CMGI becomes Net ad player
CMGI chief David Wetherell is amassing the weapons to challenge DoubleClick's dominance in Internet ad serving.
With Web ad spending headed for $3 billion this year, companies that deliver banner ads when you click on a page are hot. Last week, CMGI, the investment company that helped launch Lycos and GeoCities, said it would buy AdForce, the No. 2 ad server. And CMGI's Engage Technologies unit, a database of 35 million consumers' Web habits, said it would buy AdKnowledge, a firm that helps target Web ads at likely buyers.
"This is a full frontal assault on DoubleClick," says Jonathan Nelson, CEO of Organic Online. And when the dust settles, CMGI could rival DoubleClick's full-service system.
In the past, Web advertisers were content to buy on high-traffic sites. Now they demand that their ads be served only to likely customers.
To help sites do that, DoubleClick developed "DART," a technology that lets sites track ad results. It also bought NetGravity, a system to let sites control their ad serving. And it's buying Abacus, a database of Americans' off-line catalog buying habits.
How CMGI's units now match DoubleClick's arsenal: Its Adsmart sales force is competitive in representing Web publishers to ad buyers; AdForce's ad delivery system is comparable to DART; CMGI's Accipiter software rivals NetGravity; and Engage has the ad targeting ability DoubleClick hopes to get from Abacus.
"There's always been competition," says DoubleClick CEO Kevin O'Connor. But the battle "is going to wreak real chaos," warns Forrester Research analyst Jim Nail.
An example: 24/7, a Web ad sales firm that represents 4,000 publishers, has a five-year deal for AdForce to serve its ads. But AdForce is now allied with rival Adsmart. "This takes AdForce from being a neutral player to being one with a different agenda," says 24/7 CEO David Moore.
In other news, CMGI said that it plans a January IPO of its Alta Vista search engine and said net operating revenue for its fiscal year ended July 31 rose to $176 million from $81.9 million.