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DoubleClick to Buy FloNetwork in Bid to Beef Up E-mail Unit

Online advertising giant DoubleClick Friday announced that it will acquire e-mail delivery firm FloNetwork, Inc., for an undisclosed amount of cash and stock.

Speculation had been brewing in recent weeks -- since its planned acquisition of e-mail marketer NetCreations fell through -- about what New York-based DoubleClick would do to boost its e-mail practice. Now, industry watchers have their answer, or at least part of it.

Privately held, Toronto-based FloNetwork, which began as Media Synergy, operates as an ASP and enables clients to send mass e-mail campaigns. The company handles designing e-mail messages, building and managing address lists, and results tracking, reporting and analysis, in addition to the actual delivery.

New York-based DoubleClick said it had been attracted to the firm because of its growth during 2000 -- largely attributable to an increase in e-mail's overall importance to online marketers because of its low cost, rapid time-to-market, and higher average response rates versus other online spends (like banner ads, for instance -- the acquirer's native practice).

During the fourth quarter of 2000, FloNetwork delivered over 540 million e-mails for more than 125 publishers and ad agencies, including Procter & Gamble, barnesandnoble.com, and J. Walter Thompson.

Meanwhile, DoubleClick has attracted more than 60 customers for its five-month old DARTmail -- its e-mail marketing technology product that delivers e-mail messages and inserts targeted ads into e-mails. Now, with the acquisition of FloNetwork, DoubleClick boosts its e-mail client roster significantly.

"With this acquisition, we will expand our customer base to over 200 leading direct marketers, increase the number of personalized e-mails delivered to over 500 million per month, and offer our customers one of the most comprehensive suites of e-mail marketing technology services on the market," said Court Cunningham, vice president and general manager of the firm's DARTmail technology unit.

The move is the second major acquisition attempted by DoubleClick to boost its e-mail offerings in recent months. An earlier agreement to buy New York-based NetCreations -- securing the company's technology and coveted double-opt-in e-mail address lists -- fell through when a better offer came from Italian yellow-pages publisher, ISP and portal operator SEAT Pagine Gialle.

In the time since the NetCreations deal first was announced, DoubleClick had been busy in its own right -- expanding its in-house e-mail lists, beefing up its e-mail staff, and building its list brokering and technology practices.

Now, an enlarged DoubleClick e-mail practice -- repping lists with a total of about 40 million opt-in addresses, and owning about 14 million of those itself -- seems ready to go head-to-head with bigger names in e-mail marketing. Those big names include NetCreations (which reps lists of about 26 million addresses) and ad network 24/7 Media, which has about 25 million.

"The acquisition of FloNetwork significantly increases DoubleClick's investment in the e-mail marketing technology business, and positions DoubleClick to become the clear market leader in this space," Cunningham said.

Interestingly, the acquisition of FloNetwork -- which focuses only on the technology aspects of e-mail marketing -- might seem to be a better fit for DoubleClick than NetCreations, since the ad network lately has been de-emphasizing its media business in favor of the technology side of its operation.

It also makes a DoubleClick acquisition of 24/7 Media -- a longtime rumor in the Alley -- less likely. 24/7, once considered a strong player in the e-mail area, is running low on cash and has been busy selling off portions of its investment portfolio and downsizing to stay afloat. Now that it has an expanded e-mail delivery system, it's doubtful that DoubleClick would snap up an ailing 24/7 Media simply for its opt-in