CMGI Adds Flycast to its Cache of Online Ad Firms
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CMGI Inc. continued to display its appetite for Internet advertising companies Thursday spending $690 million on Flycast Communications Corp. The buy marks its third advertising-related purchase in 10 days.
CMGI will issue .4738 of its shares for every share of Flycast (FCST). The stock deal is expected to close in January 2000. CMGI also holds the option to purchase up to 19.9 percent of Flycast's stock if the merger agreement falls through.
CMGI (CMGI) said that Flycast fits into its advertising strategy because of its response solution based on an aggregated inventory of site advertisements, not on individual site marketing.
This model is complementary to Adsmart in particular, according to CMGI's chairman and CEO David Wetherell, because "Adsmart is focused on site-specific representation and maximizing CPMs for branded sites, while Flycast emphasizes the ROI model."
"With the acquisition of Flycast, CMGI again strengthens its position to offer a full service, end-to-end solution for both advertisers and Web publishers," Wetherell said.
Speaking at a Thursday morning press conference, David Andonian, CMGI's president of corporate development, countered criticisms that the company is expanding too rapidly. He said CMGI isn't concerned about losing its focus as its roster of companies grows.
"I think the success of our model is being able to give a unique identity, having different brands, very focused businesses, that can work together and come together around complementary solutions with the customer being first in all the companies," Andonian said. "They all benefit by expanding the number of interactions."
"If, for whatever reason, we find and the market tells us we need tighter integration, there's nothing wrong with combining businesses. We've done that in the past when we needed to," he added.