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The Kelsey Report® Advisory

Switchboard, Viacom Go Their Separate Ways
Charles Laughlin , 8/30/2001

Issue: Restructuring Reflects Changing Focus

News: Switchboard Inc. last week announced it has restructured its relationship with Viacom Inc., owner of CBS Corp. Under the announced agreement, Switchboard has given back $72.5 million in CBS television advertising credits in exchange for Viacom returning its equity in Switchboard, which amounted to 7.5 million shares of common stock and half of the 1.1 million warrants it held in Switchboard. The arrangement allows Switchboard to reduce its total shares outstanding, helping the company improve its quarterly earnings picture, while Viacom is able to sell what was non-cash inventory for real money.

Viacom's share of Switchboard will now be 3 percent, compared with 32 percent before the restructuring. Switchboard's largest shareholder now becomes ePresence Inc., which holds a 29 percent stake.

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