The Boston Globe du lieu suivant : Boston, Massachusetts • 60

D4 THE BOSTON GLOBE WEDNESDAY, DECEMBER 8, 1999 RoweCom to buy NewsEdge in $228m stock deal fastTrack 4 Agreement combines 2 of region's biggest electronic content firms By Ross Kerber GLOBE STAFF Venture capital about 20,000 organizations worldwide, while NewsEdge has about 1,500 corporate customers. RoweCom has offices in Westwood, and in Paris and elsewhere in Europe. Under the terms of the agreement, RoweCom will issue 0.26 shares of its stock for each of the 17.4 million shares outstanding in NewsEdge. RoweCom shares rose to close at 50 in Nasdaq trading yesterday, valuing the total agreement at $227.9 million, or 7 percent more than NewsEdge's value before the deal was announced. The deal still requires federal and shareholder approvals, including that of NewsEdge's largest shareholder, Regan Partners LP in New York, which holds about 25 percent of the stock.

The agreement also includes a breakup fee of $6 million that either side would have to pay were it to back out of the deal. Late yesterday McLagan said he knew of no other offers. RoweCom was founded in 1994 by Rowe, who formerly was chief executive of Westwood-based Faxon a large subscription agency for libraries. He was also associate dean of Harvard's Graduate School of Education. After its initial public stock offering in March, RoweCom shares rose to nearly $50 apiece in April, then fell below $20 as investors worried the company was chiefly a sales vehicle.

Shares recovered as Rowe made the case that its subscription services would lead to other business opportunities, said Michael Hughes, an analyst at the J.C. Bradford Co. investment bank in Nashville who follows the company. Hughes also noted RoweCom's latest transaction will bring it about 80 salespeople now working for NewsEdge. NewsEdge's Individual unit now has 43 employees overseen by Ilene Lang, previously head of the AltaVista search engine when it was owned by Digital Equipment Corp.

In an interview yesterday, Lang said the unit had revenue of about $4 million from advertising and e-commerce services last year and expects about the same this year. But its user base has grown to about 12 million as of October, up from 327,000 users in May, she said; the service hopes to reach about 7 million users by 2001. Shares in NewsEdge fell Vt to close at 12 in Nasdaq trading yesterday. profitable, but RoweCom is growing quickly as a sort of corporate Amazon.com, selling all sorts of information products on line, ranging from consultant reports to books. Before the NewsEdge acquisition RoweCom had expected revenue of about $305 million this year and $622 million next year, up from $19 million in 1998.

Counting the NewsEdge merger, RoweCom revenue now should be about $703 million next year, said Jeffrey Sands, RoweCom's chief financial officer. RoweCom has about 725 employees, while NewsEdge has about 400. No layoffs are expected because of the merger, the companies said. NewsEdge president Cliff Pollan will remain as head of the unit, which will maintain separate operations. McLagan said he plans to leave the company after the merger is completed, in February or so.

NewsEdge was formed last year when Desktop Data Inc. purchased Individual Inc. Individual still operates as a unit of NewsEdge, but it and RoweCom said they will consider the sale of "a significant portion" of Individual's services, aimed at consumer rather than business customers. RoweCom manages subscriptions for In an agreement that combines two of New England's largest electronic content companies, RoweCom Inc. said it plans to buy Burlinton-based NewsEdge Corp.

for about $228 million in stock. Cambridge-based RoweCom sells subscriptions to magazines and electronic journals for organizations ranging from Intel Corp. to the CIA. NewsEdge builds filtering software that sifts through vast electronic databases and newswires for stories of interest to send to specific users. The deal would give RoweCom access to that software, which the company hopes would boost demand for other material RoweCom delivers via sites on the World Wide Web, said chief executive Richard Rowe.

"We've got to give people a reason for going there every day," he said. NewsEdge chief executive Don McLa-gan said the companies first discussed a content alliance, but decided a purchase would help NewsEdge fund a faster expansion. "It was like their strategic plan and ours were made on the same copier," said McLagan, who owns about 12 percent of NewsEdge's shares. Neither RoweCom nor NewsEdge is Taylor resigns as Globe chairman; Oilman elected to replace him flifrlington, Waltham srt-ups draw millions Eiit venture capital and investment companies fcave put $40 million into SupplierMarket Waltham, an on-line trading exchange for Jidustrial supplies and one of several young copijjanies moving into business-to-business Interact commerce. JupplierMarketcom's cofounder and chief active, Jon Burgstone, a former Ford Motor CJpurchasing professional, said more than manufacturers interested in using the exchange were listed during the Web site's first fiJfrweeks of operation.

jJfiupplierMarketcom's market focus is on industrial equipment, parts, and supplies, from tools to nails and screws. Its latest investment round was led by Fenway Partners arita group of executives at Kohlberg Kravis Separately, PurchasingCenter.com of another business-to-business e-commerce venture targeting the industrial market, stfcwed $3 million in a second round of venture cajltel funding to finance its expansion plans. TurchasingCenter.com's investor syndicate injfttcles Comdisco Ventures, Bessemer Ven-ftij Partners, and Charles River Ventures. Other Boston-area start-ups that have announced financing deals in recent weeks incite: I Mainspring Communications Inc. of Cam-biijge, a consulting company specializing in elfcetronic commerce development, has received $325 million in second-round funding from a syndicate led by Crosslink Capital.

