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AOL to acquire MapQuest
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December 22, 1999: 2:03 p.m. ET
$1.1B stock deal for online directions company to expand e-commerce
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NEW YORK (CNNfn) - America Online Inc. agreed Wednesday to acquire interactive map and driving directions firm MapQuest.com Inc. in a stock deal worth roughly $1.1 billion.
Investors reacted by sending shares of Mapquest down sharply. By midday the stock slumped 23 percent, off 7-5/8 to 24-7/8. AOL fared better, suffering only a 1-7/16 loss to 83-9/16.
Terms of the deal call for MapQuest.com shareholders to receive 0.31558 share of AOL common stock for each share of MapQuest stock. The stock-for-stock transaction is expected to close in the spring of 2000, subject to shareholder and regulatory approval.
AOL (AOL) said the MapQuest (MQST) purchase will boost its e-commerce and advertising reach to local regions on AOL's Digital City, the company’s local content network. By offering users maps and driving directions, AOL expects an increase in its entertainment, dining and shopping areas, including its MovieFone film listings and ticketing service.
"Eighty percent of purchases occur 20 minutes from home, and MapQuest will give us additional strength in this critical local market, with maps and directions driving new increases in local commerce," said Ted Leonsis, president of AOL's Interactive Properties.
MapQuest services also will be featured across other AOL brands, including AOL, CompuServe, Netscape Netcenter and ICQ.
New York-based MapQuest.com provides maps and driving directions to approximately 1,000 Web sites and can be linked from more than 170,000 sites. It also ranks within the top 50 Web properties overall, according to Web traffic measurement firm Media Metrix, with a reach of almost 6 percent. MapQuest services cover 78 countries in five languages.
"Like calendaring, maps are a great example of a product that is easier to use and more useful online than offline,” said Bob Pittman, president and chief operating officer of America Online. "With AOL's resources and infrastructure behind MapQuest, we can accelerate the distribution of maps on smart phones, PalmPilots and other non-PC devices.”
Internet analyst Fred Moran at Jefferies & Co. told CNNfn that he saw the deal as vehicle for AOL to add more "stickiness" among users and wasn’t concerned by the Mapquest sell-off.
"The deal marks another effort by AOL to solidify proprietary content among users,” Moran said. "A number of deals similar to this have been made between independent players, enhancing sites with value-added content, reducing subscriber churn.”
"Now MapQuest.com has the opportunity to be part of the AOL family and join the leading Internet company. This will shield its investors and provide upside and security over time,” Moran said. 
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AOL, Wal - Mart in Net pact - Dec. 16, 1999
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