DMD was right, OPTMASTER. NETG sells to DCLK for a CRAP ASS price. No PREMIUM! This sucks. We now own DCLK! SHORTS win this time!
Tuesday, Jul 13 1999 1:32AM ET
Reply # of 2500
By Andrea Petersen, Staff Reporter of The Wall Street Journal
NEW YORK -- Internet advertising firm DoubleClick Inc. is expected to announce it is
acquiring rival NetGravity Inc. in a stock deal valued at about $555.4 million, or $26.32
a share.
The move is DoubleClick's latest bid to dominate the fast-growing market of online
advertising. Last month, DoubleClick announced plans to acquire Abacus Direct Corp.,
which markets consumer-purchasing data to catalog firms, in an all-stock deal valued at
$1 billion.
DoubleClick, which sells advertising space on a network of more than 1,500 Web sites,
is offering 0.28 share of its stock for each share of NetGravity. NetGravity, based in
San Mateo, Calif., primarily sells and maintains a computer software system that allows
Web publishers to manage the advertising shown on their sites.
In Nasdaq Stock Market trading yesterday, DoubleClick closed at $94,down $8.9375,
or 8.7%, and NetGravity closed at $27.50, down $2.125, or 7.2%.
"Our goal is to be the internal operating system for advertising on the Net," said Kevin
O'Connor, DoubleClick's chairman and chief executive officer.
NetGravity has blue-chip clients including International Business Machines Corp. and
Time Warner Inc., which buy the software that lets them deliver ads on their Web sites.
With the acquisition, DoubleClick will be able to offer NetGravity's proprietary software
system or its
own Dart system, a method of delivering ads that is maintained on DoubleClick's
servers.
The top executives of DoubleClick and NetGravity hammered out the deal in
negotiations that began just last Wednesday at a San Francisco airport hotel. Both
boards approved the deal, code named "Project Ice Cream Scoop," late yesterday
afternoon.
"Our businesses are very complementary," said Kevin Ryan,
DoubleClick's president. "And scale is definitely important in the Internet."
The combined company will be named DoubleClick and will be based in New York.
Mr. O'Connor and Mr. Ryan will have the same posts in the new company. Eric W.
Spivey, CEO of NetGravity, is expected to leave.
NetGravity brought in Mr. Spivey in April to succeed co-founder John Danner as CEO,
specifically to accelerate the company's growth.
Internet-ad spending could jump to $3 billion this year, says Jupiter Communications, a
New York Internet-research firm, from an estimated $1.9 billion in 1998.
NetGravity posted a loss of $11.3 million on revenue of $11.6 million last year. In
1998, DoubleClick posted a loss of $18.1 million on revenue of $80 million. Revenue
has been growing rapidly for both.
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