XCIT), Lycos (NASDAQ: LCOS), Go2Net (NASDAQ: GNET),
and Infoseek (NASDAQ: SEEK), that provides many services and feature for
its visitors. Because the Internet is growing so rapidly, specialized or
niche portals are being developed as the hubs or gateways to the Internet
for groups of individuals with specific interests. For example, iVillage
and Women.com are Internet portals for women, c|Net (NASDAQ: CNET) and
ZDNet (NYSE: ZD) are Internet portals for computers and technology, and
MecklerMedia's (NASDAQ: MECK) Internet.com is a portal to the Internet
for Internet technology and business.
Ecomm's new web portal will provide a full range of the web's most
popular services. These services include free web-based e-mail similar
to HotMail (NASDAQ: MSFT), free web page communities similar to GeoCities
(NASDAQ: GCTY), chat communities similar to TalkCity, auctions similar to
e-Bay (NASDAQ: EBAY) and uBid (NASDAQ: UBID), targeted advertising
similar to DoubleClick (NASDAQ:DCLK) and Flycast, instant messaging
similar to America Online (NYSE: AOL), a personalized start page similar
to Netscape (NASDAQ: NSCP) , product suggestion similar to Amazon.com
(NASDAQ:AMZN), a topical Internet Directory similar to Yahoo (NASDAQ:
YHOO), and e-commerce similar to OnSale (NASDAQ:ONSL) and Digital River
(NASDAQ: DRIV).
Ecomm seeks to acquire niche Internet web site's which provide:
* An Interactive online environment in which content is updated
frequently and visitors are active participants, interacting with both
users and one another;
* Content that captures and retains visitors interest by entertaining,
providing varying perspectives and encouraging users to participate or
take action on the information provided;
<PAGE>
* Ease of use of the Internet site through its design, communication and
navigation features and tools; and advertising and sponsorship
opportunities through an approach combining brand integration,
animated advertising, product promotion and content area sponsorship.
Ecomm invites internet companies to participate in its acquisition
program by calling (414) 462-5310.
Statements in this release are made pursuant to the "Safe Harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risk
and uncertainties, including without limitation, continued acceptance of
the company's services, increased levels of competition for the company,
and dependence on the performance of the management of the company.
<PAGE>
EXHIBIT D
---------
COMMERCE GROUP CORP.
6001 North 91st Street
Milwaukee, Wisconsin 53225
Tel: (414) 462-5310 Fax: (414) 462-5312
E-Mail: [email protected]
Website: www.execpc.com/~comgroup/
To Be Released on February 1, 1999
- -------------------------------------------------------------------------
Commerce Group Corp. Provides Information To Nasdaq
And Continues To Trade On The Boston Stock Exchange Under The Symbol CMG
Milwaukee, WI - February 1, 1999 - Commerce Group Corp. (Nasdaq: CGCOC)
and (Boston Stock Exchange: CMG), announced today that the company is
providing information concerning its planned Web portal requested by
Nasdaq in order to resume trading.
The following items were requested by Nasdaq:
1. Please provide a chronology and discussion of events leading to the
company's decision to develop a Web portal. Describe in detail the
status of the company's Web portal plans. Including the timing of when
the Web portal is anticipated to become operational. Provide a copy of
the draft business plan pertaining to the establishment of the Web
portal.
2. Explain how the company will fund the development of the Web portal.
3. Describe how the company will set up the Web portal. Include a
discussion of the equipment, facilities and technology which the
company has developed or plans to acquire in order to implement the
Web portal. Provide a list of the personnel who will develop and
market the Web portal.
4. Describe specifically what information, links or services the Web
portal will provide and to whom the company expects to offer the
Portal. Estimate the size of the company's expected customer base.
5. Discuss the current status of any agreements or discussions with other
companies or advertisers with respect to the Web Portal. Provide
copies of any agreements related to the Web portal.
6. Explain the company's plan for establishing revenue from Web portal.
Include in your discussion the customer which the company anticipates
the Web portal will serve.
There has been no additional information requested by the Boston Stock
Exchange and Commerce Group continues to trade on the BSE under the
symbol CMG.
