travel, hotel and booking Information

Active Marketing Suite to be Industrys First Line of Integrated, On-Demand Applications for Digital Marketers

SAN DIEGO, CA (Feb. 8, 2005) WebSideStory, Inc. (NASDAQ: WSSI), a leading provider of on-demand web analytics, today simultaneously announced an agreement to acquire Avivo Corporation, a California corporation doing business as Atomz, and the launch of a new suite of integrated services for online marketing professionals. Based in San Francisco, Ca., Atomz (www.atomz.com) is a leading provider of on-demand digital marketing applications, including site search and web content management.
Active Marketing Suite

Hotel Booking Upon completion of the merger, WebSideStory will combine Atomzs hosted site search and web content management applications with WebSideStorys HBX web analytics service to create the industrys first suite of integrated, on-demand digital marketing applications. WebSideStorys Active Marketing Suite will also include a keyword bid management product, scheduled for release this summer. The Active Marketing Suite will offer a single, shared environment in which businesses can more easily optimize their online performance across multiple marketing channels, while greatly reducing their vendor management costs. The Active Marketing Suite will include:

8mong many firsts for the group market, the new technology platform enables consumers to do something that other sites haven k allowed to book travel and accommodations for more than five rooms in a single online session. Featuring more than 56, 000 hotels, including 7, time group rates, Groople is primed to become the industry largest automated solution for unmanaged group leisure travel, a market estimated at $18 billion to $24 billion. Under its hosted inventory and commission models, Groople generates group bookings niche by niche for hotels and plans to add air, car, cruise, bus and rail later this year.

Travel Agency * HBX Analytics An award winning, on-demand web analytics service that helps enterprises measure their online marketing initiatives from search engine marketing to banner campaigns and improve overall web site return on investment
* Bid An on-demand keyword bid management product that will enable marketers to both manage and measure their pay-per-click keyword campaigns
* Search An on-demand web site search application that empowers marketers to guide and influence site visitors and customers in finding the information and products they need
* Content Manager An on-demand web content management solution that puts the power of creating and updating web content in the hands of marketers

"Groople and Avis Budget Group continue to lead innovation in the industry with the launch of our group rental car product. The rapid growth in booking travel online and the size of the group travel segment is driving demand for group based travel tools, " said Mike Stacy, chief executive officer of Groople. "We have demonstrated our leadership in group hotels, breaking tool for cars, which will make their travel planning and booking much easier."

Cheap Hotel The Active Marketing Suite will have an open architecture accessible through WebSideStorys STREAM APIs (application programming interfaces), which will enable further integration of products, services and data from strategic partners and end users.

Groople (www.groople.com), the leading online group travel booking and planning site, has partnered with Hotel Hotline (www.hotelhotline.com), an online hotel reservation site including the properties HotelHotline.com and HotelsCheap.org. Groople provides Hotel Hotline customers with the ability to search for and book group hotels that are appropriate for their group type. Groople's private label solution offers Hotel Hotline with a customized booking solution that satisfies the needs of their users. "Partnering with Groople gives Hotel Hotline access to dependable group booking technology and professional group travel customer service, " said Mike Stacy, CEO of Groople. "HotelsCheap knows the size and growth of the group market and sees Groople as the best way to tap into that market"

Flight Booking "WebSideStory's acquisition of Atomz makes very good sense in light of this new product suite," said Robert Blumstein, Research Director of CRM Analytics for IDC Research, the premier global market intelligence and advisory firm in the information technology and telecommunications industries. "WebSideStory is taking advantage of its scalable, hosted platform and evolving its solution to a new level in a single stroke. This will present marketers with a broader and more attractive set of choices."

As the premier online booking resource for the $20+ billion leisure group travel market, Groople provides group rates and inventory, allowing consumers to easily plan, book and manage all group travel needs in a single setting. In addition to more than 60, 000 hotels and six major cruise lines, Groople also offers group bookings for air, car, bus and rail.

Travel Agent We have been a longstanding customer of both companies and are very excited by this news, said Jarid Lukin, e-commerce manager for LEGO Shop at Home, one of the worlds best-known toy brands. We have already received great value from the existing integration between WebSideStorys analytics and Atomz site search capabilities, and look forward to taking advantage of a larger suite of services to help us with our broader digital marketing needs.

While there are some below par travel agents out there, sources such as Tripology are great outlets to go to find reliable specialized travel agents that will match your needs. 10. Travel Agents Can Only Book My Flight and Hotel Travel agents can arrange car service, personalized tours and activities, in addition to all the basic travel services they provide. They are also excellent sources of information concerning good restaurants, good sites to see, and tips on what to pack.

Hotel Chicago As the importance and complexity of digital marketing have soared in recent years, our customers have asked us with increasing frequency for an integrated suite of management applications, said Jeff Lunsford, Chairman and CEO of WebSideStory. They have told us the neutrality and real-time nature of our services makes us the ideal launching point for creating a centralized suite of products to manage all of their online marketing initiatives. We are proud to welcome the Atomz team to help us deliver on this unique proposition.

Online Booking The combination of WebSideStory and Atomz is a strategic step in our mission to serve customers with innovative products and superior service, all delivered through the on-demand model, Atomz chairman and CEO Steven R. Kusmer said.

