AOL (AOL) has sold its instant messaging company ICQ to Russian holding firm DST, the companies announced today.
DST paid $187.5 million.
AOL bought ICQ parent company MIrabilis in June 1998 for $287 million.
It’s kind of fun to read how then AOL Chairman and CEO Steve Case crowed about the deal:
“Strategically, this is one of our most important initiatives for three reasons. First, the ICQ software dashboard stays on a user’s screen all the time–making it a natural starting point for content, context and community, and providing us with an unparalleled launch pad for a broader Web portal strategy. Second, ICQ has attracted one of the fastest growing and most loyal communities in cyberspace. And third, ICQ has a strong international reach, further accelerating our global expansion.”
Today, AOL CEO Tim Armstrong said:
“As AOL continues its turnaround effort, we’re fortunate to find a great home for ICQ with DST. DST is a leading innovator in the Internet investment space and has a significant presence in the markets where ICQ is strong. Founded and run in Israel, ICQ has been a revolutionary company on the Internet. We wish them great success as a part of DST and will be rooting for them going forward.”
So what’s AOL going to do with the cash? Our best guess: buy Associated Content for something just under $100 million.
Anyway, here’s the release:
MOSCOW & NEW YORK–(BUSINESS WIRE)–AOL Inc. (NYSE:AOL – News) and Digital Sky Technologies Limited (DST), the largest Internet company in the Russian-speaking and Eastern European markets, announced today that they have reached an agreement for DST to acquire ICQ – the leading instant messaging service in Russia and a number of other international markets – for $187.5 million.
ICQ was created in 1996 by the Israeli company Mirabilis. AOL acquired the assets of Mirabilis, primarily ICQ, in June 1998. Available in 16 languages, ICQ has more than 32 million unique visitors per month.* Approximately 80 per cent of ICQ users are between the ages of 13 and 29 and spend an average of more than five hours a day connected to the service, according to internal data. ICQ has built a successful presence in markets like Russia, Germany, Czech Republic and Israel.
“The acquisition of ICQ is a strategic enhancement of our business in Russia and Eastern Europe. ICQ’s long-standing brand name and its sizeable loyal customer base together represent a very attractive opportunity to further strengthen our position in the region,” said Yuri Milner, Chief Executive Officer of DST.
“As AOL continues its turnaround effort, we’re fortunate to find a great home for ICQ with DST,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL. “DST is a leading innovator in the Internet investment space and has a significant presence in the markets where ICQ is strong. Founded and run in Israel, ICQ has been a revolutionary company on the Internet. We wish them great success as a part of DST and will be rooting for them going forward.”
*February 2010 comScore Media Metrix data
About Digital Sky Technologies
DST was founded in 2005 and is the largest Internet company in the Russian-speaking and Eastern European markets and one of the leading investment groups globally to exclusively focus on Internet related companies. DST, together with its affiliate DST Global, also hold stakes in Internet world leaders such as Facebook, Zynga and GroupOn. DST is a privately held company backed by leading Russian and Western financial institutions. For more information please visit www.dst-global.com.
AOL Inc. (NYSE:AOL – News) is a leading global Web services company with an extensive suite of brands and offerings and a substantial worldwide audience. AOL’s business spans online content, products and services that the company offers to consumers, publishers and advertisers. AOL is focused on attracting and engaging consumers and providing valuable online advertising services on both AOL’s owned and operated properties and third-party websites. In addition, AOL operates one of the largest Internet subscription access services in the United States, which serves as a valuable distribution channel for AOL’s consumer offerings.
This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding the anticipated benefits of the transaction, the expected closing date and other statements identified by words such as “may,” “will,” “intend,” “should,” “expect” or similar expressions. These statements are based on the current expectations and beliefs of DST’s and AOL’s management, and are subject to uncertainty and changes in circumstances, including, but not limited to, the approval of the transaction by antitrust authorities, the satisfaction of the closing conditions to the transaction and the parties’ performance of their obligations under the agreements. Any forward-looking information is not a guarantee of future performance and actual results may vary materially from those expressed or implied by the statements herein, due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, as well as factors affecting DST’s and AOL’s operations and businesses. More detailed information about these factors as they relate to AOL may be found in the section entitled “Risk Factors” in AOL’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission. DST and AOL are under no obligation to, and expressly disclaims any obligation to, update or alter the forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise.
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