Shockwave.com and Atomfilms to Merge

Shockwave.com (www.shockwave.com) and AtomFilms ( www.atomfilms.com) announced a merger and the creation of a new company. Financial details of the merger were not announced.

Shockwave said it will acquire AtomFilms, in a stock-for-stock deal. After the closing, shareholders of AtomFilms will own 30 percent of the consolidated company. The new company will be headquartered in San Francisco, but will cut about 100 jobs.

Rob Burgess, chairman and CEO of Macromedia and chairman of Shockwave, will become chairman of the new company. Mika Salmi, the founder and CEO of AtomFilms, will be CEO of the new company. Matt Hulett, chief marketing and online officer at AtomFilms, will become president. Current Shockwave CEO, Lawrence Levy, will stay with the company during the transition but will eventually leave.

The companies are a perfect complement to each other," said Salmi, in a press conference. "Atomfilms pioneered the idea of low cost content, and with shockwave.com's built-in traffic, they have lowest cost of acquisition. This is about delivery of the world's best entertainment to mainstream audiences all over world, anytime and anywhere."

AtomFilm's currently has over 1500 short films and animations, while Shockwave has cartoons, games and music, all based on Macromedia's Shockwave software. Burgess admitted that Shockwave won't focus only on content created with Shockwave, but can also take advantage of AtomFilms' videos. "Consumers don't care [what format it's in], they want to be entertained," said Burgess.

Burgess said he wanted to set the record straight on all of Shockwave's celebrity deals. He indicated that celebrities own less than 5 percent of Shockwave, and that there are no fees involved for acquiring talent. Shockwave will continue to these kinds of deals, he said. "AtomFilms has lot of strength in the filmed area, so this is a new form that's quite exciting to them," said Burgess.

The deal is expected to close within the first calendar quarter of 2001.