Travel Health Insurance Merger Agreement

Hotel Reservation Under the terms of the agreement, WebSideStory will issue approximately 3.1 million shares of common stock and options to purchase common stock and will pay approximately $4.3 million in cash, in exchange for the outstanding capital stock and options of Atomz. Approximately nineteen percent of the common stock and cash will be held in escrow for a fifteen-month period (with a portion extended to up to twenty-four months) following closing to satisfy possible indemnification claims. Atomz shareholders also have the right to receive an earn-out payment based on achievement of certain revenues by Atomz in the fifteen-month period following the closing. Upon completion of the transaction, Atomz will merge with and into a subsidiary of WebSideStory.

London Hotel Booking The transaction has been unanimously approved by the boards of directors of both companies and is subject to customary closing conditions, including receipt of a determination by the Commissioner of the California Department of Corporations as to the fairness of the transaction and approval of the transaction by the requisite vote of the shareholders of Atomz. Certain shareholders of Atomz have entered into agreements to vote all of their shares in favor of approval and adoption of the merger agreement, and against any competing transaction. No vote of WebSideStory stockholders will be required in connection with the transaction.

Discount Travel WebSideStory expects that the transaction will be accretive in 2005 both to revenue and to pro forma earnings per share, but will reduce GAAP earnings per share.

Orlando Hotel Assuming consummation of the merger on April 1, 2005, WebSideStory expects Atomz to add approximately $7.8 million to its revenue for the last three quarters of the year. WebSideStory also expects pro forma earnings (earnings before stock-based compensation and amortization of intangibles) to increase approximately 3 cents per share, over that same period. If the closing occurs later than April 1st, the positive impact would be lower. Due to two non-cash expenses created by the merger, the company expects the transaction to reduce GAAP earnings per share by approximately 4 cents per share, over the same period. These expected non-cash charges are from estimated stock-based compensation charges of approximately 3 cents per share in 2005 related to the assumption of Atomz stock options and from the estimated amortization of intangibles of approximately 4 cents per share in 2005.

Booking Agency WebSideStory provides this guidance in terms of earnings per share before stock-based compensation and amortization of intangibles, because it believes investors find this presentation useful in that the information concerns the expected operations of the company and not non-cash charges relating to restricted stock and stock options granted prior to the merger at exercise prices below fair market value determined as of the effective date of the merger or amortization of intangibles resulting from the merger. In addition, earnings per share before certain non-cash items such as stock-based compensation and amortization of intangibles is among the indicia that management uses as a basis for measuring past performance and planning and forecasting future periods.

International Travel Medical Conference Call and Webcast Information

New York Hotel WebSideStory will host a conference call and simultaneous webcast to discuss the Atomz acquisition, tomorrow, Wednesday, February 9, 2005, at 5:30 a.m. Pacific Standard Time. To participate in the call, investors should dial (800) 901-5247 (domestic) or (617) 786-4501 (international) 10 minutes prior to the scheduled call. The pass code is 54333598. Additionally, a live audio-only webcast of the call may be accessed via the Internet at www.websidestory.com. An archived version of the webcast will also be available for at least twelve months, beginning two hours after completion of the call, at the same location.

Online Travel Booking About Atomz

Travel Medical Insurance Atomz is a leading provider of on-demand digital marketing applications. Its hosted services include site search and web content management. More than 300 enterprises currently use Atomzs services to manage and improve their web sites. For more information about Atomzs services visit the company's web site at www.atomz.com. Atomz is a trademark of Avivo Corporation.

Miami Hotel Forward-Looking Statements

Air Deccan Booking Statements in this press release that are not a description of historical facts are forward-looking statements. For example, statements about the anticipated synergies of WebSideStorys and Atomzs business, the projected future financial performance of Atomzs and WebSideStorys business, and plans and objectives of management are all forward-looking statements. You should not regard any forward-looking statement as a representation by WebSideStory that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in WebSideStorys business. Such risks include, without limitation, WebSideStorys limited experience in an emerging market with unproven business and technology models, the risk of incurring higher than expected costs associated with integrating the operations of Atomz with those of WebSideStory, WebSideStorys reliance on its web analytics services for the majority of its revenue, the risk that the acquisition of Atomz may not occur or that sales of Atomzs services will not be as high as anticipated, WebSideStorys recent achievement of profitability and the risk that it may not maintain its profitability, the highly competitive markets in which WebSideStory operates that may make it difficult for the company to retain customers, the risk that WebSideStorys customers fail to renew their agreements or that Atomzs customers fail to renew their agreements following the acquisition, the risk that WebSideStorys services may become obsolete in a market with rapidly changing technology and industry standards, and the risk that WebSideStory may incur unanticipated or unknown losses or liabilities if we complete the acquisition of Atomz, as well as the other risks described in WebSideStorys filings with the Securities and Exchange Commission, including WebSideStorys prospectus dated September 27, 2004 and its form 10-Q for the quarter ended September 30, 2004. Do not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. All forward-looking statements are qualified in their entirety by this cautionary statement and WebSideStory undertakes no obligation to revise or update this news release to reflect events or circumstances after the date of this news release.

[ Comment, Edit or Article Submission ]