DoubleClick Snaps Up 24/7 Media's Sabela
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For some time, 24/7 Media has been endeavoring to sell off portions of its company to raise capital. Now the ad network has a buyer for its Sabela Media division -- its biggest competitor, DoubleClick.
The agreement between the two Alley-based rivals, announced Wednesday, requires 24/7 Media to fork over the intellectual property assets of Sydney, Australia-based Sabela Media. 24/7 retains Sabela's other assets, like its IT infrastructure, but DoubleClick gains the rights to Sabela's ad serving software.
Financial terms of the agreement were not disclosed, although 24/7 Media originally paid about $75 million for the company in January 2000.
Not only does the sale raise needed cash for 24/7 Media, but spokespeople confirmed earlier reports that the sale eliminated redundancies in its ad serving technology. Specifically, soon after 24/7 Media acquired Sabela, spokespeople announced its intention of integrating the Aussie firm's ad serving product with its own solution, 24/7 Connect, which is used only to power 24/7 Media's ad network, but which ultimately will become the basis of an ASP solution.
Nevertheless, a spokesperson from 24/7 Media said Wednesday that the company had taken enough from Sabela to create its own third-party hosted version of Connect -- meaning that 24/7 won't face much of a gap in its product line as a result of the sale, once that product hits the market.
"Sabela Media was purchased to accelerate the incorporation of key functional capabilities into 24/7 Media's ad serving technology, 24/7 Connect," said 24/7 Media's Andrew Fawcett, who is vice president of technology solutions at the Alley-based firm. "By monetizing the assets of Sabela, we are eliminating technology redundancies, reducing our cash burn and focusing exclusively on the expansion of 24/7 Connect worldwide."
Another 24/7 Media spokesperson said that the company will concentrate on expanding the firm's technology business to Europe. 24/7 Connect currently serves the company's ad network in the United States, Canada and Latin America.
24/7 Media said it would support Sabela's ad serving clients for the time being. However, as part of the deal, DoubleClick will begin offering Sabela Media clients the option of migrating to its own TechSolutions offerings -- its DART fully outsourced service, or its AdServer software.
Since it gains access to Sabela's clients, DoubleClick, meanwhile, is banking that the acquisition beefs up its offerings, in what has become its fastest-growing region for lucrative tech sales.
DoubleClick currently has 150 technology clients in the Asian region, including Sina, Nikkei and Lycos Japan. Add to that Sabela's roughly 150 clients worldwide, and DoubleClick is counting the deal as a win.
"DoubleClick has always been committed to maintaining the leading position in the ad serving business, and we've been able to achieve this through both organic growth and through acquisitions," said Chris Saridakis, senior vice president of global TechSolutions. "Sabela Media's success in the Asian market is most evident in their client base. We look forward to working with their clients to build on ad serving standards in one of our fastest growing global markets."
A spokesperson for DoubleClick said that the client transition would take place during the next few weeks; accordingly, Sabela would be shut down within a month.