In the wake of its $29 million acquisition of shopping search site Pricerunner, online ad media and technology firm ValueClick outlined plans for an aggressive push into Europe. The company also raised its revenue guidance for the year based upon expectations for the Pricerunner integration.
“The great thing about the Pricerunner business is that its technology” — because it can be easily translated into new languages — “lends itself to entering new markets,” Carl White, managing director of ValueClick Europe, told ClickZ News.
After bringing Pricerunner into France and Germany — Europe’s biggest e-commerce market — ValueClick plans to use the shopping search engine to make headway into Italy, the Netherlands and Belgium. Its greatest competition is likely from Yahoo-owned Kelkoo, which operates in Belgium, France, Denmark, Germany, Spain, Italy, the Netherlands, Norway, and Sweden. White believes Pricerunner’s product is second-to-none, however.
“One of the things that attracted us to Pricerunner was the consumer experience,” he said. “We believe it has the best product in the European market.”
White added that the Swedish company, pre-acquisition, had been constrained by a lack of investment and a limited geographical footprint. The next step after geographical expansion, executives say, will be to cross-sell Commission Junction services to Pricerunner advertisers, and vice versa.
“What’s been very interesting since the addition of Commission Junction [acquired in October of 2003] has been the massively positive response from advertisers to the single-source model,” said White.
“What we’ll be considering over the coming weeks,” he said, “is which markets and when. I fully anticipate that we’ll expand our footprint across Europe in the next year.”
With Pricerunner’s contribution estimated at around $20 million, ValueClick is now expected to bring in total revenues of approximately $150 million to $154 million for the full year 2004. Previously, the company had given guidance of $147 to $150 million. Excluding a one-time gain associated with the sale of ValueClick Japan, the company expects EBITDA — earnings before interest, taxes, depreciation, and amortization — of approximately $38 million to $41 million, an increase from prior guidance of $38 million to $40 million.
The planned European push might also provide some lessons for ValueClick in the United States. Though ValueClick’s operations are spread out geographically in the U.S. — largely because of the roll-up growth strategy the company has used — its European offices are one-stop-shops. It’s a model the company may eventually adopt Stateside.
“That makes the European business at the forefront of ValueClick,” said White. “We see ourselves as a test bed for the future success of the organization.”