Contributions To Include $18 million In Cash, Intellectual Property, Media Space, and Other Promotional Considerations Totaling $70 Million

Tesco PLC, Britain’s largest retailer, with Tesco.com, the world’s largest online grocer, and iVillage Inc. (Nasdaq: IVIL – news), operator of iVillage.com: The Women’s Network (http://www.ivillage.com and AOL keyword: ivillage), the leading women’s network online, are to create an international joint venture, iVillage UK (http://www.ivillage.co.uk). The venture is to serve the women’s online market in the United Kingdom and the Republic of Ireland. Women are expected to be 60% of all UK online users by 2005.

iVillage UK will function as an independently managed entity and provide women in the UK and the Republic of Ireland with a highly focused community and an array of interactive, customized online solutions and services including content channels, tools, planners, quizzes, message boards, chats, and newsletters. This move is iVillage’s first international equity relationship, reinforcing the US company’s commitment to the development of a global brand closely tailored to local audiences. The site, scheduled to launch in the fourth quarter of 2000, initially will have eight content channels organized by topic areas most important to women.

“There’s great synergy between our companies and category-leading brands, making this joint venture an ideal investment and strategic initiative for Tesco.com,” said John Browett, CEO, Tesco.com. “iVillage.co.uk will be using iVillage.com’s clear advantage as the best site for women online and Tesco’s reach and knowledge of UK customers. We’re thrilled to leverage this combined brand equity and consumer loyalty to capitalize on the growth of the online women’s market in the UK. Of all the potential Internet partners, iVillage has a clear lead in community-based content. The US site is outstanding.”

“The launch of iVillage UK is the first very exciting step in the globalization of iVillage.com,” said Candice Carpenter, Chief Executive Officer, iVillage Inc. “By partnering with Tesco, we are allying iVillage with Britain’s premier, innovative, highly sophisticated retail company whose network of stores touches more than 50% of the UK population. It’s a natural alliance: iVillage brings best-of-breed content. Tesco.com brings proven e-commerce savvy. As Tesco’s Clubcard magazine also reaches 14 million UK consumers, iVillage UK is very well positioned to quickly build a leadership position through cross-promotional initiatives, further establishing an international footprint for the iVillage.com brand.”

Tesco and iVillage plan to provide a combined total of approximately $70 million in marketing, branding, cash, intellectual property, and other resources in support of the venture through online and offline activities. Tesco will provide $18 million in cash over the next three years, online and offline promotional considerations, and expert knowledge of the deepest and broadest customer relationships in the UK. iVillage will provide the number-one women’s brand online, intellectual property, content, online community know-how, and deep understanding of what women what on the Web. iVillage.co.uk also will promote Tesco.com’s retail business. Revenue will be derived primarily from advertising and sponsorship.

“This venture combines Tesco’s and iVillage’s respective brand strengths as the leading UK retailer and leading destination for women online,” said Carolyn Bradley, COO, Tesco.com. “We’re building value by marrying complementary competencies, skills, and business models – all in the service of establishing and extending a meaningful, lasting relationship with our customers.”

“Our primary goal in creating this company was to choose the right local partner and capitalize on the leadership advantage we have in the US. The joint venture structure balances our commitment to profitability with long-term earnings potential from overseas markets, where forecasts predict continued strong growth,” said Michele Anderson, SVP, Strategic Development, iVillage Inc. “Given that 80% of all purchases in the US are controlled or influenced by women, we believe iVillage.co.uk is in an excellent position to benefit from the trend and provide sponsors a powerful marketing platform for reaching UK women, giving them services and solutions tailored to their lifestyles and preferences.”

About Tesco PLC/Tesco.com

Tesco PLC is the largest food retailer in the UK and Republic of Ireland. Tesco has 646 stores in the UK and 75 in the Republic of Ireland. Tesco had turnover of L20 billion and pretax profit of L955 million in year ending February 2000.

Tesco.com is the world’s largest online grocery site. Annualized sales are running at over L200 million, with 48,000 orders per week. Over 500,000 people have signed up for the grocery service.

