CMGI Considering AdForce Sale

Internet investment and operating company CMGI Tuesday said it’s considering “strategic alternatives” for its ad-serving unit AdForce — codewords for a potential sale.

During its second quarter earnings announcement Tuesday evening, CMGI said that it was considering divesting AdForce, which would be consistent with other recent moves by the floundering company. CMGI recently closed free ISP and entertainment portal iCAST, and also announced the “exiting” of e-commerce payment business ExchangePath.

The holding company said that Cupertino, Calif.-based AdForce’s bottom line has suffered from the industry-wide slowdown in online ad spending, though it did not disclose specifics.

AdForce has played second-fiddle to ad network and technology firm Engage — which has outsourced ad serving products of its own — since CMGI acquired the smaller firm in January, 2000 for about $545 million. During a CMGI-wide restructuring in October, AdForce was shunted into CMGion, a Web and emerging media content delivery firm similar to Akamai.

From there, AdForce continued its business with a greater focus on delivering emerging and streaming media ads. In January, AdForce inked a deal with Net-Mercial to deliver that company’s rich media interstitials. Prior months saw AdForce striking a streaming video ad partnership with iVAST, and an iTV ad-targeting agreement with Wink Communications.

Despite the announcements, Andover, Mass.-based CMGI made little public about how AdForce fit into the business of its immediate parent CMGion — which is still in “stealth” mode, as it has been since its launch in April, 2000.

While CMGI confirmed that an outright sale of AdForce is possible, it also said there were other routes it could take to divest the unit. It did not discuss specifics, however.

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