CGI's second affiliate acquisition in a week could help lower prices in the affiliate marketing space.
CGI Holding Corp. has made its second acquisition of an affiliate marketing player in five days. The company purchased KowaBunga! Marketing, operator of an affiliate platform and an upstart affiliate network serving approximately 2,000 merchants. CGI is the holding company for Web marketing firm WebSourced.
Terms of the acquisition weren't disclosed.
The purchase follows on a letter of intent from CGI to acquire affiliate marketing player PrimaryAds in a deal worth $10 million, plus performance incentives. Taken together, the two purchases amount to a big play in affiliate marketing for CGI and WebSourced.
KowaBunga!'s union with WebSourced is likely to strengthen the former company's fledgling affiliate network, called Kolimbo, affiliate marketing experts say. The result could be a strong competitor to dominant affiliate networks LinkShare and Commission Junction (CJ), which is owned by ValueClick.
"LinkShare and CJ have an effective monopoly," said one seasoned affiliate manager, who asked not to be named. "I used to be able to get deals out of CJ that I can't anymore. Here you have a third player shaking up the space. The competition is good for merchants, it's good for publishers, it's good for affiliates."
CGI CEO Gerry Jacobs said the company will bundle its new affiliate marketing holdings with other online marketing products, including WebSourced's SEO (define) offering.
"We're very excited about entering the affiliate marketing space," he said. "We view it as a logical extension for our companies. A lot of the publishers PrimaryAds is delivering ads to are also potential candidates for search engine optimization services. Also, many of the companies WebSourced represents would make good clients for KowaBunga!"
Westland MI.-based KowaBunga! serves 2,000 merchants through its affiliate network. In keeping with CGI's decentralized model, it will continue to operate separately. No layoffs or executive changes are planned.
CGI, which is in the process of changing its name to Think Partnership, also picks up search and email marketing technologies as part of the acquisition.
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Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
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