Engage, CMGI‘s flagship advertising property, moved
into Canada on Friday, acquiring the Virtual Billboard Network
advertising network for approximately $5 million in stock.
The purchase gives Engage a presence in Canada, and
expands its reach by around 150 Web sites and 30 million monthly
impressions. VBN was one of the largest Canadian advertising media companies.
CMGI’s strategy in the advertising arena has been to
fold some of its properties into Engage, creating a powerhouse company with
many separate divisions. Engage earlier this year swallowed Flycast Technologies and Adsmart.
Under the terms of the deal, VBN will be re-named Engage Canada, and Tom
Rothfels, the network’s chief executive officer, will become general manage
of Engage Canada. The company’s staff of 13 will be folded into the Engage
operations, and the sales force will represent all of the company’s offerings.
“Our acquisition of VBN demonstrates Engage’s commitment to global
expansion, and marks the first step in penetrating the Canadian online
marketing space,” said Paul Schaut, Engage president and ehief executive
officer.
In talking of the move, Engage cited a 1999 Ernst & Young and IAB Canada
survey which found that Canadian online publishers received approximately
$55.5 million in ad revenues, with this number expected to reach $109
million in 2000.
The two companies had been strategic partners before reaching an agreement
for the acquisition.