-Ian.

—– http://story.news.yahoo.com/news?tmpl=story&cid04&ncids8&e=6&u=/ washpost/20030724/tc_washpost/a32817_2003jul23 AOL Subscribers Down by 846,000 Thu Jul 24,12:23 AM ET

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By David A. Vise, Washington Post Staff Writer

America Online’s subscriber base plunged by 846,000 in the second quarter, as hundreds of thousands left for cheaper or faster Internet connections and a similar number were dropped because they had been mistakenly counted in the past, AOL Time Warner Inc. disclosed yesterday.

In addition, new disclosures about a federal investigation into improper accounting at Northern Virginia-based America Online Inc. showed that the division’s legal problems are hurting other parts of the AOL Time Warner media empire.

AOL Time Warner said yesterday that the Securities and Exchange Commission ( news -web sites ) would not allow it to spin off a portion of its cable television unit until it resolves a dispute over how to account for hundreds of millions of dollars in questionable revenue from a complex deal with German media firm Bertelsmann AG ( news -web sites ).

AOL Time Warner also said it may restate previously reported profits and sales linked to the Bertelsmann transaction. And the company indicated that it could not determine how long the SEC and Justice Department ( news -web sites ) investigations into its bookkeeping practices will last.

The company said its profit increased to $1.1 billion (23 cents per share) in the second quarter, from $396 million (9 cents) in the second quarter of 2002. Revenue increased about 6 percent, to $10.8 billion. The profit figure included a number of substantial one-time gains from the settlement of a lawsuit with Microsoft Corp. and the sale of various businesses.

Despite solid results in divisions other than America Online, AOL Time Warner shares fell yesterday by $1.14, or 6.8 percent, to $15.71, as analysts and major investors reacted to the continuing uncertainty caused by the SEC investigation, the threat of increasingly costly shareholder lawsuits, the deterioration in America Online’s performance, and disappointment that the strength of AOL Time Warner’s film, publishing and cable television operations did not prompt the company to substantially increase its financial projections.

“Our goal for the remainder of this year is to keep laying the foundation that will enable us to exit 2003 with more momentum than we had when we entered it, with an eye toward achieving, strong sustainable growth next year and beyond,” said Richard D. Parsons, chairman and chief executive of AOL Time Warner.

AOL, the nation’s biggest Internet service provider, has shed a total of 1.2 million subscribers over the past year and now has 25.3 million subscribers in the United States.

The company said the total includes 2.2 million high-speed subscribers, an increase of 300,000 over the past three months. During that period, AOL launched an enhanced high-speed offering and promoted it with an advertising campaign titled, “AOL for Broadband: Welcome to the World Wide Wow.”

In addition to losing dial-up subscribers faster than expected, AOL is predicting that its online advertising revenue will drop about 40 percent in 2003. The decline is occurring even though the total dollars spent on advertising online is growing nationally, a trend that can be seen in the financial results of some of America Online’s competitors, including search engines Yahoo and Google and many specialized Web sites.

AOL Time Warner had sought to persuade SEC investigators that they were mistakenly challenging the accounting for the two-part Bertelsmann deal. But the company said yesterday that the commission has refused to back down.

“The company and its auditors continue to believe the accounting for those transactions is appropriate, but it is possible that the company may learn additional information as a result of its own review, discussions with the SEC and/or the SEC’s ongoing investigation that would lead [AOL Time Warner] to reconsider its views,” the firm disclosed.

The Bertelsmann deal involved AOL’s sale of roughly $400 million in advertising to Bertelsmann in connection with the purchase of Bertelsmann’s stake in AOL Europe.

AOL Time Warner released its second-quarter results prior to the opening of stock trading yesterday morning. Although it cut its projections for America Online, the company beat Wall Street estimates as its cable television, motion picture and publishing businesses thrived.

“Our solid results in this quarter and the first half of the year give us confidence that we can deliver on all of our 2003 financial objectives,” Parsons said. He added that the company is continuing to reduce its hefty debt through the sale of businesses and the spending of billions of dollars of excess cash generated by operations.

The Warner Brothers and New Line Cinema movie units generated $572 million and $239 million, respectively, at the box office in the United States. “The Matrix Reloaded” led the way among new releases, while “Harry Potter ( news -web sites ) and the Chamber of Secrets” boosted DVD and CD sales.

“On balance,” said Deutsche Bank, “we think this report is good news.”

