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Zinio Systems merging with Blue Dolphin

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Zinio Systems, a San Francisco-based provider of digital replica software for magazine publishers, is set to make an announcement today that it says will bring the long-promised future of digital publishing closer to reality.

The company will announce that it has merged with Blue Dolphin Group, an online magazine subscription agent. Zinio said that as part of the deal, the company closed a $7 million round of financing with two new investors, North Bridge Venture Partners and Commonwealth Capital.

The combination of Zinio and Blue Dolphin will offer more than 1,300 magazine titles, with hundreds available in both print and digital formats. The merger is designed to further the acceptance of digital replica magazines in general and Zinio in particular. Zinio's initial sales and marketing efforts have focused on gaining wider acceptance from the publishing community.

Allen Weiner, an analyst for Gartner Group, said the move enables Zinio to help publishers sell subscriptions in addition to providing them with digital technology. "This is a product strategy as well as a technology strategy," Weiner said.

The merger with Blue Dolphin is an aggressive move to court magazine readers directly. Although Zinio said it has about 2 million users of its products, that number has not yet reached the critical mass necessary to attract advertisers to the medium despite its rich media possibilities. "It's still to my mind a very limited adoption process so far," said Scott Kauffman, Zinio's president-CEO.

Zinio will also announce today the Zinio Global Network, found at www.global.zinio.com. These online newsstands will offer digital magazines in the language and currency of member countries, including Denmark, Norway, Poland, Spain, Sweden, Taiwan and Thailand.

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