AltaVista, DoubleClick Restructure Contract

For years, one of the biggest questions about DoubleClick concerned the possibility of its losing AltaVista as a client.

Back in 1998, after all, the portal accounted for 26.9 percent of the advertising giant’s business. And then, when AltaVista was acquired by CMGI — which had its own substantial advertising assets — the question became when, not if, DoubleClick would lose AltaVista.

This week, the two companies came a little closer to answering that question, restructuring the terms of the agreement under which DoubleClick provides services to the portal.

Under the new agreement, AltaVista has extended its contract to use DoubleClick’s “DART for Publishers” ad serving technology through 2004. The majority of advertising served on AltaVista will use DART through 2002. In 2003, at least half of all of AltaVista’s ads will be served through DART. AltaVista will assume majority responsibility for ad serving thereafter. Originally, the agreement between the two companies was set to expire in December 2001.

Meanwhile, AltaVista will slowly be taking over more of the ad sales responsibilities. The old agreement called for the company to gradually take over the accounts of 200 large US advertisers over the year 2000 — accumulating thirty more accounts every few months. DoubleClick will continue to represent most of AltaVista’s international markets on an “exclusive third party basis” through December 31, 2001, but AltaVista will gradually be taking over those accounts, as well.

Beginning with their first restructuring in November of 1999, DoubleClick and AltaVista have been working out the details of how to cede full responsibility for advertising. Although, in its early stages of development, AltaVista needed the DoubleClick relationship, it would no, understandably, rather take more control of its destiny by controlling advertising sales in house. This second restructuring simply extends the period of that hand-over and extends AltaVista’s commitment to continue using the DART technology — giving DoubleClick, and AltaVista, a softer landing. In 1999, DoubleClick had reduced its dependence on AltaVista, and the portal accounted for only 10.8 percent of its revenues.

“This agreement is a major step forward in accelerating our path to profitability by allowing AltaVista to directly serve our advertising partners,” said Rod Schrock, president and chief executive officer, AltaVista.

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