Friday September 24 1:51 AM ET
Engage Technologies Buys AdKnowledge For $190 Mln
By Ilaina Jonas
NEW YORK (Reuters) - Engage Technologies Inc. (Nasdaq:ENGA - news), whose products profile online
shoppers' tastes, said Thursday it had agreed to buy advertisement tracker AdKnowledge Inc. for $193
million in stock.
The deal will bring together Engage's ability to create anonymous profiles of individual shoppers with AdKnowledge's
ability to track the impact of advertisements, making it easier to target ads to consumers, officials of the two companies said.
Andover, Mass.-based Engage will acquire Palo Alto, Calif.-based AdKnowledge in a tax-free, two-step process.
Engage's majority shareholder CMGI Inc. (Nasdaq:CMGI - news) will issue $170 million of CMGI stock to AdKnowledge
holders. Engage will then contribute $23 million of its stock to the balance of the purchase as well as issue $170 million of
its stock to CMGI, said Steve Royal, Engage Technologies chief financial officer.
The deal is expected to close later this year or early 2000. Engage will own 100 percent of AdKnowledge, which will see
no change in leadership, Royal said.
Shares of Engage were down 2-13/16 to 33 Thursday before news of the deal was released.
The acquisition highlights the consolidation within the online advertising industry, said Betsy Zikakis, Engage's vice
president of marketing.
In July, DoubleClick Inc. (Nasdaq:DCLK - news) said it would buy rival NetGravity Inc., for $530 million in stock just
weeks after it agreed to buy Abacus Direct Corp. (Nasdaq:ABDR - news), a consumer information collection company for
$1 billion.
Engage has created a database of 35 million individual consumers, profiling their shopping habits and interests. The
information allows Web-site opertors to better position advertisements that match consumers, Zikakis said. Web sites can
also use Engage's software to organize their own data.
``We are very aware of privacy issues involved in privacy debates,' she said. ``We think we have a solution that balance
needs for the consumers' privacy with business needs.'
Zikakis said Engage does not collect names or any other information that could identify a shopper. Instead, consumers are
tracked by numbers.
AdKnowledge provides technology and services that allow online marketers such as eBay Inc. and eToys Inc. to track
whether the placement of an advertisement results in a sales lead or purchase, said Dave Zinman, AdKnowledge founder and
vice president of marketing. AdKnowledge also brings to the deal its 200 or so Internet marketers. |
