United Online Brings Unity

Why fight when they are going to be one company? NetZero and Juno, soon to merge into United Online, stopped patent infringement suits over technology that displays third-party ads on floating ad banners.

by Ryan Naraine of atnewyork.com [June 22, 2001]

Merging free-ISPs Juno Online Services and NetZero, Inc. plan to cancel patent infringement litigation that fueled a bitter rivalry between them.

atNewYork has learned that the patent infringement suits over technology that displays third-party ads on floating ad banners would be stayed and then scrapped once the $70.7 million merger gets regulatory approval.

The last twist in the legal storm between the New York-based Juno and NetZero came in April when a California federal judge lifted a temporary restraining order that blocked Juno from using the floating ad banner technology.

Once the merger closes, a Juno spokesman said the combined United Online would scrap the legal fight and merge the two technologies.

Meanwhile, with NetZero taking a 61.5 percent stake in the United Online entity, Juno's 257 employees are bracing for an expected round of job cuts that could happen as early as next month.

A company spokesman declined to speculate on the extent of the expected consolidation, saying it was "way too early" to predict who would be affected.

"We're expecting consolidation. Clearly the two companies are to some extent a mirror image of each other. There are duplicate functions in a lot of areas and, in those cases, those people will not be needed."

Of the 257 employees on Juno's payroll, approximately 100 work out of a customer service location in Hyderabad, India. That office would likely be untouched but obvious overlap in the sales, marketing, and technology departments could lead to deep cuts on the Juno side.

The merger, announced earlier this month, calls for all outstanding shares of both companies to be exchanged for shares of United Online. NetZero stockholders would own about 61.5 percent of United Online's common stock, and Juno stockholders would own the balance of 38.5 percent.

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