In a conference call with analysts, Parsons said he was no longer counting on the sale of stock in Time Warner Cable to generate cash for debt reduction this year. Instead, he said, the handling of any cable spinoff will be determined by broader issues, including the best way to help that subsidiary grow.

“The specific timetable for executing an IPO will depend on strategic considerations, not balance sheet imperatives, as well as the status of our SEC investigations,” Parsons said.

DULLES, Va. — AOL Time Warner Inc.’s America Online Inc. (NYSE:AOL – News) unit streamlined its management structure in hopes of increasing accountability at the online giant, while setting clearer priorities and clarifying its organization roles.

ADVERTISEMENT The changes, which had been expected, would eliminate the president and chief operating officer posts, while giving recently appointed Chairman and Chief Executive Jon Miller a more direct role in overseeing America Online’s key units.

In addition, the maligned Business Affairs division will be disbanded, with employees reassigned to the business units they support. The group, which arranged long-term sponsorships and marketing partnerships with advertisers, has come under criticism for the way it crafted deals, some of which are under investigation by the government regulators looking at how the booked revenue was recorded.

The company said a month ago that America Online may have improperly recognized $49 million of revenue over six quarters and is combing through its books for any other possible errors.

Mr. Miller has his hands full, with America Online reeling from plunging advertising revenue, slowing subscriber growth and probes into its accounting practices by the Securities and Exchange Commission and the Justice Department.

Mr. Miller, who last month became the third CEO of the Internet unit this year, will take a more direct role in the America Online brand, interactive marketing and broadband units.

“AOL must maintain its leadership position among dial-up subscribers, enhance our broadband business and reinvigorate our relationship with marketers,” he said in a prepared statement. “To do this, we will fully leverage our programming and product expertise, along with the superior technology behind our unmatched member experience, to create exciting, relevant and distinctive new products and content that will change the way both dial-up and high-speed consumers think about AOL.”

As part of the restructuring, current America Online COO J. Michael Kelly will become chairman and CEO of America Online International, will oversee the company’s AOL Anywhere products — which focus on wireless access to America Online — and report to Mr. Miller.

“Mike Kelly’s appointment signals the priority I’ve placed on our international and AOL Anywhere businesses,” Mr. Miller said.

Chief Financial Officer Joseph Ripp will become vice chairman and other corporate and operating functions, including AOL’s network infrastructure and technology operations. Current Vice Chairman Ted Leonsis will head newly created councils overseeing brand, product and technology strategy.

The two will also join Mr. Miller, James de Castro, interactive services president and the person who oversees the America Online Internet service, and Don Logan, chairman of AOL Time Warner’s media and communications group, in a new senior strategy group.

Mr. Ripp, America Online’s CFO since the company’s acquisiton of Time Warner Inc. in early 2001, will keep that role until a replacement is named. Mr. Kelly became America Online’s chief operating officer in November.

Mr. Miller also said that America Online President Ray Oglethorpe recently told the company he would retire after serving as a senior adviser during an undisclosed transition period, and that Vice Chairman and Chief Marketing Officer Jan Brandt will step down from those posts and take on a new part-time role as a senior adviser.

-Maria P. Vallejo; Dow Jones Newswires; 201-938-5400 and Kevin Kingsbury; Dow Jones Newswires; 609-520-4367

———–

Wednesday March 7 7:00 PM ET Yahoo! CEO Tim Koogle To Step Down

By BRIAN BERGSTEIN, AP Business Writer

SAN JOSE, Calif. (AP) – Tim Koogle is stepping aside as chief executive of struggling Internet bellwether Yahoo! Inc., though he will stay on as chairman.

The company also announced Wednesday that its first-quarter operating earnings will come in at “approximately break-even,” well short of Wall Street’s expectations. Full-year results also could miss targets.

Koogle, who will remain CEO until a replacement is found, said he felt Yahoo needed an infusion of new talent.

“I’m looking over the horizon, and saying, when the economy starts to firm and Yahoo has weathered through this, what do we need to have in place so that we’ve got enough bench strength to scale continuously as we grow for the next five to 10 years?” Koogle said in a conference call with financial analysts. “I think it’s a great time to be proactive about that, and bring in and extend our team.”

The news followed a day of intense speculation after trading in shares of Yahoo were halted shortly after the markets opened Wednesday. The company had canceled an appearance at an Internet conference in New York.

Shares dropped fell $1.38 to $21 before trading was halted on the Nasdaq Stock Market. After the news was released, shares fell another $2.31, or 11 percent, to $18.69.

