First Virtual and CUseeMe Merge

First Virtual Communications (www.fvc.com) and CUseeMe Networks ( www.cuseeme.com) announced that they are merging in a stock for stock deal. The merged company will provide videoconferencing and IP video solutions, while retaining the First Virtual Communications name.

First Virtual will issue shares of its common stock representing approximately 47 percent of the combined company, at an exchange ratio of approximately 1.254. The transaction is expected to be complete in the second quarter of 2001. The combined company will be headquartered in Santa Clara, Calif. — headquarters of First Virtual.

Both companies' stock prices rose today in response to the news. CUseeMe was up almost 14 percent in mid-day trading.

"Video is the critical component that will drive the advancement of rich media communications and this merger brings together two leaders in IP videotelephony. We believe it gives us the critical mass to significantly expand our existing end-to-end rich media platform," said Ralph Ungermann, chairman and CEO of First Virtual Communications.

Killko Caballero, president and CEO of CUseeMe Networks, said that the companies complement each other well. "By merging our resources and IP video experience, we believe the combined company will be able to pursue a larger market and realize greater opportunity than either company could anticipate on its own," said Caballero.

First Virtual Communications' offering, Click to Meet, lets users access video services, including video and audio telephony, data collaboration, and streaming. By contrast, CUseeMe Networks is a software provider, providing multi-point videoconferencing servers. It is also famous for purchasing popular videoconferencing software CU-SeeMe from Cornell University. It even has a consumer-level site, called CUseeMe World (www.cuseemeworld.com), to promote its offerings.

Ralph Ungermann will be executive chairman of the board of the combined company and Killko Caballero will be the new CEO.