Viewpoint Buys Unicast

  |  December 2, 2004   |  Comments

A deal worth $7.3 million fills gaps in both companies' offerings.

Viewpoint will acquire rich media competitor Unicast in a deal valued at $7.3 million, paid in common stock and assumption of debt.

The acquisition combines Unicast's sales force and its well-known rich media formats with Viewpoint's access to public markets, big clients like America Online and ad delivery technologies.

Unicast CEO Dick Hopple will depart in the wake of the deal, though he has been asked to join the merged company's board. The rest of the Unicast management team will stay on, both parties said.

Viewpoint's product line will immediately be packaged along with Unicast's ad units, including the Superstitial and Video Commercial. Unicast's sales team will take responsibility for pushing many of Viewpoint's products alongside its own.

"We have not had a very large sales force," said Viewpoint CEO Jay D'Amato, who said his company would rely on incoming staff from Unicast for both sales and marketing. "[The purchase] positions us and Unicast to have a piece of the market which is growing in importance, which is the video ad serving marketplace. There has not been a clear leader."

The move is the first acquisition to hit the rich media space in some time, and perhaps the largest since Unicast acquired Enliven in 2002. In this case, consolidation will benefit the industry, according to Jeff Lanctot, VP of media for Avenue A/Razorfish.

"Some consolidation and focus in this area, via this acquisition, is a good thing," he said. "The industry is going to respond favorably. Consolidation in this case is going to move everything along. There are still plenty of other competitors, so it won't stifle innovation."

JupiterResearch analyst Nate Elliott does not view the move as a consolidation, since Viewpoint isn't in the business of selling ads. He said the deal should not be seen as a sign of coming acquisitions in rich media.

"I don't think there's going to be consolidation in rich media in the near future," Elliott said. "If Unicast merged with Eyeblaster, that'd be consolidation. But Viewpoint isn't really in this space. This doesn't help rich media advertisers simplify their buys, because no one's buying rich media ads from Viewpoint."

The acquisition fills gaps in each company's offering. Whereas Viewpoint gets sales and marketing operations, Unicast stands to benefit from Viewpoint's visibility as a public company, and in particular from its relationship with America Online. Viewpoint last year struck a $10 million deal to license its rich media management technology to the ISP and portal. Other licensing clients include Samsung, General Electric, Hewlett-Packard and Sony.

Since Viewpoint is a public company with a more diverse product line than other rich media players, the company is positioning itself more as a full-service rich media management firm than a purveyor of formats.

"It's less about the PointRolls and Eyeblasters," said Unicast senior VP Allie Savarino. "This puts a separation between an independent rich media company and a publicly traded organization that's going to meet advertisers' needs. The sum of the parts... will be a force to be reckoned with."

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ABOUT THE AUTHOR

Zachary Rodgers

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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