Part of Women.com Consolidation

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CINCINNATI (AdAge.com) -- IVillage has bought majority control of its Substance.com beauty care channel joint venture with Unilever. Both sides described the
move as an effort to simplify the portal's financial operations as it prepares to consolidate iVillage's acquisition of women.com, announced in February.

IVillage purchased an additional 30% of Substance.com, which had been a 50-50 joint venture with the consumer-products giant, for $1.5 million in cash, according to an executive familiar with the matter. The transaction values Substance at $5 million overall -- just 2.5% of the $200 million value the two sides placed on the venture when it was announced in February 2000. At the time, both sides acknowledged that little cash was being invested.

Plummeting stock value
The substantially lower valuation is in line with the rapidly shrinking market caps of many online media companies. IVillage's stock price has skidded more than 96% since the deal was announced, closing March 29 at 63 cents a share and leaving

the portal's overall market capitalization at $19.5 million.

An iVillage spokesman would not comment on terms of the deal but said it was considered "immaterial" financially. Most staff, including Unilever executives who joined Substance, will remain, though one senior manager is returning to Unilever.

Substance is expected to launch as early as this week as a revamped and upgraded version of iVillage's beauty channel, a form under which the venture has operated for more than a year. The revamped site is expected to offer advice and utilities aimed at helping women find "solutions" to their beauty care needs as well as links to e-tailers.

"This is a change in the nature of the relationship, not the intent," said a Unilever spokesman. "They're trying to consolidate their own business. It's exactly the right thing for them to do."

The move wasn't prompted by advertiser concerns about Unilever's role in the venture following the women.com acquisition, the iVillage spokesman said.

Rival Procter & Gamble
Unilever arch rival Procter & Gamble Co. has a partnership of its own with women.com, running its "Beautiful You" beauty care mini-site off of the women-oriented portal in a venture that includes development of consumer databases for e-mail newsletters and other marketing programs.

Still, the iVillage spokesman said Unilever rivals such as P&G and Bristol-Myers Squibb Co.'s Clairol brand have been among the biggest advertisers on its existing beauty channel.

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