About iVillage.com: The Women’s Network

iVillage.com: The Women’s Network (http://www.ivillage.com and AOL keyword: ivillage) is the leading women’s network online providing practical solutions and everyday support for women between the ages of 25 and 54. iVillage.com is organized into branded communities across 16 content channels that focus on issues of most importance to women and provide interactive services, peer support and online access to experts and tailored shopping opportunities. Content channels include allHealth, Astrology, Beauty, Click!: Where Computers Make Sense, Diet & Fitness, Food, Garden, MoneyLife, ParentsPlace, Parent Soup, Pets, Readers & Writers, Relationships, Travel, Work from Home and Working Diva. Established in 1995 and headquartered in New York City, iVillage Inc. (Nasdaq: IVIL – news) is a new media company, recognized as an industry leader in developing innovative sponsorship and commerce relationships that match the desire of marketers to reach women with the needs of iVillage.com members for relevant information and services.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: iVillage Inc. has included in this press release certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning iVillage’s business, operations and financial condition. The words or phrases “can be”, “expects”, “may affect”, “may depend”, “believes”, “estimate”, “project” and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties and iVillage cautions you that any forward-looking information provided by or on behalf of iVillage is not a guarantee of future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond iVillage’s control, in addition to those discussed in iVillage’s other press releases, public filings and statements by iVillage’s management, including (i) the volatile and competitive nature of the Internet industry, (ii) changes in domestic and foreign economic and market conditions, (iii) the effect of federal, state and foreign regulation on iVillage’s business, and (iv) the impact of recent and future acquisitions on iVillage’s business and financial condition. All such forward-looking statements are current only as of the date on which such statements were made. iVillage does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

What Tesco Gets from the Deal

  • As part of the venture agreement, Tesco.com will have anchor positioning on the homepage of iVillage.co.uk, and Tesco’s products and services will be contextually integrated throughout the iVillage network.
  • Tesco.com also will have three anchor tenancies in vertical content areas: Tesco Direct will be the exclusive grocery partner on the Food Channel. Tesco’s Baby & Toddler Store will be promoted throughout the Pregnancy & Baby Channel. Tesco.com will have a permanent presence in the Shopping Channel.

What iVillage Gets from the Deal

  • iVillage.co.uk will receive significant marketing and promotional support from Tesco to drive qualified traffic and brand iVillage.co.uk as the number-one women’s network online in the UK.
  • Online and offline promotions consist of in-store promotions, Tesco mailings, and positioning on Tesco’s Internet service provider (Tesco.net), online shopping site (Tesco.com), and related commerce platforms Tesco.co.uk). iVillage.co.uk will further receive editorial and media space in Tesco publications including Tesco Home, Tesco Baby, and Recipes.
  • iVillage.co.uk content will be syndicated across Tesco’s portfolio of print assets, as well as Tesco.com and Tesco.net.

Joint Venture Details

  • This is a 50/50 joint venture. Over three years, Tesco.com is committed to invest under $20 million in cash, online and offline promotional considerations, and expert knowledge of the deepest and broadest customer relationships in the UK. iVillage will provide no cash, but will provide the number-one women’s brand online, intellectual property, content, online community know-how, and deep understanding of what women want on the Web. Both parties will contribute reciprocal marketing and other support totaling at least $50 million over three years.
  • Both parties expect to reach cash profitability after about three years of operation.
  • The company, which will be headquartered in London, is expected to make an announcement concerning additional key hires in the next few months.
  • The Board of Directors will be formed by three representatives each from iVillage and Tesco and by a jointly elected chairman not affiliated with either company.
  • U.S. founding iVillage employees Hillary Graves and Tory Crimmins are part of the senior management team, and a staff of 16, almost entirely drawn from the UK, has commenced operations in the UK in the editorial, technology, sales, marketing and finance areas.

Background

  • iVillage UK is iVillage’s first step in international expansion, meeting robust demand abroad for the company’s interactive solutions for women.
  • Already, iVillage has a significant market share in the UK, established without the assistance of advertising, promotion, and branding. Currently, approximately 15% of iVillage.com’s traffic originates internationally.
  • With estimates that by the year 2005, women will account for 60% of all online users in the UK, iVillage and Tesco are well-positioned to expand in this market.
  • Since its inception in 1995, iVillage.com has become one of the most trusted brands for women on the Web, currently reaching 8.4 million unique visitors per month.(1)