NEW YORK (AFP) - Dow Jones has agreed to buy online financial news provider Marketwatch Inc for 519 million dollars, or 18 dollars per share, the two companies said in a joint statement.
The purchase price of 463 million dollars comes on top of MarketWatch`s 56 million dollars of cash on hand, the companies said Monday.
The sale price reflects a 46 percent increase over MarketWatch`s average price on the Nasdaq stock index over the past quarter. Shares of San Francisco-based company were valued at 16.79 at the close of trading Friday.
The company netted a profit last year of 1.7 million dollars on 57.8 million dollars of revenue.
Dow Jones said MarketWatch dispatches would be incorporated into its current online financial publications, including the website version of its flagship daily Wall Street Journal (www.wsj.com).
"With this acquisition, Dow Jones will continue and strengthen its `best of both worlds` approach, which includes both the subscription Wall Street Journal Online as well as websites that are free to users and supported by advertising," said Gordon Crovitz, senior vice president of Dow Jones and president of its electronic publishing division.
Economies of scale created by the merger would bring cost savings of some 12 million dollars, while increasing the company`s online readership and creating the possibility for "double-digit growth in online advertising," the company said in a statement.
"Joining Dow Jones is a great next step for MarketWatch. Being part of one of the most respected media conglomerates in the world gives us a terrific platform to grow our business and compete with the largest media companies," said Larry Kramer, chairman and chief executive of MarketWatch.
The Wall Street Journal Online is the largest paid subscription news site on the web, with more than 700,000 subscribers, Dow Jones said. The company also publishes Barron`s and the Far Eastern Economic Review.
Marketwatch operates two free financial information sites, CBS MarketWatch.com and BigCharts.com, which derive revenue from advertising. The two sites serve eight million unique visitors per month.
Together the sites will see traffic of nine million unduplicated visitors per month, Dow Jones said.
Marketwatch was founded in 1997 by Kramer, a former Washington Post executive, during the heydey of the Internet boom.
According to press reports Dow Jones beat out Yahoo, The New York Times Company, Viacom and Pearson, publisher of the Financial Times, in a month-long bidding war for MarketWatch, parent company of the financial news Web site CBS MarketWatch.
MarketWatch entered into an information sharing agreement in April 2003 with two financial information services, AFX News, an affiliate of Agence France-Presse and XFN a Chinese company based in Hong Kong.
MarketWatch, AFX News and XFN, together formed World Business News, which provided news dispatches about the United States, Europe and Asia for investors and others in the business world.
MarketWatch also provides radio and television segments for affiliate of CBS broadcast stations.
11/15/2004 - 16:28 GMT - AFP