DoubleClick Sees Ad Recovery Materializing

DoubleClick beat analyst expectations and said it saw signs of an ad rebound when it announced its second-quarter earnings on Tuesday.

For the second quarter, DoubleClick reported revenues of $63.6 million, down from the $75.7 million reported in the same period a year ago. DoubleClick attributed the shortfall to its shedding of some business units. Revenues were up 6 percent from last quarter.

Net income was $5.8 million, or 4 cents a share, beating analyst expectations by a penny and exceeding net income of $4.1 million in last year’s second quarter. In the first quarter of this year, DoubleClick took in $906,000. Much of the company’s positive returns came from a $26.3 million decrease in operating costs — attributed to its exiting from certain businesses and ongoing cost cutting.

Revenues from DoubleClick’s ad management products were $32.6 million, down 14 percent from a year ago. DART for Advertisers saw revenues grow by 22 percent while DART for Publishers’ revenues fell 2 percent.

“I can definitely see and feel a pickup in confidence in our clients,” said Kevin Ryan, DoubleClick’s chief executive, in a conference call. “The fundamentals are very positive.”

In the e-mail space, DoubleClick said it saw some falloff, as spam took its toll and marketers became more strategic in their e-mail marketing. DARTmail saw revenues fall 7 percent from last year’s second quarter to $9.2 million.

“Right now, we’re not seeing substantial growth in the e-mail business,” Ryan said. “Every customer is frustrated by the amount of spam out there, and that’s affecting open rates and response rates.”

In total, DART and DARTmail served 151 billion ad impressions, a 9 percent increase from the first quarter.

The company signed a multiyear deal with eBay to use its ad management software, which Ryan said was probably the largest deal the company has made.

Looking ahead, the company gave a mixed view. It revised its earnings forecast to the high end, to 7 cents to 12 cents a share. Previously, the company had 3 cents per share as its low-end guidance. On the revenue front, the company said it would take in $260 million to $275 million. Previously, it forecast revenue between $250 million and $300 million.

The company said it expects its new rich media offering, DART Motif, would begin taking hold next year, after its full launch in November. DoubleClick officially rolled out Motif last week, although it the multi-event reporting feature will not be ready until November. Ryan said DoubleClick would hope to gain a large share of the $45 million market.

“Given our market share in ad serving, over time we’d like to get as big a piece as possible,” he said.

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