INDIVIDUAL, INC. AGREES TO ACQUIRE CLARINET COMMUNICATIONS
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FOR FURTHER INFORMATION:
INVESTORS
At Individual:
Bob Lentz, CFO, 617-313-5259, blentz@individual.com
At The Financial Relations Board:
Julie Creed, 312-640-6724, jmc@chi.frbd.com
MEDIA:
At The Financial Relations Board (financial):
Jerry Miller, 212-661-8030, jnm@ny.frbd.com
At Mullen PR (trade/business):
Erika Schutz, 508-468-1155 or eschutz@mullen.com
For Immediate Release
Monday, June 16, 1997
INDIVIDUAL, INC. AGREES TO ACQUIRE CLARINET COMMUNICATIONS, FORTIFIES
LEADERSHIP IN INTERNET NEWS
Internet's largest business news service combines with Internet's largest paid
circulation base
Combined company will have 2 million paid, registered, or licensed users
Combination sets stage for enhanced revenue and bottom-line performance in
1998 and beyond
BURLINGTON, MASSACHUSETTS, JUNE 16, 1997 - Individual, Inc. (Nasdaq:INDV), the
leader in personalized news solutions for business, today announced that it
has entered into a definitive agreement to acquire privately-held ClariNet
Communications Corporation, publisher of ClariNews, the premier globally
branded electronic newspaper, via the exchange of approximately 1.5 million
Individual shares for all of ClariNet's stock. The transaction, which will be
accounted for as a pooling of interests, is expected to be effective within
the next week. The combined company will deliver news to more than 2 million
paid, registered or licensed readers.
ClariNet, one of the earliest and most sustained Internet business
successes, was founded in 1989, has annual revenue of approximately $3.9
million and has shown a positive cash flow in each of the last five years.
Employee-owned and funded predominantly from internal cash flow, ClariNet
readership has grown rapidly in the past five years, reaching 1.5 million
licensed readers by early 1997. These readers subscribe to ClariNet's
services through more than 350 Internet Service Providers, corporations and
educational institutions worldwide.
The acquisition of ClariNet is the second acquisition by Individual in as
many weeks. On June 6th, Individual acquired the CompanyLink research product
from Delphi Internet Services.
INDIVIDUAL'S NEWSPAGE TO BE UPGRADED TODAY
ClariNet will continue to operate from its headquarters in San Jose,
California, where Individual's West Coast development team also is located.
Brad Templeton, ClariNet's founder/publisher, and Roy Folk, ClariNet's
president and chief operating officer, will become officers of Individual in
addition to their operating roles at ClariNet. Templeton also will be one of
Individual's largest shareholders, with approximately 7 percent of the
outstanding shares. All 40 of ClariNet's staff will become Individual
employees.
"ClariNet's products, distribution channels, technology, and approach to
news filtering and customization are directly complementary to those of
Individual," commented Michael E. Kolowich, chairman, president and chief
executive officer of Individual. Noting that ClariNet's breaking
news/intra-day alerts are being incorporated into a major upgrade of
Individual NewsPage today, Kolowich said, "There will be an immediate positive
impact on Individual's product offerings and customer experience, which we
believe will benefit revenue growth."
ClariNet Chief Executive Officer Brad Templeton noted, "Our
internally-funded growth strategy took us a long way, but it also was
beginning to limit our ability to capture the full potential of the Internet
and Intranet news markets as the 'net exploded in popularity. Individual has
the resources, the distribution channels, and the vision to capitalize on what
ClariNet has started. I'm very excited about the prospects of the combined
company, and am fully committed to the success of Individual."
ENHANCED PERFORMANCE OPPORTUNITIES FOR INDIVIDUAL
Kolowich noted the close fit of this acquisition with Individual's
strategic direction. "Individual's core mission is to provide daily, deep,
personalized news solutions to knowledge workers and their companies, and
we've dedicated considerable effort to building distribution channels and
developing a potentially profitable business model," Kolowich said. "The
acquisition of ClariNet goes well beyond the addition of readers or revenue;
instead, this combination supports every facet of our core mission and takes
Individual to a new level in its evolution."
"First, ClariNet brings us new customers, new channels, and new sources
of revenue," said Kolowich. "But it also helps us improve Individual's
products and our users' experiences so that we can increase our direct and
indirect revenue from Individual NewsPage. It helps us be an even stronger
force in business-to-business advertising. And it helps us incorporate new
Internet technology into our business. The result should be enhanced revenue
and bottom-line performance in 1998 and beyond."
With 2 million paid, registered or licensed users, the combined company
will be among the leaders in the Internet news market. ClariNet's flagship
news product, ClariNews, will continue to be distributed globally through
Internet Service Providers, which include NETCOM, Earthlink, The World,
Internet America and Mindspring, as well as ISPs in Canada, Mexico, Japan,
Australia, Argentina, and other nations on six continents. ClariNews will
also continue to be distributed to corporate customers such as AT&T, Mobil
Oil, Monsanto, Schlumberger, and Silicon Graphics, as well as educational
institutions such as Harvard, Stanford, UCLA, MIT, and Yale.
