24/7 Real Media Buys Wireless, Desktop Marketer

Online ad server and technology firm 24/7 Real Media is adopting an acquisition strategy again, this time snapping up the assets of specialty online promotional play NowMarketing.

New York-based NowMarketing, formerly known as VFlash, offers services including wireless and desktop messaging applications used primarily for promotions.

In connection with the acquisition, NowMarketing’s parent — Israeli high technology holding company Elron Electronic Industries — and an unnamed Elron investor jointly agreed to make a $1.25 million investment in 24/7 Real Media.

24/7 Real Media said it expects the deal to be neutral to its results this year, and accretive to earnings during the next year.

As a result of the acquisition, NowMarketing’s hodgepodge of products will be integrated into its new parent’s iPromotions division, said 24/7 Real Media Chairman and Chief Executive David Moore.

Initially a subsidiary of interactive CD producer CDKnet.com, NowMarketing — then called ValueFlash.com — was acquired last year by Elbit, a unit of Elron. Since then, it’s undergone a series of name changes while continuing to market its flagship VFlash Messenger, a private-label desktop application to which marketers send messages to consumers. The tool has been used by music artists including Creed, Britney Spears and *NSYNC, as well as McDonald’s , Ford and Coca-Cola .

Earlier this year, NowMarketing added wireless marketing to its suite of services, signing an agreement with GE’s NBC to promote the network’s coverage of 2002 Winter Olympics. Through the effort, NowMarketing powered a promotion in which TV viewers could dial “#NOW” on their mobile phones to request more information via email about television ads, while also entering a contest.

Despite the fact that similar efforts aimed at encouraging interaction with radio ads failed to find any great traction, NowMarketing said the ubiquity of the cell phone (versus earlier players’ proprietary devices) as well as its easy-to-remember dialing code and rapid transaction time would make it a success. The company went on to do work for a few Hachette Filipacchi titles.

“We’re especially excited about this acquisition for our customers across each of our business units,” Moore said. “This should have a favorable impact on [iPromotions’] ability to deliver for our marketer and publisher clients.”

The news follows 24/7 Real Media’s announcement that it has closed on the remainder of its recent investment by Sunra Capital Holdings. The investment, which had been contingent on shareholder approval, completed Sunra’s $8 million investment in the cash-strapped online marketing play.

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