Koogle – known as “TK” around the company – joined Yahoo after serving as president of Seattle-based Intermec Corp. and spending nine years as an executive at Motorola Inc. He became Yahoo chairman in 1999.

“This guy has a lot of background here, been there from very early on, and has done a real good job,” said John Corcoran, an analyst with CIBC World Markets Corp. Finding a replacement will be difficult, like “getting someone to step in front of an avalanche,” Corcoran said, considering the downward momentum of the company’s stock and the Internet economy.

After starting as a search engine in the mid-1990s, Yahoo grew into a full-service information and shopping portal and at one point became the world’s most popular destination on the Internet. Yahoo also was one of the Internet’s biggest financial success stories for a while, with revenue nearly doubling last year, to $1.1 billion, and profits of $291 million.

But the company’s dependence on advertising – which accounted for nearly 90 percent of last year’s revenue – has proven to be problematic in the dot-com meltdown and the overall slowing of the economy.

“It’s been a real tough quarter for Internet advertising,” said Abhishek Gami of William Blair & Co.

Yahoo had more than 55 million unique visitors in January, behind America Online Inc.’s and Microsoft Corp.’s sites, according to Jupiter Media Metrix. It was the first time since July 2000 that Yahoo trailed Microsoft.

By comparison, AOL had more than 64 million unique visitors and Microsoft had 56.2 million. The number is a count of total distinct users who visited a Web site or online property at least once in a given month.

Yahoo said it expects to break even in the first quarter, which ends March 31, excluding one-time charges. Analysts surveyed by First Call/Thomson Financial had been expecting earnings of 5 cents per share, down from 10 cents per share a year ago.

For all of 2001, analysts were expecting earnings of 36 cents a share. Yahoo stopped short of issuing formal guidance for the year because business conditions for the final six months are unclear, but chief financial officer Susan Decker said Yahoo was “committed to achieving break-even levels of profitability.”

Yahoo, which will formally announce earnings on April 11, also said it expects first quarter revenues of between $170 million and $180 million; a year ago, Yahoo posted revenue of $228.4 million. Even worse, deferred revenue from 2000 will account for a whopping $117 million of this quarter’s sales figure.

Yahoo said it was being hurt as the weakening economy forced advertisers to cut back on their marketing. The company also is encountering difficulties as its advertising base shifts from Internet businesses to more traditional companies.

“All businesses in the United States are facing challenging economic conditions that have weakened further in recent weeks, and as consumer confidence and spending has deteriorated, a broad range of customers have delayed their spending across all media formats until their economic outlook improves,” Koogle said.

Yahoo also has been suffering turnover in a number of its top divisions – in recent weeks, the company’s heads of operation for Asia and Europe have resigned.

For months, rumors have circulated that Yahoo would merge with another company, most likely an entertainment titan such as Walt Disney Co. or Viacom Inc. that could help it compete with the AOL-Time Warner Inc. behemoth.

Koogle, however, has been saying a deal like that actually could reduce the site’s highly valued breadth of content. And last week, Yahoo adopted a shareholder rights plan, known as a poison pill, that would likely deter any attempt at a hostile takeover. The company said the plan was not “in response to any effort to acquire control of Yahoo,” however.

Yahoo also announced a stock repurchase program Wednesday of up to $500 million of its outstanding shares over the next two years. Shares of Yahoo are trading more than 90 percent off their 52-week high of $205.63, set last March.

-Ian.

http://dailynews.yahoo.com/h/nm/20010111/ts/media_timewarner_dc_5.html

Thursday January 11 10:17 PM ET AOL Acquires Time Warner After FCC Approval

By Jeremy Pelofsky

WASHINGTON (Reuters) – Internet giant America Online Inc. on Thursday acquired cable and media conglomerate Time Warner Inc., becoming the world’s largest media company after winning conditional approval from the Federal Communications Commission.

Exactly a year and a day after the companies announced their historic marriage of old and new media, the five-member FCC unanimously agreed to let AOL and Time Warner go forward despite a dispute over what conditions to put on the companies.

However, the commissioners voted 3-2 to place restrictions on the new company’s advanced instant messaging system when it runs over Time Warner’s cable lines. They also voted to force further access to the cable pipeline by competing Internet services.

“These conditions are designed to protect the open competitive nature of the Internet,” FCC Chairman William Kennard said. “They protect consumers and avoid heavy-handed regulation by using a narrowly-tailored market opening approach.”

