USWeb
Encyclopedia
USWeb is currently an Internet marketing
company going by the same name as the original USWeb of the 1990s. The original USWeb was founded as a web design
and site engineering company which expanded during the dot-com boom into online strategy consulting and online marketing. After several mergers with other companies (becoming USWeb/CKS in late 1998, then marchFIRST
, officially on March 1, 1999, which was the date of legal closure of the merger with Whittman-Hart
). Given the circumstances of the surrounding dot-com boom and resulting decline in industry sector revenue for Web consulting, engineering and design services, the original USWeb went bankrupt as part of marchFIRST
and was dissolved.
executives, Joe Firmage
, Toby Corey, and Sheldon Laube along with Ken Campbell and Jim Heffernan from outside firms. USWeb initially set up a network of affiliated companies that provided website design, content development, and hosting services to clients. It began taking in venture capital
in March 1996 with a round of financing led by Softbank
. Firmage explained the initial approach as a form of franchising
, but rather than create a series of consistently similar outposts under a unifying brand, USWeb took the approach of developing a diverse network in which affiliates would specialize in different areas. Upon realization of the difficulty of independently owned affiliates to raise sufficient capital to professionalize their operations, USWeb began to acquire some of its independently owned affiliates.
Using its venture capital resources, USWeb began consolidating the Web services sector by acquiring an increasing percentage of its affiliates and then ceased franchise licensing, with the intended result of achieving both operational and financial economies of scale. While extensive efforts were underway in developing and testing corporate integration strategies, USWeb went public with an IPO
in December 1997 at $10 a share.
The stock rose over the next few months, allowing the share price and stock options to fuel further acquisitions. USWeb ultimately bought up at least 31 other companies, including Ikonic Interactive. CKS had gone public earlier, but its stock had dropped sharply not long before the USWeb IPO. Firmage conceded that the situation reflected an internet bubble, predicting that growth in the internet consulting services sector was subject to growth in investment by both new and older companies and institutions in internet interfaces for their constituencies. Firmage contended that the company's knowledge base would help it scale as it integrated different units, and in October 1998, with the support of Microsoft, launched its USWeb Electronic Services division to utilize institutional knowledge across its professional staff to engineer sharable managed internet services, such as site hosting, email, sector-specific broad application components, and customized such functions on an ASP (Application Service Provider) basis. This later resulted in a formal alliance with Microsoft's DNA project "http://www.microsoft.com/presspass/press/1999/Sept99/USWjointpr.mspx", which later contributed to Microsoft's .Net strategy.
, a leading offline advertising firm. The merger was a stock transaction involving an exchange of 1.5 shares of USWeb stock for each share of CKS. At the time, USWeb was still losing money while CKS had managed to post a profit in its latest quarter. With an estimated value of the transaction approaching $350 million when the deal was announced, the combined market capitalization
of the two companies was around $728 million. The news prompted a fall in USWeb's stock price while CKS stock, which had been trading near 52-week lows, rose initially but then fell again.
Among the benefits touted was joining USWeb's technical and Internet design skills with the traditional advertising and marketing savvy of CKS. The merged company was to be renamed Reinvent Communications, but the new name did not stick and the company was generally known as USWeb/CKS or simply USWeb. With the merger, the company had nearly 2,000 employees and important clients including Apple Computer
, Levi Strauss
, and Harley-Davidson
. Since both companies had been busy making acquisitions, the deal prompted concerns about integrating these into a single organization and a potential culture clash. There was also a wide age gap between the younger USWeb employees and those of CKS.
Firmage initially was to become CEO of the combined company with Mark Kvamme
, CEO of CKS, as chairman. Before the merger was complete, however, Firmage resigned in November to become chief strategist and was replaced by former Oracle executive Robert Shaw. Firmage then left the company entirely in January 1999, after his beliefs in the existence of extraterrestrial life visiting Earth were published online. The merger with CKS Group and formation of the USWeb Electronic Services division with Microsoft's support would be Firmage's last major acts as CEO of USWeb. Firmage revealed in late 1998 that he was working on a book about and supporting research into his appraisal that some UFOs represent extraterrestrial spacecraft, describing some of the implications of that scenario to modern interpretations of historical human anthropological, religious and social development, and the possibility that some modern technology was reverse-engineered from alien spacecraft recovered or otherwise obtained by the U.S. Government in the 1940s.
for over $300 million, USWeb merged with Whittman-Hart
, another consulting firm based in Chicago. The combined company, a merger of equals, had over 10,000 employees with annual revenues exceeding $1B. This deal involved Whittman-Hart exchanging 0.865 shares of its stock for each share of USWeb, and another new name as marchFIRST
Inc. The new company was headed by Whittman-Hart CEO Robert Bernard. Shaw was announced as chairman, but resigned prior to taking on that role. Jean-Marc Pestoni took responsibility for European Office in Zuerich as Managing Director.
