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Tech firm links to the bigtime Charley Lanusse, 29, is president of Starseed, an Ashland-based company that soon will become a subsidiary of GeoCities in a deal worth more than $32 million. GeoCities to buy Starseed in multi-million dollar deal By DAVID PRESZLER ASHLAND -- In a major boon to Southern Oregon's growing technology industry, national Internet power GeoCities will buy Starseed Inc. next month in a deal likely to be worth more than $32 million. The Ashland-based company, whose chief product is an easy and direct way to navigate the World Wide Web known as WebRing, will become a subsidiary of GeoCities, the largest provider of personalized Internet home pages. "We're thrilled," said Starseed president Charley Lanusse. "We've been looking for this type of relationship for quite awhile.'' The move is the most eye-popping in a string of success stories emerging from Southern Oregon's technology industry -- many from Ashland's A Street area. "This is a quantum leap for high tech in the valley," said Charles McHenry, a founding member of the Southern Oregon Telecommunications and Technology Council. Lanusse, 29, will continue to head Starseed, which has 14 employees and will expand soon. The deal is the biggest in a string of successes for Lanusse and his partners, who founded Starseed about five years ago. They have built it into one of the Internet's fastest growing companies; Starseed has more than 900,000 members and adds about 2,200 new ones every day. The WebRing technology, developed by Ashland's Sage Weil, is at the center of the multimillion-dollar deal. Weil, a 20-year-old Starseed partner, expanded the Web ring concept into a practical system. "It allows us to take the technology and integrate it into our system," said Bruce Zanca, GeoCities' vice president for communications. "This Web ring technology is about enhancing the user's experience." WebRing will make GeoCities easier to use, and the company is banking on that ease leading to increased traffic on its Web pages. Both GeoCities and Starseed allow people to communicate with others who have similar interests for free; the companies make the bulk of their money on advertising. The sale will be finalized in December, pending approval from government regulators. The exact sale price will be tied to the closing price for GeoCities stock (GCTY) on the New York Stock Exchange the day the deal is approved. Starseed will get $2 million in cash and the rest in GeoCities' stock -- perhaps as many as 775,000 shares. The $32 million estimate is based on the stock's current price; it closed Thursday at $39.875 a share, up $2.1875. Lanusse holds about a 20 percent interest in Starseed and is one of about 30 shareholders. That group includes Weil and all of the company's employees. The company moved to Ashland in 1996 and Lanusse said it has a unique and close-knit culture that he doesn't expect to change. "We wanted to preserve that," he said. "We wanted a company that understood the value in something like WebRing and our culture." The financial windfall -- though tied to Geocities' stock -- gives Starseed a new measure of security. "We have to stay internationally competitive and the type of resources that you have to continually run though the company are pretty phenomenal," Lanusse said. "And it feels good to have such a big company behind us." GeoCities (found on the Web at www.geocities.com) is based in Santa Monica, Calif., and was founded in 1994. The company has 2.8 million members who have built 22 million personal Web pages. The members are organized into about 40 on-line communities, called neighborhoods, where they can hook up with others who share their interests. For example, "Motor City" is a neighborhood of car enthusiasts. Starseed's WebRing (on the Web at www.webring.com ) groups related Web sites together in "rings" by topic. The sites are linked, allowing users to move from one site to a related one easily and directly. For example, one ring links 67 sites for fans of movie star Harrison Ford. "We provide a very advanced way to find information," Lanusse said. The concept is different from search engines such as Yahoo! and Excite. Search engines allow users to enter a few key words or phrases and find a list of sites containing those words. But search engines often yield thousands of connections, few of which are what the user was looking for. Web rings offer a much more targeted way for users to find the information they want, Lanusse said. Sites in each ring are monitored by a volunteer "ringmaster" to make sure they are relevant and to monitor quality. Starseed doesn't charge anything for a site to join the rings, but sites must meet certain criteria; visitors can access the rings for free. The company has 66,000 separate rings and over 900,000 members; it controls an estimated 99 percent of the ring technology market. Access to GeoCities' corporate might points to an even more exciting future, according to Lanusse. "There's so much more we can do," he says. "This gives us the tools and resources to do that." Today's Business Index Mail Tribune Copyright � The Mail Tribune 1998, Medford, Oregon USA