The FCC approval, after months of internal discussion at the agency, allowed the world’s biggest Internet services provider to close its $106.2 billion purchase of the media and cable conglomerate to create an unparalleled company spanning television programming, movies, magazines and cyberspace.

Time Warner has the second-largest collection of cable systems in the United States and an enormous publishing arm that includes Sports Illustrated and People magazines while AOL has close to 29 million Internet subscribers, including 2.6 million CompuServe members.

The two companies won antitrust approval from the Federal Trade Commission on Dec. 14 after agreeing to open cable television lines to several rival Internet service providers before launching AOL’s own service and allowing consumers a wide choice of content. THE NEW AOL TIME WARNER

The companies closed the deal late on Thursday and the new media and Internet behemoth will be called AOL Time Warner with headquarters in New York City. It will trade on the New York Stock Exchange under the symbol “AOL” .

Shares of AOL closed up $2.34 to $47.23 while shares of Time Warner shares rose $4.19 to $71.19.

“AOL Time Warner will lead the convergence of the media, entertainment, communications and Internet industries, and provide wide-ranging, innovative benefits for consumers,” Steve Case, chairman of the new company, said in a statement.

Prior to the combination, the companies had said they expected revenues of more than $40 billion in their first year, growing at 12 to 15 percent a year.

“We are hitting the ground running with a clear road map for creating value for our customers, business partners, shareholders and employees,” said Gerald Levin, chief executive officer of AOL Time Warner.

Although consumer groups had pressed hard for regulators to put strict limitations on the combination, one organization hailed Thursday’s action by the FCC as a step toward expanding consumer choice.

“What could have been a disaster for consumers now holds the potential to promote competition and consumer choice,” Gene Kimmelman, co-director of Consumers Union said in a statement. The companies had hoped for quick FCC approval once they got FTC clearance but communications regulators became locked in weeks of debate over details of its own set of conditions.

The conditions adopted did not appease all sides however. The two Republicans on the panel, Michael Powell and Harold Furchtgott-Roth, disagreed with attaching any conditions, while Democrat Gloria Tristani wanted tougher ones on instant messaging. CONDITIONS ON AOL TIME WARNER

If the new AOL Time Warner launches advanced instant messaging services like video conferencing across its high-speed cable pipeline, it will have to make it interoperable with rival instant messaging services, the FCC said.

But, the commission stopped short of forcing AOL to make its current popular instant messaging software that allows real-time chats via typed messages interoperate with that of rivals like Microsoft and ExciteAtHome .

“At the end of the day, I believe the record and the anti-competitive theory did not support mandating interoperability,” Powell said in a statement.

While Tristani pushed hard for the tougher condition she said ”voting in favor of the decision serves consumers better than lodging a dissent.”

The instant messaging conditions expire in five years but AOL Time Warner can petition the FCC earlier arguing that the conditions are no longer necessary because contracts with big competitors have been reached or an industry-wide standard for interoperability exists.

As for access for rival Internet service providers (ISPs) to the new company’s cable lines, which can offer consumers high-speed Internet service, the companies were required to allow consumers to have their pick of ISPs carried on the cable lines.

AOL Time Warner cannot pressure consumers to subscribe to its own Internet service and must allow the unaffiliated ISPs on thesystem to choose the content of their opening page. The rival ISPs can also have direct billing with their customers, according to the FCC.

Additionally, the FCC said it expects the new company to negotiate in good faith with small and regional ISPs as well as big ones. AOL Time Warner already has signed up EarthLink Inc., the No. 2 ISP in the United States, to offer its own Internet service.

Instead of subjecting AOL Time Warner to conditions on the nascent market of interactive television, the FCC said it will seek comment on the emerging technology.

However, the FTC antitrust authorities in its review of the deal prohibited the merged company from discriminating against content that passes through the systems provided by rivals like The Walt Disney Co.

