Qualcomm Incorporated (Nasdaq: QCOM), pioneer and world leader of Code Division Multiple Access (CDMA) digital wireless technology, and NetZero, Inc. (Nasdaq: NZRO), the nation's largest provider of free Internet access based on registered users, announced today that Qualcomm has invested $144 million in NetZero. As a result of the transaction, Qualcomm now owns approximately 10 percent of NetZero's outstanding common stock, or approximately 11.5 million shares purchased at a price of approximately $12.50 per share.
"Qualcomm is focused on the convergence of CDMA and the Internet. Through this investment, Qualcomm's core wireless and Internet competencies can be combined with the innovative technologies, business models and revenue streams that NetZero has developed to drive wireless Internet adoption," said Dr. Paul E. Jacobs, executive vice president of Qualcomm. "Qualcomm will immediately benefit from NetZero's distribution of Qualcomm's Eudora as its preferred e-mail client software solution."
"NetZero has already demonstrated its ability to achieve a dominant market position in the narrowband dial-up arena, becoming the nation's largest free Internet service provider with more than three million registered users," said Mark R. Goldston, chairman and CEO of NetZero. "The next step in our evolution involves executing on our vision to become a leading provider of universal Internet access across a wide range of connectivity platforms, including narrowband dial-up, high-speed wireless, broadband and cellular. NetZero's goal is to provide its subscribers access to the Internet, allowing them to navigate and receive email across a variety of devices, including laptop and desktop computers, Internet appliances, mobile phones and Personal Digital Assistants."
"We are extremely pleased to have Qualcomm as an investment partner," Goldston added. "Qualcomm's investment reinforces NetZero's already strong capital position and gives us an incredible platform for growth."
NetZero will also distribute Qualcomm's award-winning Eudora email management software as the preferred email program for NetZero's users. Qualcomm released Eudora 4.3 on Feb. 15, 2000, making the full, industrial-strength email program available to users free of charge when they use the product in Sponsored mode, which displays advertising in a small window in the user interface. Eudora will be included on NetZero CDs and will be part of the standard install program for NetZero's client access software. Eudora, as distributed by NetZero, will install in Sponsored mode and will be co-branded with NetZero. The two companies will share the revenue generated by advertising in copies of Eudora distributed by NetZero. Terms of the ad revenue sharing agreement were not disclosed.
NetZero, Inc. is a leading provider of advertising and commerce-supported Internet access offering a broad range of interactive marketing, research and measurement solutions. NetZero offers consumers free access to the Internet, free e-mail and customizable navigation tools that provide "speed dial" to key sites on the Internet. Through proprietary technologies, NetZero offers advertisers unique targeting capabilities through numerous online advertising and sponsorship channels. The company's CyberTarget division offers marketers and advertisers mass-scale, online market research and measurement services. NetZero is a Cisco Powered Network, providing its access services to more than three million registered users in 2,500 cities across the United States. More information about the company is available at www.netzero.net.
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. The Company's business areas include integrated CDMA chipsets and system software; technology licensing; Eudora® email software for Windows® and Macintosh® computing platforms; satellite-based systems including portions of the Globalstar™ system and wireless fleet management systems, OmniTRACS® and OmniExpress™. Qualcomm owns patents that are essential to all of the CDMA wireless telecommunications standards that have been adopted or proposed for adoption by standards-setting bodies worldwide. Qualcomm has licensed its essential CDMA patent portfolio to more than 75 telecommunications equipment manufacturers worldwide. Headquartered in San Diego, Calif., Qualcomm is included in theS&P500 Index and is a 2000 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis, and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 26, 1999, and most recent Form 10-Q.
Potential risks and uncertainties related to NetZero include, among others, NetZero's ability to develop, market and sell new products; the company's unproven business model and limited operating history; the company's ability to grow its user base, generate advertising revenues and decrease telecommunications costs; the effects of competition for users and advertisers; the loss of key customers; technological problems or developments; and governmental regulation. More information about potential factors that could affect the company's business and financial results is included in the company's Form 10-Q and other filings with the Securities and Exchange Commission (http://www.sec.gov) including (without limitation) information under the captions, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors."