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Idealab Affiliate EWallet Agrees to Buy PointCast

Internet: Deal would make it possible for PointCast's 5 million subscribers to get a 'personal shopping service.'

May 11, 1999|CHARLES PILLER and DEBORA VRANA | TIMES STAFF WRITERS

EWallet, a San Diego e-commerce company affiliated with Pasadena business incubator Idealab, has agreed to acquire PointCast Inc. a once-highflying Internet company, industry sources said Monday.

Although financial terms of the deal were not revealed, it represents another major move for Idealab, started by entrepreneur Bill Gross in 1996.

The deal would allow EWallet to instantly offer PointCast's estimated 5 million subscribers a "personal shopping service" that would allow them to see immediately when products they want, such as a pair of Gap jeans, are being marked down, Gross said.

The merged company would be based in Santa Clara and keep the PointCast name.

"It's really going to be powerful. We're bringing e-commerce to PointCast and can use PointCast to make e-commerce smoother," said Gross, who is also chairman of EWallet.

Sunnyvale, Calif.-based PointCast, with about 100 employees, pioneered "push" technology, which delivers a constant stream of news and information to subscribers through a Web browser. Initially touted as a "killer app" for the Web, push quickly lost popularity when it was discovered to hog network resources.

But Gross said there is a new version of PointCast that scales back its size and enhances the e-commerce experience.

"We can have a bar in the corner of their screen offering real-time auctions," Gross said. "They can see price movements on products immediately."

Founded almost a year ago, EWallet provides a software application designed to enable consumers to pay for purchases at almost any Web site. The software allows users to store credit card information on their computer desktops, which will save them from having to type it in each time they make a purchase on the World Wide Web.

The privately held company, with about 25 employees in San Diego, expects to earn revenue from advertising and by directing shoppers to so-called portal sites where they can search for merchandise.

PointCast, in its heyday two years ago, was the subject of buy-out discussions by News Corp. for as much as $450 million. But its fortunes declined sharply in tandem with the popularity of its approach to push.

PointCast canceled an initial public stock sale last summer.

"I can't really see any acquisition of PointCast making sense these days. Their audience isn't very large and their technology has seen its day" despite the addition of an online shopping component last fall, said Patrick Keane, an analyst with Jupiter Communications in New York.

Idealab has helped start dozens of businesses--including EToys, an online toy seller, and Free-PC, which gives away PCs to consumers in return for an agreement to accept on-screen ads selected according to their personal profiles. Idealab has grown into one of the most powerful players in Southern California's growing Tech Coast.

"Right now PointCast is a property in trouble," said Rob Enderle, an analyst with Giga Information Group, based in Norwell, Mass. "But if you took PointCast's service and wrapped it around the kinds of properties that Idealab already has, you might come up with something compelling."

PointCast did not return calls seeking comment.

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Times staff writer Charles Piller reported from San Francisco and Times staff writer Debora Vrana reported from Los Angeles.

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