HomeArts, iVillage heading for a merger?

Summary:In a long-rumored deal, iVillage, which specializes in content for women, is close to a merger with Hearst Corp.'s HomeArts, which also appeals to female Web users.

In a long-rumored deal, iVillage, which specializes in content for women, is close to a merger with Hearst Corp.'s HomeArts, which also appeals to female Web users.

According to sources close to iVillage, the unusual deal would involve a pooling of resources, in which HomeArts' brand names would add strength and luster to those created by the fledgling iVillage.

Both entities are losing money.

On its home page, HomeArts boasts content from Good Housekeeping, Redbook, Cosmopolitan, Town & Country, Country Living and a host of other Hearst magazines. iVillage, started in 1995, has created its own brands, with names including Parent Soup and Better Health.

iVillage spokesman Jason Stell confirmed the talks, albeit indirectly. "I can confirm that we're in talks with a number of media companies," he said, offering no further information.

Management shuffle
iVillage is also said to have talked recently with CBS, which has gone through a recent upheaval, with the departure of Dean Daniels, vice president and general manager of CBS New Media.

A source said that the Hearst deal, which has been germinating for several months, would involve Kathryn Creech, currently general manager of HomeArts, taking a board seat at iVillage, which plans an IPO next year.

Sources said also that Candice Carpenter, CEO of iVillage, would lead the combined entities, and that the deal would be structured much like those CBS has with CBS Sportsline and CBS Marketwatch. In those deals, the Internet companies gave up equity in exchange for media promotion. In this deal, Hearst would be able to reduce its HomeArts overhead, and reap the benefit of an IPO.

Insiders at iVillage say that co-founder Nancy Evans has been absent from key sales meetings in recent days, with rumors abounding she might leave the company. Evans did not return a phone call to her Manhattan apartment.

No comment
A Hearst spokesperson said the company doesn't comment on rumors.

iVillage has attracted interest partly because of current demographic facts. America Online, which has itself invested in iVillage, said at the recent Jupiter Advertising conference that 52 percent of its users were women.

According to Jupiter Communications, women will spend $3.5 billion online by the year 2000. And one market researcher predicts women will make up 51 percent of all Web users by the year 2002.

Topics: Start-Ups

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