With the burst of the dot-com bubble
, marchFIRST went into bankruptcy in April 2001 and its assets were both liquidated and sold to interactive agencies that have long since merged with others. While USWeb - marchFIRST's lifespan was only about four years, it was one of the pioneers of the industry and the largest in the world at over 10,000 employees.
Internet marketing
Internet marketing, also known as digital marketing, web marketing, online marketing, search marketing or e-marketing, is referred to as the marketing of products or services over the Internet...
company going by the same name as the original USWeb of the 1990s. The original USWeb was founded as a web design
Web design
Web design is the process of planning and creating a website. Text, images, digital media and interactive elements are used by web designers to produce the page seen on the web browser...
and site engineering company which expanded during the dot-com boom into online strategy consulting and online marketing. After several mergers with other companies (becoming USWeb/CKS in late 1998, then marchFIRST
MarchFirst
marchFIRST, Inc. was a short-lived international systems integrator and internet consulting company at the tail end of the dot-com boom. marchFIRST was a Nasdaq traded public company whose peak stock price reached $52...
, officially on March 1, 1999, which was the date of legal closure of the merger with Whittman-Hart
Whittman-Hart
-History:Founded by Bob Bernard Bill Merchantz, Rich Colson, and Bill Topol in the Chicago area in 1984, it specialized first in AS/400 IT consulting. It grew steadily, for about 15 years, including some acquisitions. The company went public in 1996...
). Given the circumstances of the surrounding dot-com boom and resulting decline in industry sector revenue for Web consulting, engineering and design services, the original USWeb went bankrupt as part of marchFIRST
MarchFirst
marchFIRST, Inc. was a short-lived international systems integrator and internet consulting company at the tail end of the dot-com boom. marchFIRST was a Nasdaq traded public company whose peak stock price reached $52...
and was dissolved.
Founding and expansion
The company was founded in 1995 by a group of former NovellNovell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
executives, Joe Firmage
Joe Firmage
Joseph Firmage is an American Internet entrepreneur. He founded several business ventures prior to and during the dot-com boom and currently is involved with two closely linked organizations: ManyOne Networks, of which he is CEO, and the Digital Universe Foundation, of which he is a co-founder and...
, Toby Corey, and Sheldon Laube along with Ken Campbell and Jim Heffernan from outside firms. USWeb initially set up a network of affiliated companies that provided website design, content development, and hosting services to clients. It began taking in venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
in March 1996 with a round of financing led by Softbank
SoftBank
is a Japanese telecommunications and internet corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses....
. Firmage explained the initial approach as a form of franchising
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
, but rather than create a series of consistently similar outposts under a unifying brand, USWeb took the approach of developing a diverse network in which affiliates would specialize in different areas. Upon realization of the difficulty of independently owned affiliates to raise sufficient capital to professionalize their operations, USWeb began to acquire some of its independently owned affiliates.
Using its venture capital resources, USWeb began consolidating the Web services sector by acquiring an increasing percentage of its affiliates and then ceased franchise licensing, with the intended result of achieving both operational and financial economies of scale. While extensive efforts were underway in developing and testing corporate integration strategies, USWeb went public with an IPO
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
in December 1997 at $10 a share.
The stock rose over the next few months, allowing the share price and stock options to fuel further acquisitions. USWeb ultimately bought up at least 31 other companies, including Ikonic Interactive. CKS had gone public earlier, but its stock had dropped sharply not long before the USWeb IPO. Firmage conceded that the situation reflected an internet bubble, predicting that growth in the internet consulting services sector was subject to growth in investment by both new and older companies and institutions in internet interfaces for their constituencies. Firmage contended that the company's knowledge base would help it scale as it integrated different units, and in October 1998, with the support of Microsoft, launched its USWeb Electronic Services division to utilize institutional knowledge across its professional staff to engineer sharable managed internet services, such as site hosting, email, sector-specific broad application components, and customized such functions on an ASP (Application Service Provider) basis. This later resulted in a formal alliance with Microsoft's DNA project "http://www.microsoft.com/presspass/press/1999/Sept99/USWjointpr.mspx", which later contributed to Microsoft's .Net strategy.
