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DoubleClick, Flatiron, Chase Capital Partners Bet on E-mail Tech Firm

E-mail change-of-address service Return Path saw some green Tuesday, as a DoubleClick eager to extend its e-mail offerings inked a sizable investment and partnership with the firm.

The online ad giant was joined in Return Path's second round of funding by Flatiron Partners and Chase Capital Partners. The three firms invested a total of $7.7 million in return for an undisclosed minority stake in the company.

DoubleClick also has the option over the next year to invest up to $10 million more.

As part of the financing, which Return Path said will be used to bolster its service capabilities, DoubleClick senior vice president of data services Jonathan Shapiro and Flatiron principal Phil Summe will join the company's board of directors.

Return Path is premised on the idea that e-mail addresses in a company's database go "dead" because its customers do not have a convenient, centralized way to notify e-mail senders of their address changes.

More than 25 percent of e-mail addresses go dead yearly due to job, ISP or technology changes, the company said, causing 2 to 20 percent of all monthly commercial e-mail to bounce. This cuts into e-mail marketers' efficacy and forces bulk mailers' servers to shoulder the burden of processing returned e-mails.

"This investment will enable DoubleClick to help its numerous e-mail clients reduce wasted marketing dollars by putting an end to e-mail churn by offering them a proven and robust solution to easily manage their e-mail databases," said DoubleClick chief executive officer Kevin Ryan.

Whether consumers can be coerced to change their e-mail addresses in the database when they switch jobs or ISPs, remains to be seen.

DoubleClick also netted a channel partnership with Return Path through the deal. This enables DoubleClick to offer Return Path's services to its e-mail clients, and to those of NetCreations, which DoubleClick will acquire in late fourth quarter, following shareholder and regulatory approval.

Return Path targets its change-of-address service at e-mail marketers, as a tool to help them recapture lost revenue opportunities due to "dead" e-mail addresses in their customer database.

In addition to Return Path's flagship change-of-address service, DoubleClick will also sell Return Path's bounced e-mail processing service, SmartBounce.

"We are excited to leverage this strategic relationship with DoubleClick to create an open platform for e-mail change-of-address that mirrors the U.S. Postal Service's National Change of Address service," said Return Path CEO Matt Blumberg.

"The combination of Return Path's permission-based service with DoubleClick's significant market reach will provide thousands of businesses and millions of consumers with an immediate solution to the problem of e-mail churn," he added.

Return Path competes with ActiveNames, a New York-based company offering a similar value proposition, which has a reseller partnership with e-mail company FloNetwork. ActiveNames' service requires consumers to download an application that warns them when they send e-mail to a "dead" address, and alerts others when they send e-mail to the consumers' "dead" address.