ONElist And EGroups Announce Merger – November 9, 1999

ONELIST AND EGROUPS ANNOUNCE MERGER
Top two players combine to create world’s largest Internet group communications company

November 9, 1999, San Francisco, Calif. – ONElist (www.onelist.com) and eGroups, Inc. (www.eGroups.com), the two largest companies in the Internet group communications space, jointly announced a definitive merger agreement today. Upon closing of the transaction by the end of this month, the new company, eGroups, Inc., will establish a wide lead in one of the Internet’s fastest growing categories with over ten times the traffic of its closest competitor. The combined company will serve more than 13 million customers, comprised of 260,000 active email groups, delivering over 1.3 billion email messages per month.

“Our mission is to revolutionize the way groups of people communicate using the Internet,” said Michael Klein, new CEO for the combined companies. “Merging the two biggest players gives us undisputed leadership in the email community and group communications category.”

Virtually anyone with email access can use eGroups – anytime, anywhere. With email as the core of its service, eGroups offers a range of Web-based applications to enable group leaders to easily manage complex group interactions and provides individuals with freedom to exchange thoughts, information and ideas with others that share common interests.

Growth of Group Communications

In spite of exponential viral growth effects in this emerging category, the Internet group communications space has been flying below the radar screen for some time.

Traditional measures of Internet reach-web page views-are inadequate to describe eGroups’ massive monthly customer contact. Since the new company’s core focus is email list hosting, only seven percent of its customer contact is captured through web-based impressions. The vast majority of group interactions occur using email. By comparison, the amount of email messages eGroups serves is equal to about two thirds of the email generated by America Online users. Media Metrix figures, while they tell only fraction of the story, are nonetheless significant for both companies. In September, Media Metrix ranked ONElist and eGroups as the 24th and 37th largest Web service companies, respectively. During their infancy, both pre-merger companies independently attracted customers faster than HotMail or GeoCities. In less than a year, eGroups has established a larger user base than either eBay or Amazon.

Word-of-mouth among membership and explosive viral growth have fueled the majority of growth for both ONElist and eGroups. “Group email is truly the killer application of the Internet,” remarked Peter Mills, a ONElist lead investor from CMGI@Ventures (NASDAQ: CMGI).

Forrester Research expects 50% of the U.S. population, or 135 million people, will communicate using email by 2001. In fact, analysts predict that more than one billion people will send nearly seven billion messages per day by 2002. With this merger announcement, the Internet group communications space is now ready to emerge and register on the radar screen along with other fast-growing Internet segments, such as online auctions, search tools, and e-commerce.

Mike Moritz, a lead eGroups investor from Sequoia Capital, emphasized the importance of being number one: “With 13 million members, eGroups has instantly become the undisputed leader in an emerging category. The category leader is typically worth more than the value of all other competitors combined.”

“Bringing together the two category leaders will dramatically change the competitive landscape. This merger marks an unprecedented shift in the emerging group communications arena,” said Jan Buettner, a ONElist board member from Bertelsmann Ventures. “eGroups now has widened the gap in one of the fastest growing segments of the Internet.”

eGroups Management Team

The new company’s management team will be comprised of executives from both ONElist and eGroups. “This partnership brings together some of the sharpest minds in the industry. With this combination of talent and resources from the two companies, eGroups is positioned for incredible growth in the years to come,” added Klein.

In the new company, the management team consists of the following: Michael Klein, recently hired as ONElist’s chief executive officer, will be the new CEO for eGroups; Marjorie Sennett will be senior vice president and chief financial officer; Rikk Carey, will be vice president and CTO; Steven Comfort will be vice president of sales; Jacqueline Maartense will be vice president of marketing; Jeff Winner will be vice president of engineering; Aki Oyama will lead international efforts in Japan; Marcus Riecke will be general manager of Europe; Jade Dauser will be vice president of corporate services; Jill Howes will be vice president of human resources; and Carolyn Patterson, will be vice president of operations.

Klein further noted, “With this team on board, I’m confident that we can execute a smooth and timely integration. Our plan is to continue managing separate operations and web sites for the immediate future. We will strategically integrate our businesses during the next few months so that we can assure a seamless transition for our customers.”

eGroups and ONElist Background

eGroups, Inc., formerly ONElist, Inc. and eGroups, Inc., is revolutionizing the way groups of people communicate, using email list hosting at the core of its service. The combined company serves more than 13 million members and hosts more than 260,000 active community groups that exchange more than 1.3 billion emails per month. The new company offers a range of integrated communications tools including free email communities, photo storage, file sharing, event coordination, group surveys, and chat.

Both launched in 1998, eGroups and ONElist are privately held companies based in San Francisco and Redwood City, respectively, with backing from premier venture capital investors. ONElist received venture funding from CMGI@Ventures (Nasdaq: CMGI) and Bertelsmann Ventures. eGroups, Inc. was financed by Sequoia Capital and Atlas Venture.

ONElist was founded by Mark Fletcher and Scott Shambarger. eGroups was founded by Scott Hassan, Martin Roscheisen, and Carl Page. For more information, please visit http://www.ONElist.com and http://www.eGroups.com.

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