ValueClick Wednesday said it plans to purchase pay-for-performance ad network Click Agents.com in an all-stock deal, combining two of the top network and serving players in the cost-per-click advertising space.
As part of the deal, which is slated to close in late 2000 pending regulatory and shareholder approval, Click Agents will receive 5.3 million shares of ValueClick stock, valued at about $22.2 million.
Click Agents operates its own CPC-based ad network of about 4,000 sites and serves about 1 billion impressions monthly, with about 120,000 clickthroughs. Those stats will be added to ValueClick’s network to reach about 40 percent of U.S. Internet users, the companies estimate.
“I consider Click Agents probably the number three player in performance-based advertising in the U.S.,” said John Ardis, vice president of marketing for Westlake Village, Calif.-based ValueClick. “And when you combine number one and number three, it just further solidifies our position as the leading player.”
ValueClick said the deal will come close to doubling its domestic business, adding about $14 million in revenue and $4 million in operating profit to ValueClick’s 2000 results. ValueClick became cashflow positive last quarter, and expects to hit operational profitability in the first quarter of 2001.
“When you look at just the consolidation of critical mass and reach and relationships with advertisers and publishers together, and you look at you’ve consolidated two of the three most financially sound online advertising companies … it’s just a tremendous fit.”
Not only is it a good fit from a bottom-line perspective, executives from the two companies said the two mesh well in terms of philosophy.
“The cornerstone philosophy at both Click Agents and ValueClick is performance-based, results-driven online advertising and marketing,” said Click Agents chairman and CEO Gurbaksh Chahal, who retains the title of president of Click Agents following the acquisition.
However, the two companies do differ fairly significantly with regard to their networks, which will be kept as separate entities, initially.
“For time being [the networks] will continue to be kept separate. There’s a little bit of overlap, but we’re serving different needs of the marketplace. They’re not an exact mirror image of ValueClick. ValueClick has invested a lot of time and money in targeting and ad serving, where Click Agents has done a fabulous job of a more broader reach performance-based advertising.
“Whether you’re an online market looking for a broad reach outlet, or a highly targeted advertiser … on a performance basis, now, we’ve got you covered.”
However, the companies will work to integrate their ad serving platforms and non-network operations during the next three to six months, Ardis said. Sales staffs will remain independent.
“We’re taking a ‘best of’ approach. We’ve done a great degree of due diligence on the technology front, and we’re going to mesh the best of the technologies.”
The acquisition is the latest in a series of recent ValueClick announcements expanding its offerings. Last month, the firm acquired clickthrough analysis measurement firm StraightUP!, and last week it rolled out a CPC email product.
ValueClick looks to acquire firms “that are really likeminded, with profitability, innovation, customer service — and this is a perfect example,” Ardis said. “And we share the philosophy of performance-based advertising. Click Agents rose to the top when you apply that kind of criteria.”
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