NeoMedia Technologies Inc. and AirClic Inc., providers of technology that ties print advertising to the web, will form a strategic alliance to combine the strengths of their technologies, the companies announced today. In addition, NeoMedia will take a significant equity position in AirClic. AirClic will make a financial investment in NeoMedia and will lend NeoMedia $1 million within 15 days under a secured note, and an additional $1 million upon completion of the definitive agreements.
The agreement calls for the cross-licensing of patented technology that links print ads to the web through bar codes and scanners.
It also calls for NeoMedia to acquire AirClic's proprietary Connect2 business unit, and consolidate it with NeoMedia’s Qode business unit. Both Connect2 and Qode provide consumers and businesses with the ability to buy, shop, locate, offer promotions or get information on items keyed off the UPC code.
"The Connect2-Qode combination will be the most extensive and flexible bar code-based shopping offering in the U.S.," said Chas Fritz, chairman and CEO of NeoMedia. "Services can be initiated from web-enabled telephones, PDAs and PCs. The number associated with the bar code can simply be entered into the keyboard, or scanned by small bar code scanners connected to phones or small independent devices that scan-and-store for later downloading at the user's convenience."
Under a third component of the relationship, NeoMedia will use AirClic's proprietary symbology systems for bar code applications requiring private coding systems. This includes the Scanlet, a bar code which can be read by consumer grade bar code readers. AirClic says it designed the Scanlet to be small enough to occupy only one line of type, making it more attractive for magazines, newspapers and yellow pages.
NeoMedia will also enter a long term operating agreement to use AirClic's global technology platform and operating infrastructure for the combined Qode and Connect2 businesses.
AirClic is headed by Phillip J. Riese, who previously ran the Consumer Card business at American Express Co. Inc., and Harvey Golub, most recently chairman and CEO of American Express, who serves as AirClic's non-executive chairman. Goldman Sachs has made a substantial investment in AirClic.
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