Statements in this release are made pursuant to the "Safe Harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risk
and uncertainties, including without limitation, continued acceptance of
the company's services, increased levels of competition for the company,
and dependence on the performance of the management of the company.
<PAGE>
EXHIBIT E
COMMERCE GROUP CORP.
6001 North 91st Street
Milwaukee, Wisconsin 53225
Tel: (414) 462-5310 Fax: (414) 462-5312
E-Mail: [email protected]
Website: www.execpc.com/~comgroup/
For Immediate Release - February 1, 1999
- -------------------------------------------------------------------------
News Release
The Boston Stock Exchange Halts Trading of Commerce Group Corp.'s Shares
After Its Subsidiary Announces Plans To Develop a New Web Portal
Response Submitted to Nasdaq & BSE Request Today
Milwaukee, WI - February 1, 1999-- The Boston Stock Exchange announced
Monday morning that the trading of Commerce Group Corp.'s (Nasdaq:
CGCOC) and (Boston Exchange: CMG) common shares has been halted pending
the review of the information submitted to it today.
Nasdaq and Boston confirmed that it has received from Commerce Group the
responses to the information. Nasdaq has halted the trading of Commerce
Group's shares until it is fully satisfied with the contents of the
information submitted.
On January 29, 1999, Commerce Group announced plans to launch a new Web
portal to model Go2Net's strategy and invited Web sites to participate in
its acquisition program. The company's subsidiary, Ecomm Group Inc., is
currently planning to consolidate niche Web sites into a new Web portal.
Ecomm believes that a significant opportunity exists to develop and
consolidate certain fragmented niches of the Internet community into a
Web portal. An Internet portal is a hub or gateway to the Internet, such
as Excite (Nasdaq:XCIT), Lycos (Nasdaq:LCOS), Go2Net (Nasdaq:GNET), and
Infoseek (Nasdaq:SEEK), that provides many services and features for its
visitors.
Because the Internet is growing so rapidly, specialized or niche portals
are being developed as the hubs or gateways to the Internet for groups of
individuals with specific interests. For example, iVillage and Women.com
are Internet portals for women, c/Net (Nasdaq:CNET) and ZDNet
(NYSE:ZD) are Internet portals for computers and technology, and
MecklerMedia's (Nasdaq:MECK) Internet.com is a portal to the
Internet for Internet technology and business.
Ecomm's new Web portal will provide a full range of the Web's most
popular services. These services include free Web-based e-mail similar to
HotMail (Nasdaq:MSFT), free Web page communities similar to GeoCities
(Nasdaq:GCTY), chat communities similar to TalkCity, auctions similar to
e-Bay (Nasdaq:EBAY) and uBid (Nasdaq:UBID), targeted advertising similar
to DoubleClick (Nasdaq:DCLK) and Flycast, instant messaging similar to
America Online (NYSE:AOL), a personalized start page similar to Netscape
(Nasdaq:NSCP), product suggestion similar to Amazon.com (Nasdaq:AMZN), a
topical Internet Directory similar to Yahoo (Nasdaq:YHOO), and e-commerce
similar to OnSale (Nasdaq:ONSL) and Digital River (Nasdaq:DRIV).
Ecomm seeks to acquire niche Internet Web sites which provide:
* An Interactive online environment in which content is updated
frequently and visitors are active participants, interacting with both
users and one another;
* Content that captures and retains visitors' interest by entertaining,
providing varying perspectives and encouraging users to participate or
take action on the information provided;
* Ease of use of the Internet site through its design, communication and
navigation features and tools; and advertising and sponsorship
opportunities through an approach combining brand integration,
animated advertising, product promotion and content area sponsorship.
Ecomm invites Internet companies to participate in its acquisition
program by calling Matthew Marcus at 949/442-8919 or via e-mail at
[email protected].
Statements in this release are made pursuant to the "Safe Harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risk
and uncertainties, including without limitation, continued acceptance of
the company's services, increased levels of competition for the company,
and dependence on the performance of the management of the company.
Contact: Commerce Group Corp.
Investor Relations
6001 North 91st Street
Milwaukee, Wisconsin 53225-1795
Tel: (414) 462-5310
Fax: (414) 462-5312
