Shares of 24/7 closed Friday up 6 7/8 to 47 3/8 in trading of 3.2 million
shares, five times its three-month daily average. DoubleClick itself rose 4
3/4 to 136 5/8.
In July, DoubleClick Chairman Kevin J. O’Connor said the company is seeking
to buy more Internet advertising companies to expand ad sales that are now on
more than 1,300 Web sites. 24/7 would add about 150 Web sites to broaden
DoubleClick’s customer base.
“Together, they would be that much more powerful,” Dana Serman, an analyst
with Lazard Freres & Co., told Bloomberg News. “24/7 has established its
own relationships with publishers, which would be important for DoubleClick
to have on its own.”
The companies themselves have declined to comment. The news was first
reported by the online newsletter Silicon Alley Reporter, which
said the deal might be valued at $1.5 billion.
It makes sense in many ways, especially in the wake of the recent buying
spree by Internet holding company CMGI Inc., which already owns the Adsmart network and profiling firm Engage Technologies. CMGI is acquiring ad
Still, should one believe everything one reads? Not according to an insider
at 24/7, who sent IAR an e-mail saying: “Rumors about 24/7 and Double Click
have been around for months. We’re jaded on them. Considering that I saw and
spoke to the brass this week and last week, I have a hard time believing
they’re in some hotel smoking cigars with
The rumors have indeed been around; speculation among investors and analysts
about a DoubleClick purchase began early this year, analyst Tara Long of C.E.
Unterberg Towbin told Bloomberg..
DoubleClick had sales of $80.2 million last year, while 24/7 had $20 million
in sales. In the second quarter of this year, DoubleClick had a loss from
operations of $5.1 million, or 13 cents a share, while 24/7 had a net loss of
$7.2 million, or 37 cents a share.
DoubleClick’s shares have risen tenfold this year, enabling it to use its
shares as currency for acquisitions.
Long said if there is no transaction, 24/7’s shares could return to the low