Is Miva For Sale?

Pay-per-click and affiliate marketing network Miva has hired an investment bank to explore and evaluate strategic options, including a potential sale of the company.

The company tapped Deutsche Bank Securities to help Miva’s board of directors explore options that could include “the raising of capital through the sale of securities or assets of the company, a recapitalization, strategic acquisitions, and the combination, sale or merger of the business with another entity offering strategic opportunities for growth,” according to a statement issued today.

“A sale is an option, but there are plenty of other options we’re looking at too,” Craig Pisaris-Henderson, Miva’s chairman and CEO, told ClickZ News. “We’re looking at a range of opportunities, the bottom line being to see how we can enhance or increase shareholder value. We’ve built these tremendous assets on a global basis, and we don’t believe that value is being reflected in the marketplace.”

One of the problems with the market’s perception of Miva is that it is often compared to Google and Yahoo — two consumer-facing companies that have a very different business model than Miva, Pisaris-Henderson said.

“We’re not a consumer-facing search engine, we’re an enabling monetization company. Our revenue model is very similar, but our business model is completely different than Google’s or Yahoo’s,” he said. “We offer a sustainable advantage to anyone who has traffic to monetize, without being competitive to their business.”

Another problem is the string of setbacks Miva experienced in the past year, including shareholder lawsuits, the sudden departure of its CFO and auditors, and a prolonged patent suit with Yahoo that was settled in August.

Pisaris-Henderson insists that Miva’s problems are behind it, and said one of the goals of retaining Deutsche Bank is to make sure potential partners are aware of all that Miva has to offer. In the meantime, the company plans to continue business as usual, strengthening current relationships, adding new publisher partners and advertisers to its network, developing additional products, and maintaining client service.

The company’s challenges are likely to continue, according to Safa Rashtchy, senior research analyst at Piper Jaffray. “The increased concentration of advertisers on Yahoo and Google — and now possibly Microsoft — combined with a decreasing market share for second-tier search sites makes Miva’s business proposition very challenging in the current market,” Rashtchy told ClickZ News.

Rumors have swirled around the company recently, as its stock has not performed up to expectations. In a November SEC filing, the company expanded from four to seven the number of company officers covered by its change-in-control plan that would take effect if Miva were to be bought, making executives’ stock options immediately vest, ensuring they receive a year’s severance pay upon termination, and prohibiting them from competing with Miva for one year.

Potential buyers for Miva include Yahoo, which could absorb Miva’s advertisers and publishers into its Yahoo Publisher Network, or Microsoft, which could use Miva’s base to jump-start its fledgling ad network. It’s unlikely that there would be interest in individual parts of its business, given that the market already had its chance to acquire most of the parts before they were picked up by Miva, said Shar VanBoskirk, senior analyst at Forrester Research.

“Miva is an aggregation of several different previously independent search players, so I think the most likely future for them is an acquisition of them in total,” VanBoskirk told ClickZ News. “I think Miva’s most interesting functionality is its pay-per-call capability, which makes it a good fit for a Another possible buyer could be a company in Europe based on Miva’s strength there.”

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