TheStreet.com Gets $7.5 Million Cash Investment From Vulcan, Go2Net

Updated from 8:49 a.m. EDT

TheStreet.com Inc. (TSCM Quote) sold a 5% stake to Paul Allen's Vulcan Ventures and Web-site operator Go2Net (GNET Quote) for $7.5 million in cash, the companies announced Tuesday.

Vulcan and Go2Net each also took an option to buy an added 7.45% of TheStreet.com stock within six months at "a substantial premium to yesterday's closing price," TheStreet.com said. Shares of TheStreet.com, publisher of this Web site, closed Tuesday up 1 1/32, or 21%, at 6 1/6.

As part of the deal, TheStreet.com licensed Go2Net's proprietary message board technology platform, giving subscribers to its paid RealMoney.com site "the ability to post and view messages in a private-label environment." Under the licensing deal, users of TheStreet.com's main free site will be able to view message boards using Go2Net's technology platform, which also powers Go2Net's Silicon Investor discussion boards.

Thomas J. Clarke, CEO of TheStreet.com, called the deal "a vote of confidence in our financial strength, our brand and our new business model." TheStreet.com recently made its core site free and launched a number of other subscription-based sites, including TheStreetPros.com and IPOPros.com.

TheStreet.com last month reported a second-quarter loss of 52 cents a diluted share, putting it ahead of Wall Street's expectations for a 55-cent loss. At June 30, the publisher of financial news and commentary said it had more than $90 million in cash on hand.

Billionaire Paul Allen, with Bill Gates a co-founder of Microsoft (MSFT Quote), founded Vulcan in 1986 to make investments in technology companies. Go2Net, which Vulcan recently took a stake in, last month set a $4 billion merger with Internet software-services firm InfoSpace (INSP Quote).