Yahoo! to Acquire Yoyodyne

Yahoo!Inc. Monday acquired Internet direct marketers Yoyodyne Entertainment, Inc. in a stock deal worth $29 million.

Irvington, N.Y.-based Yoyodyne markets a variety of services to consumers who agree to receive the information in return for the chance to win cash and prizes.

The companies plan to integrate Yoyodyne’s consumer database and direct-permission marketing with Yahoo!’s sales and service organization. Yoyodyne’s direct marketing services will be incorporated as a segment of Yahoo!’s suite of advertising and merchant services, including banner advertising, sponsorships, promotions, merchandising, placement and distribution, direct marketing and member acquisitions, and hosting and transactions.

Yoyodyne, started in 1995 by Seth Godin, features four branded programs, including EZSpree.com, an online aggregator of name-brand online shopping sites; GetRichClick.com, a traffic distribution site producing targeted, unduplicated visitors to sponsoring sites; EZVenture.com, a promotion aimed at entrepreneurs and small businesses; and EZWheels.com, a site geared toward car buyers linking them to car manufacturers.

Yoyodyne clients include America Online, American Express, H&R Block, Microsoft, Netscape, Procter & Gamble, Sony Music, Sprint, and Volvo.

Yahoo! will issue 280,664 shares of Yahoo! common stock for all outstanding Yoyodyne shares, options and warrants. Yahoo! expects to record a one-time charge of approximately $2 million in the fiscal fourth quarter of 1998. The acquisition is expected to be completed in the fourth quarter.

“Yoyodyne provides several key elements Yahoo! seeks in extending its business, including the most talented team in the industry; a proven business model, client and user base and a solid track record,” said Tim Koogle, chief executive officer, Yahoo! Inc. “This acquisition further enhances Yahoo!’s leading position of providing marketers with the world’s best interactive platform for reaching highly targeted audiences, along with the richest online user experience based on their stated preferences.”