NEW YORK -- UGO Networks Inc. said Tuesday it is acquiring the assets of rival online entertainment hub Bla-Bla Entertainment Network for an undisclosed amount.
UGO and Bla-Bla both run content networks and provide advertising, and technology support to their affiliated sites. UGO, which has 350 affiliated sites, is acquiring Bla-Bla's network of sites, according to a UGO spokeswoman.
"The addition of the Bla-Bla network is expected to increase revenues significantly as well as create added synergies in our business," J Moses, chief executive and president of UGO, said in a prepared statement. "It will have a positive effect on our break-even, which is due to happen before calendar year-end 2001."
UGO will receive an undisclosed investment from Bla-Bla's backers, which include Liberty View Equity Partners and Hudson Partners.
Bla-Bla couldn't be reached for comment.
In March, UGO said it had raised $23 million, and at the time laid off 30% of its 130 employees. As a result of the deal announced Tuesday, all but a "few" of Bla-Bla's 16 employees will be laid off, the UGO spokeswoman said. No additional UGO job cuts are expected.
UGO says it has 3.8 million unique visitors a month, and believes its traffic will be doubled by the acquisition. The company said it had $15 million in revenue in the last year.
"There's a lot of work to be done on making Internet advertising more effective, and when the advertising market comes back in general, so will the Internet advertising market,"said Jay N. Goldberg, a general partner with Hudson Ventures Partner, one of Bla-Bla's first investors.
With the ad market in the doldrums, Mr. Goldberg believes Bla-Bla has a better chance for survival as part of a larger organization. "It's about reducing the expenses,"he said.
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