Mainspring pfeui to open several new sales offices and add mufacturing and technology clients. Sterling Network Group of Quincy, a fixiji-price consulting firm specializing in tele-cijjipunications and data transmission, won $7 million in a first-round venture capital invest-mehl from First Union Capital Partners of CJiaflotte, N.C. With the investment came a chAige in name to Belenos Inc. Cable -rjj aChange offers interactive system SeChange International Inc. of Maynard, wjricji makes devices used by cable television operators to insert local ads into national cable programs, will begin offering interactive com-njurfcation with viewers as an optioa The system, made by Wink Communications Inc.

of Alameda, lets viewers use remote controls to respond to on-screen text messages. Advertisers can then contact them directly. Small business ffK Help Center sets P-hour schedule fc 1 i 1 ttt a1. Five months after he was removed as The Boston Globe's publisher, Benjamin B. Taylor resigned yesterday as chairman of the newspaper's board, his only remaining Globe post After the board accepted Taylor's resignation, it elected Richard H.

Gilman, who succeeded him in July as publisher, as its new chairman. Gilman disclosed Taylor's resignation, effective Jan. 13, in a memorandum to the newspaper's employees. In accepting Taylor's resignation, the board of the Globe Newspaper Co. passed a resolution expressing its "deep appreciation" for his service to the newspaper.

The resolution continued: "As a distinguished reporter and editor and as an inspiring publisher noted for his integrity, high standards, and personal warmth, Ben Taylor contributed greatly to the Globe's improvement and quality during the three decades of his unwavering dedication to the newspaper." The New York Times Co. named Gilman, then its senior vice president of operations, as Globe publisher July 12. The surprise move ended 126 years of Taylor family leadership of the Globe. The change, six years after the Times bought the Globe, came at a time of declining Globe circulation and slowing advertising revenue. only reason given was "differences in approaches to management." In a personal note, Gilman said he was "grateful to Ben for his professionalism, graciousness, and respect during the transition period over the summer.

My hope is that together we can build upon what Ben has helped create, to continue a legacy that has great meaning to Boston, New England, and the world of journalism." GLOBE STAFF An Otis elevator with eDisplay, which will provide news, sports, weather, and traffic updates among its information services. Otis to offer Internet access in elevators US Department of Commerce's Y2K Help will be added to new Otis elevators and will be available as an upgrade for older ones. The eDisplay opens a potential new advertising channel and Otis and Next Generation are talking with advertisers. BLOOMBERG NEWS FARMINGTON, Conn. United Technologies Otis Elevator the world's largest maker of elevators and escalators, said it has entered an agreement to provide Internet access in elevators for the first time.

Farmington, Otis agreed to work with International Business Machines Corp. and Next Generation Net-1 work to create eDisplay, a flat-panel screen featuring Internet-based information that changes every few seconds. The service for Small Businesses will be open 24 a day beginning Friday, Dec. 30, and through Friday, Jan. 7.

Until Dec. 29, Renter will be open from 8 am to 8 pjn. (Eastern' time). The telephone number is 1-800-925-7557. J.

About one-quarter of the estimated 5 mil-lieg small businesses in the United States have dfak nothing to detect and correct Y2K compiler problems, according to a poll by the Na-tifrial Federation of Independent Businesses Ideational Foundation. A poll last spring by the foundation produced an estimate that about 850,000 small briefnesses would not be ready for the calendar rojover but that another 600,000 planned to act du ring the summer. The foundation said a fol-lftwup poll in November indicated almost none of plat latter group did so. The government-run Y2K Help Center offers advice and free software tools for finding aftd correcting some of the potential problems. Sj)n)e of that software can be downloaded from aj'eb site, www.y2khelp.nistgov.

tr JERRY ACKERMAN ILM BUFFS MAY VAGUELY RECALL "Fantastic Voyage," a 1966 sci-fi movie involving a team of intrepid doctors who were magically miniaturized and injected into the bloodstream of a critically ill diplomat to con INNOVATION Charles Piller Tiny chips, big revolution Processors size of molecules could redefine computerization Z4 Dateline New England Women Business Owners, din- Molecular-scale chips would make up for that lack of specialized design with virtually unlimited raw computing power. To be sure, scientists have taken only the first steps. They still must learn how to link millions or billions of such circuits into workable devices and manufacture them on a mass scale. Such advances could lead to video players that store 10 feature films in the space of a credit card. If that example sounds strange (who would want to view a movie on a credit it's because the future devices based on molecular-scale circuitry would basically render our conventional ideas about computing obsolete.

