Solid Cactus Inc., a firm founded by online retailers with a specialty in developing e-commerce sites on the Yahoo Store platform, will now operate as a unit of Web.com Group Inc., a provider of web site design and online marketing services. Terms of the acquisition were not disclosed.
"The acquisition of Solid Cactus demonstrates our commitment to providing small and medium-sized businesses with a broad range of online marketing solutions and e-commerce expertise to help them convert web site traffic to sales," says David Brown, chairman and CEO of Jacksonville, FL-based Web.com.
Solid Cactus will continue to operate under its own name as a separate brand of Web.com and retain its offices in Shavertown and Wilkes-Barre, PA. Senior Solid Cactus executives, including co-founder and president Scott Sanfilippo, and co-founder and vice president/general manager Joe Palko, will remain with the company, a Web.com spokeswoman says.
"Joining Web.com provides Solid Cactus with the resources to enhance our specialized e-commerce and online marketing product offerings," Sanfilippo says. "We look forward to working with our new colleagues at Web.com in expanding our presence in the e-commerce market. Solid Cactus has been an innovator, and we’re going to continue to put out new products, features and services to our customers, and with the Web.com customer base we now have a larger group which we can market to.”
Brown adds that Solid Cactus’ e-commerce site-building capabilities and suite of software applications complement Web.com’s 1ShoppingCart.com e-commerce platform. “Solid Cactus will be a significant part of our strategy to grow in the e-commerce area,” the spokeswoman says.
Web.com says its primary offerings until now have been its eWorks! XL and SmartClicks performance-based packages that include web site design and publishing, online marketing, search engine optimization, e-mail marketing, and web analytics. The company has more than 265,000 subscribers to these services, Web.com says.
Clients of Solid Cactus include online retailers SAK World Paintball, Kaleidoscopes to You and Fun Dog Fred. Web.com’s clients include online retailers PurseSnickety.com and DiBona Designs.
Web.com has agreed to grant the 125 employees of Solid Cactus options to purchase an aggregate of 146,900 shares of Web.com’s common stock. The options, offered under the same program available to all Web.com employees, have a ten-year term and an exercise price equal to the closing price on the date of grant. The company’s stock was trading today at about $4, up about 7% from yesterday.
Web.com reported revenue of $122.5 million for the year ended Dec. 31, 2008, up 48% from $82.5 million in 2007. It reported a net loss for 2008 of $96.21 million, compared to year-earlier net income of $1.36 million. Web.com reported an operating loss for 2008 of $96.91 million, but noted that it had non-GAAP operating income of $1.5 million. Non-GAAP operating income did not include a one-time accounting charge of $103 million.
The acquisition of Solid Cactus does not include Solid Cactus’ sister company Neeps Inc., which operates the Neeps.com retail site for products including lawn and garden supplies. Solid Cactus grew out of an earlier online retailing operation founded by Sanfilippo and Palko, TheFerretStore.com, which served as the base for several pet supplies sites. In 2007, TheFerretStore.com and its sister sites were sold to Drs. Foster and Smith Inc., which operates DrsFosterSmith.com, No. 91 in the Internet Retailer Top 500 Guide.
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