From MultexInvestor, 5/6/99: interview with K.O'Conner:
multex.com
Playing Both Ends of the Market
Kevin J. O'Connor, Chairman and CEO, DOUBLECLICK
Interviewed by George S. Mack
What makes DOUBLECLICK (DCLK) unique is that it is both a media and a technology company. On the media side, the $6.7 billion market cap company acts as an ad placement agency to over 1,500 Web sites — from Multex.com (www.multex.com), to The Dilbert Zone (www.dilbert.com), to MTV Europe (www.mtve.com). The company's dynamic advertising reporting and targeting technology, or DART, is used by advertisers to gauge how their banner ads are performing in every market on a real-time basis. Chairman and chief executive Kevin J. O'Connor, who founded the company along with chief technology officer Dwight Merriman, spoke about DOUBLECLICK's success.
[THE INTERNET ANALYST] Tell us about your growth.
[KEVIN O'CONNOR] Three years ago, we were four people in a basement in Atlanta, and now we're over 500 people in 17 countries. We're hiring about one person per day, and we're continuing to expand internationally.
[TIA] What's your business all about?
[KO] We're building the advertising infrastructure for the Internet. At the base of our business is our proprietary DART technology that dynamically delivers advertising to consumers, enabling advertisers to target ads to them and us to measure how consumers respond to those ads.
[TIA] Who uses the service?
[KO] We provide technology services to advertisers and their agencies to measure their return on investment. We also provide the service to such companies as The Wall Street Journal and SPORTSLINE USA (SPLN). Vital Statistics:
Percent Internet: 100%
Recent Price: $120.93 (5/4/99)
Capitalization: $5.32 billion
52 week high: $176
52 week low: $6.75
Shares outstanding: 39.29 million
Revenue 1998: $80.2 million
Earnings per share:
EPS for 1998: ($0.62)
EPS estimate for 1999: ($0.48) consensus
EPS estimate for 2000: ($0.05) consensus
[TIA] What about the ad placement side?
[KO] We have the DoubleClick Network, where we represent and sell media properties to about 300 publishers throughout the world and 1,500 Web sites. We split ad revenue with the sites we represent in our network.
[TIA] Were you satisfied with your first quarter numbers?
[KO] We've had a handle on our growth, but we were pleasantly surprised that gross profits grew 24%.
[TIA] What is the biggest challenge in getting attention from analysts?
[KO] Our most difficult struggle is explaining our business. Most companies come onto the Net as an online replica of a traditional company — an example would be AMAZON.COM (AMZN). It's very easy to understand their business — they sell books and music online. Our business is predicated on having this bi-directional cable tying the advertiser, publisher and consumer together.
[TIA] So when does it start to click with them?
[KO] As analysts have come to realize that advertising is one of the fundamental drivers of the Internet, they see DOUBLECLICK as sort of the center of the infrastructure — we're the ones making advertising work. As they dig into our model, they say it's unique and powerful.
[TIA] How big is the market for Internet advertising?
[KO] I think most analysts are forecasting that in seven or eight years the Internet advertising market is going to reach about $20 billion.
[TIA] What is your business going to look like in five years?
[KO] Our goal is to become the gold standard for the way advertising is bought, sold and delivered on the Internet. We want to play a roll in every advertising model that happens online.
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