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Allen pumps $100 million into Oxygen for 12% stake.

CHICAGO Billionaire Paul Allen has agreed to invest $100 million in Geraldine Laybourne's Oxygen Media in exchange for a roughly 12% stake in the fledgling company.

Allen, who made the investment through his Vulcan Ventures, has also agreed to launch the female-targeted Oxygen Channel on his Charter cable company.

Charter has 2.3 million subscribers, but the cabler has cut deals that will bring its customer count up to 5.9 million. Oxygen will eventually gain all of Charter's subscribers.

William Savoy, president of Vulcan Ventures, said Oxygen's strategy of linking its Web sites to its cable channel jibes with Vulcan's convergence strategy.

Oxygen's Charter deal, combined with previous affiliation agreements with cablers AT&T and Media0ne, will give the cable channel 5 million subscribers when it launches on Feb. 2, Laybourne said.

The Oxygen founder added that she expects to reach additional affiliate deals that will bring Oxygen a total of 10 million subscribers at launch.

Oxygen filling up

Allen's investment pushes Oxygen's value close to $1 billion.

With Allen's $100 million, Laybourne said that Oxygen now has sufficient capital for "this stage in our development."

Though Laybourne has been said to be considering doing an initial public offering to take advantage of the very high valuations currently placed on Internet sites--of which Oxygen owns several--Laybourne said she will not take her company public in the next 12 to 18 months.

Adding to the value of the net last week was the announcement that Candice Bergen will host a four-nights-a-week talker, called "Exhale," when Oxygen launches Feb. 2.

The one male partner in the startup web, Tom Werner, who was in Chicago for the National Cable Television Assn.'s Cable '99 meeting where "Exhale" was being touted, said they lured Bergen back to TV with the idea of the show.

Werner said that it was Oxygen's strategy to have "a 10 p.m., weeknight show (Monday-Thursday), also one hour, or more if needed, whereby an audience can lean back in an intimate, living-room like setting with varied guests, from scientists, authors, etc., in in-depth conversations."

Army Archerd contributed to this report

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Author:Katz, Richard
Date:Jun 21, 1999
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