DoubleClick Does Better Amid Uncertain Times

  |  February 4, 2005   |  Comments

Affiliate, search, and e-mail marketing drive growth.

Ad technology company DoubleClick posted better-than-expected revenue and a profit for the fourth quarter, as the company continues analyzing "strategic options." The company credits increased use of DART for Advertisers (DFA), improvements in email, and stronger results from Performics.

The company brought in $83.5 million in revenues in the Q4, resulting in net income of $10.6 million, or $0.08 a share. For the full year, revenues were $301.6 million, while net income came in at $37.5 million, or $0.26 a share.

CEO Kevin Ryan said the Performics division performed especially well, increasing revenue by 60 percent year over year. But he expects business to slip considerably in the first quarter due to seasonal factors. Performics encompasses both search engine and affiliate marketing, which traditionally performs strongly in the fourth-quarter holiday season. Performics recorded revenue of $9.1 million in the fourth quarter, which was stronger than DoubleClick had expected.

"We saw strong growth in overall search and e-commerce spending plus great execution from the team in Chicago," said Ryan.

The company has high hopes for both DART Search, a beta product currently being tested by a number of clients, and DART Motif, the firm's rich media offering.

"Motif is really growing quickly now," said Ryan. "We're going to have a good 2005."

The company's Ad Management division, which includes DFA and DART for Publishers (DFP), had mixed results. Prices declined for both products, but volume increases in the DFA business outweighed the negative pricing factor. Overall Ad Management revenues were $33.2 million in the quarter, versus $34.1 million in the same period in 2003.

The Marketing Automation division, which includes email and SmartPath, brought in $14.5 million in Q4, as compared with $12.8 million in the year-ago period. The company attributed growth to the acquisition of SmartPath and organic growth in email.

Another DoubleClick unit, Data, which serves direct marketers, brought in $26.7 million in the fourth quarter, compared to $26 million in the year-ago period.

DoubleClick dismissed investor concerns that the ongoing search for a buyer either for the company, or for certain divisions, was having a negative effect on employees. The company has issued retention bonuses to key employees and Ryan said the firm hadn't seen greater than normal turnover.

Because of the uncertainty, DoubleClick wouldn't say how it expected to do for the full-year of 2005. For the first quarter, it said it predicted revenues of between $70 and $75 million. Results would come in somewhere between a loss of $0.01 per share and earnings of $0.03 per share.

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ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

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