American Greetings snaps up e-card rival

September 17, 2001 (IDG News Service)

American Greetings Corp. will pay $35 million in cash to acquire Blue Mountain Arts, the electronic greeting card arm of Internet access company At Home Corp., the company said last week.

The acquisition comes less than two years after At Home, which does business as Excite@Home, spent $780 million in cash and stock to buy Blue Mountain at the height of the dot-com boom.

American Greetings will add its former rival to its family of online greeting card providers, which include AmericanGreetings.com, Egreetings.com and BeatGreets.com. The company spent $28.6 million to acquire the latter two Web properties in February.

American Greetings said it doesn't expect the acquisition to hinder its earlier plans of taking its online unit to profitability in the fourth quarter. The company also said the acquisition would boost profits for next year, because the new unit will bolster e-commerce sales and marketing revenue.

At Home said it was selling the electronic-card unit to focus more on broadband and to control its operating costs. The company has been struggling financially in recent months. Its chief financial officer resigned last week, and it's suffering from a debt that has reached about $1 billion.

Under the terms of the deal, American Greetings said Blue Mountain would continue to provide its electronic greeting cards on At Home's network of Web sites for the next three years. Also, At Home said it will buy about $3 million in advertising on AmericanGreetings.com and BlueMountain.com.

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• Greeting card rivals tap tech to stay on top, March 1, 1999