wily, Alta Vista: Compaq Computer Corporation
Dow Jones Newswires -- August 16, 1999
DJ Doubleclick Seen Benefiting From New AltaVista Service
By Joelle Tessler
NEW YORK (Dow Jones)--AltaVista's recent launch of a free, advertising-supported Internet access service could spell good news for Internet advertising company Doubleclick Inc. (DCLK), at least one analyst believes.
Friedman Billings Ramsey analyst Daniel MacKeigan expects that Doubleclick, which already sells and serves up much of the online advertising that appears on the AltaVista search engine, will benefit as it now also sells and delivers ads for AltaVista's new Internet access service.
MacKeigan explained that AltaVista's new service, which was launched last week and uses technology from 1stup.com, actually "plays into" Doubleclick's business model since the new service depends on advertising to generate revenue.
In fact, the analyst added, Doubleclick should benefit generally from the emergence of a number of free, advertising-supported Internet service providers such as NetZero and Freei.Net. These companies provide users with free access to the Internet and make money by showing them advertising, which usually appears in a window that travels with users as they surf the Net.
Wall Street has been concerned about the implications for Doubleclick of CMGI Inc.'s (CMGI) agreement last month to purchase of an 83% stake in AltaVista from Compaq Computer Corp. (CPQ).
Although AltaVista is currently Doubleclick's largest customer, Doubleclick competes with CMGI's own Engage Technologies, which also targets and serves up advertising. Many analysts wonder whether CMGI could shift much of AltaVista's advertising business to Engage from Doubleclick.
But MacKeigan believes that AltaVista could ultimately wind up working with both Doubleclick and Engage. He noted, after all, that the two companies would complement each other since Doubleclick's real strength is its DART ad-serving technology, while Engage's real strength is its massive database of 30 million online consumer profiles.
AltaVista spokesman David Emanuel confirmed that Doubleclick can sell ads for the AltaVista's new free Internet access service. He added that AltaVista plans to honor its current contract with Doubleclick, which doesn't expire until 2001.
Emanuel said he couldn't comment on whether AltaVista will also work with Engage and pointed out that the deal with CMGI hasn't even closed yet.
Doubleclick and CMGI didn't immediately return phone calls.
Doubleclick's shares were recently up 1 1/8, or 1.4%, at 83 1/2.
-By Joelle Tessler; 201-938-5285 |