Merger with CKS
On September 2, 1998, USWeb announced that it would merge "http://web.archive.org/web/19990221111427/usweb.com/overview/usweb_cks.html" with CKS GroupCKS Group
CKS Group was an advertising agency based in Cupertino, California, catering to technology companies. The initials CKS came from the three name partners, Bill Cleary, Mark Kvamme, and Tom Suiter. All three had previously worked for Apple Computer...
, a leading offline advertising firm. The merger was a stock transaction involving an exchange of 1.5 shares of USWeb stock for each share of CKS. At the time, USWeb was still losing money while CKS had managed to post a profit in its latest quarter. With an estimated value of the transaction approaching $350 million when the deal was announced, the combined market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
of the two companies was around $728 million. The news prompted a fall in USWeb's stock price while CKS stock, which had been trading near 52-week lows, rose initially but then fell again.
Among the benefits touted was joining USWeb's technical and Internet design skills with the traditional advertising and marketing savvy of CKS. The merged company was to be renamed Reinvent Communications, but the new name did not stick and the company was generally known as USWeb/CKS or simply USWeb. With the merger, the company had nearly 2,000 employees and important clients including Apple Computer
Apple Computer
Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
, Levi Strauss
Levi Strauss & Co.
Levi Strauss & Co. is a privately held American clothing company known worldwide for its Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Franconia, to San Francisco, California to open a west coast branch of his brothers' New York dry goods business...
, and Harley-Davidson
Harley-Davidson
Harley-Davidson , often abbreviated H-D or Harley, is an American motorcycle manufacturer. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression...
. Since both companies had been busy making acquisitions, the deal prompted concerns about integrating these into a single organization and a potential culture clash. There was also a wide age gap between the younger USWeb employees and those of CKS.
Firmage initially was to become CEO of the combined company with Mark Kvamme
Mark Kvamme
Mark Kvamme is a venture capitalist at Sequoia Capital in Silicon Valley.Mark joined Sequoia Capital in 1999. He currently sits on the board of LinkedIn, Mark Logic, Adbrite, Strongmail, Funny or Die and UJAM. He specializes in media, software and advertising services investments. Before Sequoia,...
, CEO of CKS, as chairman. Before the merger was complete, however, Firmage resigned in November to become chief strategist and was replaced by former Oracle executive Robert Shaw. Firmage then left the company entirely in January 1999, after his beliefs in the existence of extraterrestrial life visiting Earth were published online. The merger with CKS Group and formation of the USWeb Electronic Services division with Microsoft's support would be Firmage's last major acts as CEO of USWeb. Firmage revealed in late 1998 that he was working on a book about and supporting research into his appraisal that some UFOs represent extraterrestrial spacecraft, describing some of the implications of that scenario to modern interpretations of historical human anthropological, religious and social development, and the possibility that some modern technology was reverse-engineered from alien spacecraft recovered or otherwise obtained by the U.S. Government in the 1940s.
Merger to form marchFIRST
In December 1999, after buying boutique management consulting firm Mitchell Madison GroupMitchell Madison Group
The Mitchell Madison Group is a global management consulting firm that focuses on improving financial and operating performance for major corporations. Originally founded in 1994 and re-founded in 2003, it is today widely recognized as a leader in the areas of Strategic Sourcing and globalization...
for over $300 million, USWeb merged with Whittman-Hart
Whittman-Hart
-History:Founded by Bob Bernard Bill Merchantz, Rich Colson, and Bill Topol in the Chicago area in 1984, it specialized first in AS/400 IT consulting. It grew steadily, for about 15 years, including some acquisitions. The company went public in 1996...
, another consulting firm based in Chicago. The combined company, a merger of equals, had over 10,000 employees with annual revenues exceeding $1B. This deal involved Whittman-Hart exchanging 0.865 shares of its stock for each share of USWeb, and another new name as marchFIRST
MarchFirst
marchFIRST, Inc. was a short-lived international systems integrator and internet consulting company at the tail end of the dot-com boom. marchFIRST was a Nasdaq traded public company whose peak stock price reached $52...
Inc. The new company was headed by Whittman-Hart CEO Robert Bernard. Shaw was announced as chairman, but resigned prior to taking on that role. Jean-Marc Pestoni took responsibility for European Office in Zuerich as Managing Director.
With the burst of the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
, marchFIRST went into bankruptcy in April 2001 and its assets were both liquidated and sold to interactive agencies that have long since merged with others. While USWeb - marchFIRST's lifespan was only about four years, it was one of the pioneers of the industry and the largest in the world at over 10,000 employees.