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"The addition of Launch's enormous music video collection and Internet radio service to Yahoo's existing entertainment offerings will create even more compelling opportunities for online music fans, established and new artists, and advertisers."
——David Goldberg, Launch co-founder/CEO

IT’S LAUNCH TIME FOR YAHOO

Web Portal Buys Launch; Launch Settles With UMG; No Launch Until You Clean Your Room
Popular web portal Yahoo today announced it has agreed to acquire Launch Media. The savvy hitsdailydouble reader might recall seeing this news in our rumor mill just two days ago.

Under the terms of the merger agreement, through a subsidiary, Yahoo will commence a cash tender offer to acquire all of Launch 's outstanding shares at a price of 92 cents per share—a total of approximately $12 million. The acquisition is expected to be completed in the third quarter of 2001.

In connection with the tender offer, Yahoo has extended a $3 million dollar short-term secured debt financing to Launch in addition to the previous $2 million extended to Launch in May 2001 on a secured basis. Launch's board of directors has unanimously approved both the tender offer and merger transaction.

Launch will continue to be based in Santa Monica following the completion of the acquisition, and Launch co-founders, CEO David Goldberg and President Bob Roback, will remain with the company.

Yahoo hopes Launch's services will be a complement to the company’s current entertainment offerings, which include Yahoo Music, Yahoo Broadcast and Yahoo Radio. The company has no ties to Australia’s answer to Pauly Shore, Yahoo Serious.

"As entertainment becomes an increasingly important focus for Yahoo, we are committed to delivering the best online entertainment experience available on the Web to our 192 million consumers. The acquisition of Launch is evidence of this commitment," said Yahoo Senior VP, Entertainment and Small Business, Ellen Siminoff. "Launch Media possesses a large audience, a seasoned team of music industry veterans and the broadest array of music and music-related content available on the Web today. These strong core assets will enhance Yahoo's current entertainment offerings and strengthen our leadership position in this space."

"We believe this transaction is in the best interests of our stockholders," said Goldberg. "The addition of Launch's enormous music video collection and Internet radio service to Yahoo's existing entertainment offerings will create even more compelling opportunities for online music fans, established and new artists, and advertisers."

In a separate announcement today, Launch announced that it has settled the copyright infringement suit brought by Universal Music Group and other major record labels in connection with Launch's Internet radio service, LaunchCast. In addition to a payment by Launch for past performances, Launch has entered into a non-exclusive license with UMG for use of UMG-controlled recordings in LaunchCast.

Launch is also restructuring its relationship with the Vans Warped Tour. The company will continue to operate and control the 2001 tour. But though Launch will retain the exclusive right to sell sponsorships for the 2002 and 2003 tours, it will not operate those tours.

The restructured agreement frees Launch of the responsibility for certain potential payments with the other tour participants in the approximate amount of $20.5 million.

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