Web Incentive Marketers to Join Forces

Two New York-based online incentive marketers will become one, following the acquisition of Milesource by rival SilverCarrot.

Both firms, which are each profitable, host online incentive programs for advertisers, as well as run consumer-focused Web sites.

SilverCarrot is banking that the all-cash merger will help it beef up its database of opted-in consumers. While it maintains a database of 10 million consumers and sends out about 1 billion emails monthly, SilverCarrot said Milesource’s smaller membership was more lucrative.

While it only counts about 1 million members, Milesource’s opt-in database has gathered more information on its registrants, who also tend to be more responsive than SilverCarrot’s.

“We already have a database of about 10 million people from our YoursFreeWithPurchase product, and that’s a good database, but Milesource offers a much more targeted database of people,” said SilverCarrot Chief Executive Allan Levy. “We can take our existing media and generate a substantial amount of good, fresh sources of registrations from Milesource. We register about 1 million consumers a month on our site … and our immediate goal is to build the Milesource registrations to about 200,000 a month.”

SilverCarrot also gains Milesource’s sizable client roster, which includes Barnes & Noble , Gap , Dell , Staples and Wal-Mart . SilverCarrot serves clients including Cendant’s Trip.com, AT&T WorldNet and Orbitz.

SilverCarrot said the acquisition is likely to be the first of several such purchases, but declined to go into specifics.

“It’s the first step in our larger strategy to build a direct marketing media company through acquisition,” Levy said. “We are in talks to acquire similar companies with databases right now.’

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