Ad network 24/7 Media is in talks to sell off its Sabela unit, in an effort to pare down its technology offerings and monetize an investment that it’s yet to have working as it had hoped.
Sabela, which forms the backbone of 24/7 Media’s Connect for Advertisers and Publishers, is the Alley-based company’s standalone ad serving product.
While the sale could open a hole in its product line — Sabela competes with DoubleClick’s AdServer, for instance — the company maintains it’s a prudent choice.
David Moore, the company’s chief executive, told internetnews.com on Friday that the sale of Sabela would make money off of an asset the company had originally intended to integrate into Connect for Networks, the ad serving platform running its media network.
“We currently have two ad serving solutions,” Moore said. “We had hoped to combine them someday; however, we don’t have the time or the money to do it now. As a result, we’re selling Sabela and keeping Connect, the system we built to serve our Web site network.”
24/7 Media had plunked down $75 million in stock for the company, but in revealed in recent regulatory filings that it has written off the investment as impairment, at $47.9 million.
A spokesperson for 24/7 Media said the sale of Sabela wouldn’t necessarily put it out of the third-party ad serving business altogether, but would require modifications to 24/7 Connect for Networks to handle serving on an ASP basis.
But with its product offerings including only an ASP-based ad serving solution — and not a fully standalone software package — the news could give competitors room to move in. In addition to DoubleClick, several other ad networks offer ad serving software packages in addition to ASP services.
The changes suggest a larger shift in strategy: 24/7 Media had intended its purchase of Sabela in January 2000 to help it rival to DoubleClick’s product line, which offers AdServer and DART (a combined ASP/ad network serving platform). Now, it seems the company is less concerned about creating a DoubleClick-like product array, opting instead to focus on more pressing financial matters.
The revelation comes on the heels of the company’s Thursday announcement that it would trim 100 staffers and close some offices in an effort to save $10 million annually.
24/7 Media also revealed in its recent 10K filing that it is shutting down operations of AwardTrack, a subsidiary that created and managed online promotions. Another $75 million purchase, AwardTrack rolled out the latest update to its customer loyalty product in August. 24/7 said it has written down the value of AwardTrack at $55.5 million.