“>http://www.apple.com/DTDs/PropertyList-1.0.dtd”> date-sent 979287848 flags 570686593 original-mailbox local:///Import/foib sender Ian Andrew Bell <hey [at] ianbell [dot] com> subject @F: Big Surprise.. to foib [at] egroups [dot] com ]]> 3425 https://ianbell.com/2000/08/11/nullsoft-at-it-again/ Fri, 11 Aug 2000 19:59:11 +0000 https://ianbell.com/2000/08/11/nullsoft-at-it-again/ Interestingly, read to the bottom and you’ll find info about AIMster.

http://dailynews.yahoo.com/htx/ap/20000810/tc/aol_mp3_search_2.html

Thursday August 10 7:10 PM ET AOL Takes Down Music Search Engine By PETER SVENSSON, AP Business Writer NEW YORK (AP) – America Online Inc. (NYSE:AOL – news) on Thursday once again reined in a subsidiary that has caused it embarrassment in the past, shutting down a search engine for digital music run by Nullsoft, an AOL unit that also has created a Napster-like file-sharing program. The search engine pointed consumers to Web pages with digital music in the popular MP3 format, which the recording industry says has become a vehicle for piracy. “We don’t have an efficient process for distinguishing between legal and illegal MP3s, so we decided to take it down until we can address that,” said AOL spokesman Jim Whitney. The search engine was located on the site that distributes Winamp, a popular MP3 player program for Windows written by Nullsoft. On Thursday, the Search button was still active on the Winamp site, but only returned this message when clicked: “Sorry. Search unavailable at this time. Sad, sad Nullsoft.” Nullsoft programmers sent AOL scrambling in March, when they posted Gnutella, a program that lets users exchange files, including software and music, over the Internet. It was quickly yanked, but has subsequently spread on the Web. Nullsoft’s Web site proclaims that they are “legitimate nihilistic media terrorists as history will no doubt canonize us.” Napster, a program similar to Gnutella that only lets users exchange MP3 files, has been sued by the recording industry for allegedly enabling copyright violations. The Recording Industry Association of America has also sued search engine MP3Board Inc. for providing links to outside Web pages that the industry considers to be copyright violators. The small San Rafael, Calif., company has countersued and last month started using a technology called LinkBlaster to allow copyright holders to delete links to their music on its site. There is still plenty of copyrighted music available through the site. Other Web search engines, such as AltaVista and Lycos’ Hotbot, also allow searches for MP3 files. In another twist, a programmer’s group in Troy, N.Y., on Wednesday released an add-on to AOL’s Instant Messenger that allows users to search the computers of friends who use the same program and download files from them. Instant Messenger, distributed free by AOL, is the dominant “chat” program. Even without add-ons, it allows users to download files from designated folders of other users who give their permission. The free Aimster add-on improves on this by allowing searches in these folders, creating a file-sharing network similar to Napster in a group of friends. AOL spokesman Andrew Weinstein said the company was aware of Aimster and was “looking into it.” –

-Ian.

http://dailynews.yahoo.com/h/nm/20000516/wr/terra_agreement_3.html

Tuesday May 16 7:49 PM ET Terra Agrees to Buy Lycos for $12.5 Billion By Jessica Hall NEW YORK (Reuters) – Spanish Internet group Terra Networks SA (NasdaqNM:TRRA – news) agreed on Tuesday to buy U.S. Internet search company Lycos Inc. (NasdaqNM:LCOS – news) for $12.5 billion in stock, in a move to create one of the world’s largest Internet companies and broaden its geographic reach.

Lycos’ novel online programming, as well as its youthful customer base, will help Terra turn its string of companies across Latin America and Europe into a World Wide Web powerhouse with broader global reach, industry analysts said. Lycos also will allow Terra, the fast-growing Internet arm of Telefonica de Espana SA (TRR.MC), to target the 30 million Spanish-speakers in the United States.

The merger, which was widely expected, as well an expanded partnership with German media company Bertelsmann AG and a new wireless joint venture with Telefonica, will help the companies better compete against Internet industry leaders America Online Inc. (NYSE:AOL – news) and Yahoo Inc. (NasdaqNM:YHOO – news)

“If your view of the world is that you need to be global, and you need to be in the U.S., then Lycos is a reasonable move,” said Warren Thune, vice president for Mercer’s Internet strategy group in Washington, D.C. “Lycos has knowledge about how to grow quickly and compete in the U.S., and Terra has knowledge about targeting niche market and Spanish-speaking customers that Lycos could capitalize on,” Thune said. Shares of Lycos surged about 60 percent in the past week in anticipation of the deal.

Terra agreed to buy Lycos Inc. for $97.55 a share, Lycos’ stock closed at 72-5/8, up 11, on Nasdaq. Terra’s stock fell 3-5/16 to 53-9/16 on Tuesday as investors feared that the acquisition may be too expensive.

