BigStar Sells Direct Marketing Spin-off

On the verge of being delisted from the NASDAQ exchange, online video and DVD retailer BigStar Entertainment Inc. has sold its direct marketing spin-off Advaya to Expression Engines.

Expression Engines, another Silicon Alley play in the email marketing space, said it purchased the Advaya technology to ramp up its offerings. Financial terms of the transaction were not released. Advaya’s eight software engineers will join Expression Engines through the deal.

With its stock trading at less than a dime and a hearing on a possible delisting from the NASDAQ exchange scheduled for January 11, BigStar said the sale was in keeping with an earlier decision to retain BNY Capital Markets as a financial advisor to assist in evaluating strategic opportunities, including the possible sale of assets.

The online entertainment company launched Advaya in April last year with a bold plan to tap into the B2B marketplace. BigStar had hoped to offer clients the ability to manage their subscriber databases, build, schedule, test, send and analyze targeted messages to their users.

However, the direct marketing division never quite took off and as Wall Street continued to hammer e-commerce Web companies, BigStar was forced to divest itself of its money-losing properties. At the end of the third quarter of 2000, Advaya generated $87,000 in revenues and the company’s net losses reached $3 million for the quarter.

BigStar shares took another plunge in Tuesday’s early going, trading 25 percent down at $0.09, well off the 52-week high of $8.25. The year-low is $0.06 per share.

Al DiGuido, Expression Engines’ chief executive, said he was convinced the Advaya technology would assist his company’s drive towards profitability.

“The Advaya technology is a state-of-the art sending platform and we feel we’re going to be strong in this marketplace with this purchase. It is a smart buy for us,” DiGuido told internet advertising report‘s sister publication atNewYork.

Expression Engines will “incorporate the platform into our existing interactive marketing and consulting services,” he added.

Ryan Naraine is an assistant editor at atNewYork.com, an internet.com property.

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