Hotel Online Press Releases 

Lodgenet Acquires Connect Group
Delivers High - Speed Laptop Connectivity
 -- Internet Access for Guest Rooms, Meeting Spaces --
 -- High-Speed, "Plug-and-Play" Functionality For All Apple and Microsoft Users --
 -- Resolves PBX Overload --
-- Utilizes Existing Phone Infrastructure --
SIOUX FALLS, SD (June 16, 1998) – LodgeNet Entertainment Corporation today announced the acquisition of the Connect Group Corporation.  With this acquisition, it will begin delivering a comprehensive solution that will cost-effectively enable plug-and-play high speed Internet access for hotel guest rooms and meeting spaces.  LodgeNet’s exclusive first-to-the-market application will focus primarily on the large business hotel market which includes more than 1.3 million rooms.

Through its acquisition of the Connect Group Corporation, LodgeNet will install into a hotel, technology that allows guests with laptop computers to connect to the Internet from their rooms.  The Internet access is more than 50 times the speed of conventional modems, and bypasses the hotel's PBX system. “This is a tremendous benefit to hoteliers who are struggling with overtaxed PBX systems due to drastically increased call traffic by guests using portable modems,” said David M. Bankers, Vice President of Corporate Technologies for LodgeNet. “The technology allows concurrent normal phone functionality, with voice and data, over existing phone lines, eliminating the need to install additional lines.”

LodgeNet's new solution is quick and easy to use. A guest simply plugs his or her computer into the room's Ethernet jack and opens the laptop's resident browser application. Access is instantaneous, with no software installation or configuration required.  The technology will also enhance LodgeNet's TV-based Internet service, which debuted at the Hospitality Industry Technology Exposition and Conference (HITEC)  last year.

"High-speed, plug-and-play Internet access is what guests are demanding, and that's what we're ready to deliver—to the guest room and the conference room," said Tim C. Flynn, President and CEO of LodgeNet.  "With the Connect Group, we are delivering the total solution for managed connectivity, one that’s ‘brain-dead simple’ for the hotel and its guests. We see high speed Internet access in the hotel guest rooms as ubiquitous as cable television and phone service as today’s traveler must stay in touch with information, whether it’s news, investment information or business affairs.”

 “After considering other strategic partners in this industry, we reached the simple conclusion that LodgeNet was the right partner for us,” said Roger McAulay, President of the Connect Group. “LodgeNet shares a similar strategic vision, they offer the most powerful and adaptable technical platform and most importantly, they have the right attitude toward providing their over 650,000 guest rooms with superior products and services.”

Pursuant to the agreement, LodgeNet will acquire all outstanding Connect Group Stock in exchange for LodgeNet Convertible Preferred Stock that is convertible into $5 million in LodgeNet Common Stock (valued at the closing) subject to the satisfaction of certain technology performance conditions.

LodgeNet Entertainment Corporation ( is a specialized communications company that serves more than 4,100 lodging properties in the United States and selected international markets. Through its proprietary b-LANSM technology, LodgeNet delivers guest pay services including on-demand movies, in-room video games and shopping, Internet access and other interactive applications, as well as digital-quality PRIMESTAR by LodgeNet free-to-guest programming. LodgeNet is listed on NASDAQ and trades under the symbol LNET.

US Web transferred the technology rights for the hotel solution to the Connect Group and held a minority interest in the company.  The key personnel involved in the development of the technology have joined the new entity.

For more information on the Connect Group please call the company at (800) 949-9954, or visit its site on the World Wide Web at:

Contact:  Ann Parker
(605) 988-1000

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