"Many of ClariNet's customers will be able to benefit from the additional
news sources and personalization that Individual NewsPage and our other
products can offer," said Kolowich. "As our companies come together, we'll be
exploring ways to offer additional service tiers to these customers."
PRODUCT ENHANCEMENTS SHOULD INCREASE DEPTH, FREQUENCY OF USAGE
Individual's award-winning personalized news service on the Internet,
Individual NewsPage, will incorporate ClariNet's breaking news in a major
upgrade to be released today. Also included in the upgrade will be profiles
and research files on 65,000 companies through Individual's CompanyLink
product, which it acquired last week.
"Deep, frequent usage is the key to the financial success of Individual
NewsPage," observed Kolowich. "The addition of ClariNet's breaking news and
CompanyLink's company research to NewsPage is designed to make it an
indispensable daily tool for business professionals. That should lead to
higher usage and, therefore, direct and indirect revenue per registered
NewsPage user."
ADVERTISING REVENUE MODEL TO BENEFIT FROM LARGER, TARGETED READER BASE
The acquisitions of both ClariNet and CompanyLink are designed to
increase the capability of Individual NewsPage to generate advertising
revenue. The upgrade to Individual NewsPage incorporates advertising into
both new sections: breaking news and company research. "Our advertising sales
continue to grow even more effective," said Kolowich. "New additions to our
available advertising space can translate to an increase in advertising
revenue."
The company will explore ways to add advertising to ClariNet's products.
Advertising revenue now accounts for less than five percent of ClariNet's
revenue, which is dominated by subscription fees. "Plans for adding
advertising to some of our products are in process already," said ClariNet's
Templeton. "Individual's very capable advertising sales organization can help
us accelerate that effort."
ACQUISITION AUGMENTS INDIVIDUAL'S NEWS FILTERING CAPABILITY
The acquisition of ClariNet augments Individual's process of filtering
the news to create personalized daily news briefings for business
professionals. ClariNet has published breaking news on the Internet 7 days a
week, 365 days a year since 1989. The Four Star Edition of ClariNews includes
over 2,000 stories and news photos a day, grouped into more than 500
categories. It is the most comprehensive, up-to-the-minute news source on the
net, updating stories every 15 minutes around the clock.
ClariNet uses major sources like Reuters, UPI, AFP, ESPN's SportsTicker,
Commerce Business Daily, NewsBytes, the New York Times Syndicate, Christian
Science Monitor, Entertainment News Services, United Media, Universal Press
Syndicate, and on-line material from smaller sources. ClariNet's editorial
staff is assisted by a proprietary ClariNet fuzzy logic system to help group
and cross-reference stories in a way that Internet search engines or totally
automated systems could never do alone.
"We're very impressed with ClariNet's method of filtering and organizing
many sources of news into categories and topics that make these multiple
sources much more useful and personalizable," said Individual's Kolowich.
"ClariNet's use of human editors, assisted by great technology, is very
compatible with our approach. The way they have accomplished this on an
around-the-clock basis is instructive to us as we evolve Individual's news
refinery architecture."
INTERNET VETERANS ENHANCE INDIVIDUAL MANAGEMENT TEAM
The acquisition of ClariNet adds two seasoned veterans to Individual's
management team. Brad Templeton, the founder, publisher and chief executive
officer of ClariNet, is one of the pioneers of the Internet, as well as one of
its most knowledgeable and articulate evangelists. In addition to his role at
ClariNet, Templeton is a successful author of a dozen commercial software
programs, editor of several books on Internet humor, and creator/moderator of
one of the most popular newsgroups (public discussion areas) on the Internet,
rec.humor.funny. He will continue as publisher of ClariNet's services and
will play an active role in Individual's Internet strategic planning.
Roy Folk, president and chief operating officer of ClariNet, has
executive-level experience at both large and start-up technology companies.
He was Ashton-Tate's executive vice president and general manager from 1985 to
1988, when the company grew by 40% annually to nearly $320 million in sales.
Before ClariNet, Folk was president and chief executive officer of Hunter
Systems and Paladin Software, and he was also product manager for VisiCalc,
the first electronic spreadsheet. He will continue as president of
Individual's ClariNet division.
ABOUT INDIVIDUAL
Individual, Inc. is a pioneer and leading innovator of electronic
personalized business information services. Through its exclusive information
retrieval, filtering, and delivery technologies, Individual brings highly
relevant, precisely targeted business news, information, and advertising to
more than 2 million paid, registered, or licensed readers worldwide.
Individual's services include: First!, Individual NewsPage
( http://www.newspage.com ), HeadsUp, Hoover and ClariNews. Individual's
business partners include Lotus, Knight-Ridder, Microsoft Corp., NETCOM,
Netscape, and Toshiba.
Individual is headquartered in Burlington, Mass., with offices around the
world. Visit Individual on the Web at http://www.individual.com.
Certain of the above statements, including those relating to the potential
effect of the acquisition of ClariNet on the Company's future revenue and
financial performance, are forward-looking statements that involve risks and
uncertainties. Actual results could differ materially as a result of a
variety of factors, including, risks associated with acquisitions, the timely
development and acceptance of new products, competitive developments, the
success of relationships with third parties, and the other risk factors
described from time to time in the Company's SEC reports.
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