Here is another confirmation that CMGI can't break ther AV contract with DCLK... Enjoy reading it..
DoubleClick Investors Click Off
by Frances Hong
Technology Reporter
When news of CMGI Inc's potential acquisition of Compaq's {CPQ} Web site Alta Vista hit the Street, investors got nervous.
Should the deal go through, investors feared the biggest impact would be felt by Internet advertising firm DoubleClick {DCLK} -- since 43 percent of its revenues come from selling space on Alta Vista.
Given the 2.5 years remaining on DoubleClick's contract with the Web site, why the worry? Because CMGI owns two firms that compete with the New York-based ad firm -- Engage and Adsmart.
Here's a look at DoubleClick over the past five trading days:
DoubleClick Five-Day Share Price Chart
CMGI investors were also concerned, as shares of the Internet venture firm dipped over a five-day period, too.
CMGI Five-Day Share Price Chart
The selloff in DoubleClick shares, say some analysts, is a bit premature. Indeed, once the acquisition of Abacus Direct closes for DoubleClick, the total revenue contribution from Alta Vista will represent a much smaller piece of the pie, or about 14 percent.
Since the remaining contract with Alta Vista is difficult to break, DoubleClick has plenty of time to seek more clients, massage the relationship with Alta Vista and continue its aggressive acquisition strategy.
|
