CMGion Brings AdForce Into The Fold

CMGI Inc. continues to shuffle its operating companies, announcing Wednesday that its networking infrastructure unit CMGion acquired AdForce, which is building a management and delivery platform for online ads.

For those keeping score at home, this is the second internal transaction since CMGI’s promise last month to create a leaner, more focused company. In the first internal deal, on Sept. 15, CMGion acquired Tribal Voice, an instant messaging company owned by CMGI.

CMGI has been AdForce’s majority owner since January, when it paid $545 million for the company. CMGI said AdForce fits well with CMGion, which formed in April to create a global network service offering efficient delivery of applications and content to Internet users.

The acquisition makes Chuck Berger, chairman and CEO of AdForce, the CEO of CMGion, whose interim CEO had been CMGI CEO David Wetherell. CMGion, based in Andover, will move its headquarters to AdForce’s home in Cupertino, Calif. It will keep an Andover office.

“The synergies between CMGion and AdForce are clear – CMGion gains a leading turnkey ad serving and content delivery technology solution from AdForce and AdForce takes advantage of CMGion’s global distribution platform and industry partnerships,” Berger said.

AdForce will run as a wholly-owned subsidiary of CMGion. It will keep its focus on digital ad management and delivery across the Internet, but will also focus on emerging interactive devices including cell phones, PDAs, kiosks, point-of-sale devices and interactive television, CMGI said.

At one time, CMGI owned four advertising properties, Engage Technologies, Flycast Communications, Adsmart and AdForce. Recently, the first three were merged into one, Engage, to create a one-stop Internet advertising powerhouse.

AdForce is building its ad-services network by placing thousands of servers around the world to deliver up to a billion ads per day, at an average delivery speed of a half-second. The system has the ability to send targeted ads to users based on their preferences.

CMGIon is majority owned by CMGI; investors include Sun Microsystems, Novell and Compaq, whose equipment is being used by the CMGion network.

CMGI, which has stakes in 70 Internet-related business, said last month it would combine companies with the goal of running six distinct segments including infrastructure and enabling technologies; search and portals; e-business and fulfillment services; interactive marketing; Internet professional services; and venture capital.

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