Lengthy MSNBC article about DCLK possibly serving ads for Lycos:
Lycos may pick DoubleClick
Web portal in negotiations to use
Internet ad firm?s services, sources say
By Jane Weaver
MSNBC
Aug 23 ? Internet advertising leader DoubleClick has held active negotiations with Lycos to handle the portal?s ad serving business, sources say. If the deal goes through, it would be a significant win for DoubleClick?s rapidly growing ad management software business.
?WE DON?T EVER comment on rumors or speculation,? says a DoubleClick spokeswoman. Lycos couldn?t be reached for comment, but analysts who follow the Web portal confirm its search for a new ad serving technology. Engage, a CMGI company, currently handles the ad serving business for Lycos with a product called Accipiter. ?Lycos has been looking for an ad serving solution,? says Abhishek Gami, analyst with William Blair & Co. ?They?ve acquired a lot of disparate properties in the last 18 months and none of them are on the same [technology] platform, so it?s a good time for them to scale up.? Among Lycos? acquisitions are telephone directory WhoWhere, Wired Digital (which includes the search engine Hotbot) and Wise Wire. Some observers suggest Lycos? move could also be a sign of the portal?s efforts to gain more independence from CMGI, which is the largest shareholder in Lycos, with a nearly 20 percent stake. There have been lingering tensions between Lycos and CMGI over CMGI chairman David Wetherell?s part in the collapse of USA Networks? planned buyout of Lycos, as well as CMGI?s recent acquisition of rival portal Alta Vista. Wetherell is also chairman of Engage, and CMGI owns 82 percent of Engage.
?They are breaking away from using too many CMGI properties,? says Gami.
Ad serving software delivers banners to a Web site and
tracks click-through rates on the ads. It can also follow
surfers when they go to a marketer?s site after clicking on an
ad banner, and track what they do there. This kind of
information is critical for mainstream advertisers, who need
to know whether their Internet marketing messages are
effective.
DoubleClick makes money from handling ad sales for
its network of 490 sites worldwide (including Alta Vista and
Autobytel, among others) and from Web publishers and
advertisers who use its DART ad serving technology.
DoubleClick?s year-old ad serving software has
quickly grown to represent about 17 percent of
DoubleClick?s revenues. DART?s customers include Web
publishers such as Alta Vista, iVillage, The Wall Street
Journal and CBS.
Furthermore, DoubleClick has been under increasing
pressure from Wall Street to reduce its dependence on Alta
Vista. Alta Vista, which was recently acquired by CMGI
from Compaq Computer Corp., currently provides about
20 percent of DoubleClick?s revenues, according to
DoubleClick?s June 30, 1999, filing with the Securities and
Exchange Commission.
The DoubleClick win would be a high-profile loss for
Engage, which recently raised $90 million in a successful
initial public offering, although not a significant financial hit. |