The combined company, which will be called Terra Lycos Inc., will have pro forma 2000 revenues of about $500 million and together have an estimated 50 million unique users and 175 million page views per day. The company will have operations in 37 countries.

“Our combination brings together many complementary strengths that we believe will enable Terra Lycos to generate consistently higher growth in revenues, cash flow and users than either company could expect to achieve independently,” said Juan Villalonga, who is chairman of both Telefonica and Terra.

Villalonga will head the merged Lycos-Terra. Robert Davis, currently Lycos president and chief executive, will be chief executive.

Bertelsmann, Telefonica Play Significant Role As part of the merger pact, Bertelsmann, the third-largest media company in the world, agreed to purchase $1 billion of advertising, placement and integration services from Terra Lycos over five years.

Terra-Lycos, meanwhile, will gain access to Bertelsmann’s books, music, television, film and other media content, on preferred terms. This alliance builds on the existing Lycos-Bertelsmann joint venture in Europe — Lycos Europe.

“What will be interesting to see is what Bertelsmann can bring to the table, since that’s who has the most impressive content,” said Patrick Keane, senior analyst with research firm Jupiter Communications.

Terra Lycos also will have access to all of Telefonica’s media content. Telefonica is the largest broadcaster and the second largest pay-television operator in Spain and Argentina, where it also owns leading radio stations.

Terra Lycos will also own 49 percent of a new wireless joint venture being established in partnership with Telefonica. Terra Lycos will gain access to Telefonica’s extensive cable, fixed line, broadband, satellite and wireless networks, which now serve more than 60 million customers globally.

The relationships between the companies could become even more intertwined. Bertelsmann Chief Executive Thomas Middelhoff said a new deal between Bertelsmann and Telefonica could be announced later this week or the beginning of next week. He did not elaborate.

Terms Of The Deal Under the terms of the agreement, each Lycos share will swapped for $97.55 of Terra ordinary shares, or their equivalent in Terra American Depository Receipts. The deal is subject to a so-called collar, which protects against a decline in Terra’s stock price.

Terra shareholders, including Telefonica, will own between 54 percent and 63 percent of Terra Lycos, while Lycos shareholders will own the other 37 percent to 46 percent of the combined company.

As part of the deal, Telefonica agreed to underwrite a $2 billion rights offering by Terra. Upon completion of the offering, Terra Lycos will have more than $3 billion in cash.

The Lycos acquisition continues Telefonica’s Villalonga’s track record of aggressively bidding on acquisition targets. Previous bold moves include its bid for Brazilian fixed-line telephone company Telesp and a 5.5 billion euro all-share bid for Dutch television company Endemol Entertainment (EMOL.AS).

The Lycos deal may help Villalonga regain investor confidence after Telefonica’s failure to clinch a merger two weeks ago with KPN Telecom (KPN.AS) of the Netherlands, analysts said.

Some Concerns About Deal

While Lycos has been looking for partners or a buyer since its deal with Barry Diller’s USA Networks Inc. (NasdaqNM:USAI – news) fell through last year, some analysts expressed caution on the Terra deal.

Terra’s stock, although down from a 52-week high of 145, is still seen by some analysts as overpriced. Terra has a valuation of $10,000 per subscriber, compared with less than $5,000 for industry leader America Online Inc. (AOL.N), Salomon Smith Barney analyst Lanny Baker said in a research report. Concerns about Internet access pricing pressure, customer turnover and the shift toward high-speed Internet infrastructure could muddy investor enthusiasm for the deal, analysts said.

Terra Lycos will be listed on Nasdaq and Madrid’s stock exchange. The deal is expected to close in the third quarter of calendar year 2000.

“Also, drkoop.com said it had restructured an agreement with America Online Inc. in which AOL would get equity in the company instead of cash payments for a deal in which drkoop.com was to pay the Internet giant a guaranteed $89 million over four years. The restructuring would give AOL 10 percent of drkoop.com based on current shares outstanding, the company said.”

So, the strategy seems to be:

– Cut a deal with AOL with revenue guarantees of, say, $90M over 4 years. – Go public, partly on the strength of your deal with AOL. – Make sure senior executive sells all of their vested stock at the peak. – Develop a burn rate of $6 Million/mo. with no revenue. – Faced with watching their partner (ie. YOU) go tits up, offer AOL an equity- instead-of-cash deal to meet the revenue guarantees. – Order your BMW Z8. – Retire to Los Altos Hills / become a Venture Capitalist (same thing).

-Ian.