Go2Net and Vulcan Ventures Pop $20 Million Into E-Mail Provider, CommTouch

When Go2Net, Inc. announced last month that Microsoft (Nasdaq: MSFT) co-founder Paul Allen and his venture capital firm, Vulcan Ventures, had purchased an aggregate $426 million (US$) of Go2Net stock since last March, it didn't take a genius to figure out that the company would go on a shop 'til you drop excursion.

Still shopping and obviously not dropping, Go2Net announced Wednesday that it, along with Vulcan Ventures, would invest a total of $20 million (US$) cash in CommTouch Software, Ltd., a global provider of partner-branded e-mail services.

The investment is contingent upon the closing of CommTouch's initial public offering, which the company filed for with the SEC in May.

In exchange for the cash, CommTouch will develop enhanced e-mail and related services for the Go2Net network of technology and community-driven sites and its affiliated partners. Go2Net will also receive one seat on CommTouch's board of directors as soon as permitted by securities law.

"There are clearly powerful synergies among Go2Net, Vulcan Ventures and CommTouch, and we're anxious to not only execute on the immediate opportunities ahead, but to explore and evaluate longer-term areas of promise in our sector," said CommTouch CEO, Gideon Mantel.

Another Notch In The Belt

CommTouch, based in Santa Clara, California, also has R&D facilities in Israel. The company has its e-mail services linked to approximately 70,000 Web sites, including Excite International, ZDNet, Talk City, Discovery Channel Online, LookSmart and Business Week magazine.

This move represents the latest in Go2Net's expansion drive. Last week, Go2Net announced that it was buying Authorize.Net, an e-commerce payment authorization service, for $90 million in stock and cash. In May, the company bought financial analysis and real time charting service IQC.com for $20 million in stock. Other Go2Net acquisitions in the last year include Haggle Online, Virtual Avenue, Silicon Investor and HyperMart.

CEO Russell Horowitz hasn't disguised the fact that the company is looking to expand, though a clear pattern of Go2Net's acquisition strategy has yet to emerge. Obviously, the company is looking for the best investments possible. Given Mr. Allen's track record, it's quite likely that there will be more hits than misses.