Clouds Keep Gathering Over ValueClick

ValueClick already warned investors back in July that it’s performance for the rest of the year would suffer owing to a number of factors. One of those factors was the defection of sites and advertisers from its lead-gen programs in the wake of an FTC investigation of the company. Another is the well-documented trend of falling prices for display ads.

So it should come as no surprise the company continued to struggle in the third quarter. In its just-announced Q3 earnings report, ValueClick reported net income of just $2 million, down 88 percent from $16.8 million for the year-ago period.

Afterward, UBS Analyst Ben Schachter added some discouraging commentary to the bummerfest. According to his research note, ValueClick will have a harder time drawing search traffic to its comparison shopping sites, and may lose ground in display as Yahoo, AOL and others build more sophisticated platforms.

“While it has not been impacted significantly yet, we are concerned that the platform display ad approach from YHOO/GOOG/others may affect VCLK’s Display biz (though the impact is admittedly unclear),” wrote Schachter.

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