DoubleClick to Buy MessageMedia

  |  June 1, 2001   |  Comments

Following April's acquisition of FloNetwork, the industry leader continues its moves to become the biggest player in e-mail.

The big get bigger, as online advertising giant DoubleClick said it would purchase email marketer MessageMedia for $41 million in stock.

DoubleClick said it would issue 4.36 percent of a DoubleClick share for each share of Louisville, Colo.-based MessageMedia's stock -- a 42 percent premium over MessageMedia's 10-day average closing price of $0.42 per share.

DoubleClick said it expects to close the acquisition in third quarter, pending approval by MessageMedia's shareholders.

The acquisition would cement New York-based DoubleClick's status as a leading player in email marketing. Through the deal, DoubleClick gains control of MessageMedia's permission-based email marketing practice, which delivers about 100 million emails monthly for some 300 clients, including Cisco, E*Trade and Columbia House.

"This acquisition reinforces our commitment to deliver flexible email marketing solutions to our global customer base," said Court Cunningham, who is vice president and general manager of DoubleClick's DARTmail technology unit. "With this acquisition, we will expand our customer base to over 500 leading direct marketers and increase the number of personalized emails delivered to over 700 million per month."

In addition to upping DoubleClick's commanding presence in the email delivery space, the purchase adds a licensed software package -- MessageMedia's UnityMail -- to DoubleClick's product lineup.

DoubleClick also gains MessageMedia's M3Platform, an outsourced email campaign product similar to its own DARTmail and FloNetwork solutions. Eventually, DoubleClick said it would integrate M3Platform into its own systems, but plans to support the service independently in the meantime.

In addition, DoubleClick said MessageMedia's presence in Europe should assist it with expansion into the regional email space.

"DoubleClick's commitment to developing the most robust email marketing solutions in the market, coupled with their strong financial position, make this transaction a strategic fit for MessageMedia," said MessageMedia president and chief executive Larry Jones. "Together we will be able to provide a suite of solutions that deliver highly integrated, cost-effective email campaigns for businesses that want to enhance the level of their customer communications."

The deal is only the latest move by DoubleClick to take advantage of market weakness by beefing up its presence in the email space, an area where only last year it was perceived as being weak. In April, the company closed its acquisition of Toronto-based FloNetwork -- a move that boosted DoubleClick's outsourced email delivery offerings and quadrupled its client base -- and inked a reseller deal with streaming rich media firm Radical Communications.

DoubleClick also runs a sizable in-house list services practice, and has an investment in Return Path, an Alley-based startup that aims to help marketers avoid email bounce-backs.

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