iVillage Ventures into UK

Women’s online network iVillage, Inc. (Nasdaq: IVIL) announced plans Wednesday to create a 50/50 joint venture with Tesco PLC, Britain’s largest retailer and the operator of Tesco.com, to serve the women’s online market in the United Kingdom and the Republic of Ireland.

iVillage UK, representing iVillage’s first international equity relationship, will function as an independently managed entity and provide women in the UK and the Republic of Ireland with an array of interactive, customized online services, including content channels, tools, planners, quizzes, message boards, chats and newsletters.

The site, scheduled to launch in the fourth quarter of 2000, initially will have eight content channels organized by topic areas the company believes are most important to women.

Tesco To Offer Cash, iVillage Content

Tesco and iVillage plan to provide a combined total of approximately $70 million (US$) in marketing, branding, cash, intellectual property and other resources in support of the venture. As part of the deal, Tesco will provide $18 million in cash over the next three years, as well as online and offline promotional considerations such as in-store promotions and positioning on its ISP and its online shopping site.

iVillage, which has been rated the number-one women’s brand online, will contribute no cash, but will provide intellectual property and content. Tesco and iVillage will contribute reciprocal marketing and other support totaling at least $50 million over three years.

In an interview with the E-Commerce Times, iVillage CEO Candice Carpenter commented, “Conceptually we believe that this brings content and commerce closer to the individual. We bring our strengths to UK women online, a group expected to account for 60 percent of UK online users in the next five years.”

Operations Underway

Under the leadership of two founding iVillage employees, the London-based company has commenced operations in the UK in the editorial, technology, sales, marketing and financial areas with a staff of 16. An announcement concerning additional key hires will be made in the next few months.

Tesco.com is the world’s largest online grocery site, with 48,000 orders per week. Over 500,000 people have signed up for the grocery service.

Established in 1995 and headquartered in New York City, iVillage reported $20.8 million in revenue for the first quarter 2000. Currently, the site reaches 8.4 million unique visitors per month, with 15 percent of its traffic generated internationally.

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