[JA] Re: Juno and NetZero Complete the Merger
- From: George H Lunt <glunt@xxxxxxxx>
- To: juno_accmail@xxxxxxxxxxxxx
- Date: Wed, 26 Sep 2001 08:39:04 -0700
Hi All,
NetZero filed its final Annual Report yesterday with the SEC, which also
turns out to be its first "Transition" report for the combined United
Online (Juno + NetZero) company. I thought you might be interested in a
couple tidbits from that report. The first, details the amount of money
these two companies have lost since their inception... a combined total
of just over $600 million dollars down the drain! That's a sobering
figure. The stock of the combined company opened at $1.97 a share and in
the first two hours of trading this morning has dropped more than 20
cents...
>Both NetZero and Juno have a history of losses and there is no
>assurance that we will ever become profitable. NetZero has
>incurred net losses of approximately $312.4 million from its
>inception in July 1997 through June 30, 2001, including a net
>loss of approximately $42.1 million in the three months ended
>June 30, 2001. Juno has incurred net losses of approximately
>$291.6 million from its inception in June 1995 through June 30,
>2001, including a net loss of approximately $2.6 million in the
>three months ended June 30, 2001.
One of the more interesting aspects of the "merger" (purchase of Juno by
NetZero) is the timing. After all this time and effort and huge, huge
losses Juno is on the verge of becoming profitable. Juno's founder and
financier, D.E. Shaw, was, still Juno's primary stockholder. If he
didn't want to sell the company, NetZero couldn't have bought it. What
"handwriting on the wall" did he see before making his decision? Did he
sell because he figured the company was doomed... just "cutting his
losses"? And that was before the merger with NetZero... and if you
think things are going to get better for Juno because of this merger,
well, boy do I ever have some swampland...
>Opportunity to Enhance Billable Subscriber Base. Juno has
>been marketing billable services to its free subscriber base
>since 1998. Repeated exposure to such marketing messages
>over time may reduce their effectiveness. NetZero's subscriber
>base of almost 4 million active users in March 2001 represents
>a largely untapped and potentially valuable pool of subscribers
>to whom Juno's billable services can be marketed.
NetZero's been selling their subscribers their own brand of Premium
services since around the first of the year... and many also have Juno
accounts too... but somehow these folks are "... a largely untapped and
potentially valuable pool of subscribers to whom Juno's billable services
can be marketed."... now about that swampland...
George Lunt ..... so. cal.
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