Mergers and Acquisitions
Ripple effect
How Mark Goldston makes United Online greater than thesum of its parts
By Mike Cottrill
Smart Business Los Angeles | September 2008
Page 1 of 4
Mark R. Goldston has written a book and has 13 patents to his
name — including one for the original pump-up sneakers.
Why is that worth mentioning? Beyond its general worth at cocktail parties, that background gives Goldston the confidence and
sense of humor he needs as chairman, president and CEO of
United Online Inc.
And there have been times that he’s needed both. United, a
provider of consumer Internet and media services that spawned
from the coming together of NetZero Inc. and Juno Online
Services Inc., has grown to more than 50 million members across
its brands and posted more than $513 million in revenue in 2007.
But there have been some challenges as the company has been
built up on bringing companies into the United portfolio. Take the
Net Zero-Juno merger in 2001 that originally formed United. The
two rival companies were both hurting and a local media outlet
made an interesting analogy when it panned Goldston, then the
head of NetZero, for the deal.
“They said it’s two skunks trying to breed a mink,” Goldston says,
and that’s where he used a bit of that humor. “And, really, that is
one of the great comments of all time.”
But Goldston also had confidence that he had done his homework.
“The point was nobody bothered to try to understand what vision
had been articulated for the two companies,” he says. “They just
focused on the fact that, at that point, these were two money-losing
companies that had come together to compete in an industry against
a virtual monolith, which was AOL.”
And were those critics a bit off?
“So what happened, ironically, since the companies merged, we’ve
generated almost $700 million in EBITDA,” Goldston says. “In retrospect, you can decide whether or not they were two skunks,
but we definitely bred a mink.”
The results came from Goldston’s basic idea to fully understand
the people at a company during the always awkward time after a
company is acquired. If the people are right for his company, he
can make it work by bringing them together under one rallying cry
and get them walking the same path of accountability.
Recently, United acquired floral and related products provider
FTD Group Inc., increasing United’s head count to roughly 2,200
employees — and starting the integration process all over again.
Here’s Goldston’s outline for how you bring a new company in
and meld it with your people.
