Santa Clara, Calif. Fueled by a fresh infusion of private capital, Web services start-up USWeb Corp. has gone on a spending spree, purchasing some of its top-performing affiliates. Founder and CEO Joe Firmage said the acquisitions kick off the second phase of USWeb's business strategy, focusing on revenue growth and acquiring an increased share of the Internet and intranet services outsourcing market. Forrester Research, Inc. has estimated the Internet outsourcing market alone will reach $10.4 billion by the year 2000. 'My objective is to have a 10% market share over the next five years,' Firmage said. Launched in March 1996, USWeb has built a nationwide network of affiliates, or franchises, by signing up existing Web consulting, development and hosting companies. These affiliates offer Internet- and intranet-related professional services, such as Web site design, content development and database integration. The affiliates also give 7% of their gross revenue to USWeb, receiving in return marketing and technology support as well as reduced operational costs. USWeb is snapping up affiliates in New York, San Francisco and Orange County, Calif., Philadelphia, Milwaukee and Washington, D.C. The buyouts were made possible by a recent $18 million to $20 million private capital deal, Firmage said. USWeb raised $30 million in its first round of financing in March 1996. He said the acquisitions will provide USWeb with the working capital and liquidity necessary to meet the company's goal of having between 200 and 250 offices worldwide by the year 2000. Currently, USWeb has 54 offices nationwide. The first phase of the company's strategy was building brand awareness. Firmage said that this brand awareness has been achieved, pointing to a USWeb-commissioned study showing the company trails only AT&T and MCI Communications Corp. in name recognition for Web professional services. Ironically, those companies do not compete with USWeb, he said. 'Our real competition in the long term is [Electronic Data Systems Corp.] and Andersen Consulting.' Firmage said his goal is for USWeb to 'become the Andersen Consulting of the Internet space in a few years instead of a few decades.' A former vice president of strategic planning for Novell, Inc.'s NetWare products division, Firmage started USWeb with two former Novell executives, Toby Corey and Sheldon Laube.
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