Geoff Kerr, USWeb Corporation, 408-987-3260 or
[email protected]
Investor Contact: Carolyn Aver, USWeb Corporation, 408-987-3295 or
[email protected]
USWeb Corporation and CKS Group Receive SEC Clearance for Merger Proxy Statement
Schedule Merger Close Date; Initiate Search for New Name of Combined Company; USWeb Amends 10-Q Filings
SILICON VALLEY, Calif., - November 20, 1998 - USWeb Corporation (Nasdaq: USWB) and CKS Group, Inc. (Nasdaq: CKSG) today announced that the Securities and Exchange Commission (SEC) has declared effective the joint proxy statement/prospectus required in connection with the pending merger of the two companies. The companies anticipate mailing proxy statements to their respective stockholders during the week of November 23, 1998. The companies have each scheduled meetings of their stockholders on December 16, 1998, and, assuming approval by the stockholders, expect to close the merger immediately thereafter.
The companies also announced today that, until a new name is selected, the combined company will operate under the name "USWeb/CKS." The name "Reinvent Communications," which had been tentatively selected, will not be used as the name for the combined company. The tentatively selected name was subject to a legal claim and, although the companies believe the claim was without merit, there would have been unacceptable restrictions on the use of the name during the lawsuit.
USWeb announced today that it has filed amended Forms 10-Q for the quarters ended June 30, 1998 and September 30, 1998. After discussions with the staff at the SEC, USWeb will reclassify a portion of the value of warrants granted to NBC Multimedia, Inc. in connection with a strategic relationship between USWeb and NBC. Initially, the entire value of the warrants was recorded in operating expenses as stock compensation in the quarter ended June 30, 1998. Instead, a portion of the value is included in cost of revenues. In addition, the estimated value of such portion, as reported and at future reporting dates, will be adjusted based on valuation information available at such dates. As a result of the adjusted valuation, the amended Forms 10-Q reflect an increase in USWeb's net loss for the three and six months ended June 30, 1998, of $3.1 million, and a decrease in USWeb's net loss for the three and nine months ended September 30, 1998, of $7.3 million and $4.2 million, respectively. The amended Forms 10-Q show no effect in any period on net cash flows or on net income (loss) excluding non-cash charges. Although USWeb, with the concurrence of its independent accountants, believes that its original accounting treatment was in accordance with generally accepted accounting principals (GAAP), it has accepted the SEC staff's view with respect to these matters.
Company Background
USWeb Corporation is a leading strategic Internet services firm helping clients achieve their revenue, profit, market share, and customer loyalty objectives through Internet strategies and systems. USWeb works with a diverse and prominent portfolio of clients, from Fortune 100 corporations to medium-size organizations. The Company is headquartered in Santa Clara, California. Additional information about USWeb Corporation is available by calling 408-987-3200.
CKS Group is a marketing communications company for the digital age. Headquartered in Cupertino, California, CKS specializes in offering a wide range of marketing communication services and technology solutions that help companies market their products, services and messages. CKS Group is a provider of marketing communication programs that utilize both traditional marketing disciplines, such as product branding and advertising, as well as advanced technology solutions and new media-including Internet development, Intranet development, database architecture and enterprise systems integration. Additional information is available by calling 408-366-5100.
This press release contains "forward-looking statements" (as defined under securities law) regarding the planned merger of USWeb and CKS. The merger is subject to stockholder approval and other customary closing conditions. There can be no assurance that the merger will be completed on the intended schedule, or at all, or that the combined entities will be able to realize the intended benefits. For additional information about factors that could affect the businesses of USWeb and CKS Group, see the documents filed by the companies with the United States Securities and Exchange Commission.