A Busy Week for the Online Radio Biz

Last week saw a flurry of announcements in the online audio and video streaming business, capped off by Yahoo!'s acquisition of Broadcast.com. Yahoo! says it has signed a definitive agreement with Broadcast.com whereby Yahoo! will issue 0.7722 of a share of Yahoo! common stock for each share of Broadcast.com common stock. In addition, all outstanding options of Broadcast.com will be converted into Yahoo! options. The acquisition is expected to be completed in the third quarter of 1999 and is valued at around $5.7 billion, including $4.8 billion in Broadcast.com common stock and $900 million in stock options.

Tim Koogle, chairman and CEO of Yahoo!, stated that "Broadcast.com's tremendous first-to-market advantage has made it the leading destination on the Web for audio and video broadcasts, and it will provide significant added value to Yahoo!'s audiences worldwide. The acquisition of Broadcast.com is a natural extension of our strategy to deliver the ultimate experience to Web users and a powerful advertising and distribution platform for both companies' content, advertising, and business services providers." Upon completion of the acquisition, Yahoo! claims its advertisers and merchants will have expanded options to promote their businesses through the company's Fusion Marketing Online.

"Broadcast.com has built a scalable digital distribution network designed to deliver streaming audio and video to mass audiences, through any delivery mechanism or access device," said Mark Cuban, chairman and president of Broadcast.com. Todd Wagner, CEO of Broadcast.com, added, "This acquisition expands Broadcast.com's mission to be the Web's leading broadcast-services company in the world. Combining our Internet broadcasting expertise with Yahoo!'s position as one of the Web's leading global branded networks will enable us to extend our multimedia business services to an even larger customer and audience base."

Just as Yahoo!'s deal was being made public, Onradio.com, which describes itself as "the largest network of radio-station websites on the Internet," announced that Steve Carley, the former president of Universal City Hollywood, had joined the company as its chief operating officer. Onradio.com CEO Ricardo Ramirez said that "Steve's extraordinary management experience in internationally branded entertainment and consumer companies will accelerate Onradio.com's growth as the leading Internet commerce platform for radio stations."

Onradio.com, formally known as Electric Village, says it provides a "complete, scalable, turnkey Internet solution to the radio industry." The company says that more than 575 radio stations currently belong to the OnRadio.com network, which supports stations from several broadcast groups, including ABC, CBS/Infinity, Chancellor, Clear Channel, Heftel, and Jacor.

And finally, last week also saw Redwood Broadcasting announce that it has reached an agreement to acquire a controlling interest in Interactive Radio Group, a privately held company engaged in the business of designing and hosting Internet websites for radio stations.

IRG says it will "aggressively seek the participation of top-rated radio stations in each of five (Modern Rock, Classic Rock, Oldies, Adult Contemporary, and News/Talk) programming formats in each of the 30 largest US radio markets." The company's goal is to build a "superior Internet network of top-rated radio-station websites." IRG hopes to launch its flagship website in early April with the opening of KROQ.com in Los Angeles, followed shortly by KITS.com in San Francisco. Some of the features of each radio-station website are expected to include: 2D/3D interactive capability, streaming audio and video, local and national chat, interactive games, music sampling, market research capability, and E-commerce.