But what would people do with such tiny, powerful computers? "Fantastic Voyage" offers one hint. Phil Keukes, a pioneer in molecular-scale computing at Hewlett-Packard Labs in Palo Alto, says this technology could create miniature diagnostics that could be shot into the bloodstream and determine, say, what strain of a disease a patient has, then monitor the progress of treatment and feed back a constant stream of data to doctors or shoot mi-crodoses of drugs directly into diseased cells. Mark Weiser, the late chief scientist of the Xerox Palo Alto Research Center, imagined a world where "smart paint" containing millions of micromachines could be used to spread stereo speakers on your walls. He envisioned a "smart toner" that would reorganize itself limitlessly on a single sheet of paper, creating a book that could be folded into a shirt pocket Of course, it's hard to foresee what will be done with such tiny and powerful machines. "If we can truly make this kind of technology manufac-turable well have computing that's cheap enough to throw away," said Mark Reed, a Yale engineering professor and coauthor of the recent study in Science.

"If you can buy the guts cf a computer for 1 cent how would that change your life?" Molecular-scale processors "are going to revolutionize something," Reed said. "But we don't know what that something is yet" Distribute by Los Augeles Times Sytidtcpte. duct lifesaving microsurgery. The movie made more of an impression for its depiction of antibodies giving a jumpsuit-clad Raquel Welch a crushing squeeze (having mistaken her for an invading bacterium), than for its technical prescience. But a study by scientists at Yale and Rice universities, recently published in Science magazine, suggests that the movie may have been on to something after all.

The researchers built a simple electrical circuit that can be switched on and off using the same binary method of managing digital data used in today's microprocessors, the brains of all electronic devices. But their circuit had a profound difference. It was built on a molecular scale and was thousands of times smaller than the already microscopic circuits found in typical silicon chips. If molecular-scale processors are perfected, within a decade they could force us to rethink all of our assumptions about the role of computing in everyday life. Molecular computers would offer the possibility of ubiquitous supercomputing they would be so small that they could be woven into the threads of your shirt, using your body heat or ambient light for power.

To understand why this could alter the face of computing, consider the daunting challenges now facing makers of traditional silicon-based microprocessors: For more than three decades, the chip industry has advanced in accordance with "Moore's Law" the brainchild of Intel co-founder Gordon Moore. Moore said in 1965 that chips' performance, and hence computing power, would double roughly every 18 months. Moore's Law has proved remarkably accurate. Breakthroughs have cropped up with amazing regularity. An example is the announcement last week by University of California at Berkeley researchers that they had developed a transistor some 400 times smaller than today's versions.

BuLeven if manufacturers keep overcoming Uyhnology I imer meeting: Networking, Shopping and 3lors d'Oeuvres. 5:45 p.m. today, Sheraton Needham Hotel $35 members, $40 guests. I -Reservations, information, 617-566-3013. MIT Enterprise Forum, speaker, Gururaj I Desh" Deshpande, Sycamore Networks inc.

Presentation, Samuel Golan, Neteos Inc. 16 pjn. today, Room 10-250, Massachusetts Institute of Technology, 77 Massachusetts tAve, Cambridge. $10 members, $15 non-tmembers. Information, 617-253240.

Worcester Polytechnic Institute Venture Fonim, E-commerce: Turning Bricks to "Clicks, speaker Misha Katz, Furniture.com. tPesentation: Marc Lind, PartsDriver.com. pjn. Tuesday, Salisbury Labs, WPI -Campus, Worcester. $5 members, $10 non-tmembers.

Information, 508-831-5075 or Jwww.wpiventureforum.org. Cambridge Business Development Council, I "Breakfast with the Stars series. Speaker JEric Giler, Brooktrout Technology. 7:15 ajn. Dec 15, Massachusetts Institute of Technology Faculty Club, 50 Memo-Jrial Cambridge.

$10. Open to CEOs, 'presidents, and founders of high-tech -nanies. Registratinn. 617-349-1690. barriers and keep circuitry shrinking while performance increases, their efforts could be rendered impractical by Moore's second law: As chip circuits shrink, the cost of the fabrication plants to build those chips rises dramatically.

Today, at several billion dollars apiece, only a handful of companies can afford to build a new chip "fab." By some estimates, the cost of a new plant could hit $50 billion a decade from now. That could make profitable production unfeasible even for Intel the world's dominant supplier. Though each new generation of microprocessor has offered a performance improvement of 10 percent to 100 percent, the molecular-scale chips suggest there could be a leap in computing power by a factor of millions or even billions. Perhaps more important, many researchers believe molecular circuits can be produced at a tiny fraction of the cost of today's vastly complex technology used to create silicon-based chips. That's because the circuits built by the Yale-Rice team (as well as those created by Hewlett-Packard with UCLA chemist James Heath) use a purely chemical, or "self-assembly," process, similar to growing a crystal.

Chemical production could create generic chips that would be many times less complex than today's processors..