AdForce Stock Takes a Whipping

The stock of Cupertino, CA-based ad server company AdForce Inc. took a beating after the
company lost its fourth-largest customer, GeoCities, following Yahoo!’s $4.05
billion acquisition of GeoCities last week.

AdForce said it will no longer service ads for GeoCities as Yahoo! takes over
managing the ads on its own. The stock closed Wednesday at 21 9/16, down 7 3/8.

AdForce said GeoCities, a provider of personal Web
pages, accounted for 17 percent of the company’s revenue last month.

“You win some, you lose some and we lost this one,” AdForce Chief Financial
Officer John Tanner told Bloomberg News.

Since hitting a closing high of 50 7/16 on May 13, AdForce has lost about 60
percent of its value. The company went public at $15 a share last month.
Yahoo! and AdForce did reach agreement on
terms under which AdForce will provide back up ad serving to Yahoo! during
transition. Additionally, AdForce and Yahoo! entered into a third party ad
serving agreement, authorizing AdForce to serve ads on behalf of advertisers
on Yahoo!’s global network of Web properties. Financial arrangements were not

“While we are obviously surprised and disappointed with Yahoo!’s decision, we
will work closely with Yahoo! and GeoCities throughout the transition and
look forward to the opportunity to demonstrate AdForce’s capabilities to
Yahoo!,” said Chuck Berger, chairman and CEO of AdForce.

“Despite losing GeoCities as a customer to the Yahoo! consolidation, we
expect to show continued revenue growth this quarter, a clear indicator of
the strength of our overall business.”

AdForce provides products that allow advertisers and publishers to target,
deliver, measure and analyze Internet advertising programs for best results.

News Around the Web