AOL Acquires Mirabilis Ltd.

Monday America Online announced that it had acquired Israel-based Mirabilis Ltd., the developer of the widely popular ICQ software. AOL will pay $287 million in cash up front to purchase all of Mirabilis' assets, as well as up to $120 million over the next three years starting in the fiscal year 2001 based on performance growth.

According to AOL, Mirabilis will continue operation in Tel Aviv with its own corporate identity, and ICQ will remain free for its estimated 12 million unique users worldwide. Many users remain skeptical.

"The acquisition of ICQ technology dramatically increases our presence on the Web," America Online chairman and CEO Steve Case said. "Strategically, this is one of our most important initiatives for three reasons. First, the ICQ software dashboard stays on a user's screen all the time - making it a natural starting point for content, context, and community, and providing us with an unparalleled launch pad for a broader Web portal strategy. Second, ICQ has attracted one of the fastest growing and most loyal communities in cyberspace. And third, ICQ has a strong international reach, further accelerating our global expansion."

ICQ, an acronym play on "I Seek You," is used, among other things, by gamers to keep track of other gamers currently online in any part of the world. This way one would be able to tell when friends were online in order to get together for games, chat sessions, and so forth.

"We're delighted that ICQ is joining the world leader in interactive services and brands," said Arik Vardi, CEO of Mirabilis. "With America Online's resources and expertise behind ICQ, we will be better able to enhance our service to the Internet community."