Alley-based Internet entertainment network Uproar said it plans to acquire online
ad brokerage service TrafficMarketplace.com, in a deal valued at about $5.85
million.
Under the terms of the agreement, Uproar will acquire all outstanding shares of
Trafficmarketplace.com in a stock-for-stock transaction, in which
Trafficmarketplace.com stockholders will receive an aggregate of about 3.6 million
shares of Uproar common stock.
Eight-month-old TrafficMarketplace.com works with both advertisers and
publishers, facilitating the purchase and sale of CPM, CPC or CPA banners ads,
interstitials, and e-mail lists.
Similarly to an online marketplace like OneMediaPlace, TrafficMarketplace.com’s
services offer a way to move excess inventory.
Advertisers can purchase across sites that have agreements with the company, on
affiliated ad networks, or on application-based media (such as in e-mail programs,
or on persistent ad windows used by free ISPs). TrafficMarketplace said it has
relationships with about 125 publishers, for whom it sells space anonymously, in
bulk.
“Partnering with Uproar creates an incredibly lucrative opportunity for both
companies” said TrafficMarketplace.com chief executive officer Evan Rifkin. “It
will increase our market presence and allow us to leverage their buying power while
giving us access to one of the fastest growing segments on the Internet, which is
games and entertainment.”
Uproar operates several advertising-supported entertainment sites, including
games sites uproar.com and ibetcha.com, lottery site iwin.com and humor site
amused.com.
While Uproar stands to boost its sites’ revenue through additional sales through
the service, the company will gain most through a wholly new added revenue stream.
That’s helpful, as, according to recent regulatory filings, the company is spending
about $10.6 million on marketing while taking in only about $5.5 million in gross
profit — revenues less the cost of revenues. The firm also posted a loss last
quarter of about $11.9 million, or $0.41 per share.
“The acquisition of TrafficMarketplace.com provides us with several significant
benefits,” said Uproar chairman and chief executive Ken Cron. “It will enable
Uproar to lower the cost of customer acquisition, better leverage our marketing
spend, and diversify our business model. Additionally, it will provide our sales
employees with a terrific path for additional growth within the company.”
Uproar does not plan to relocate the Los Angeles-based company, which has 20
employees.
At press time, shares of UPRO were trading unchanged from the day’s open at
$1.63, about 4.6 percent off the stock’s 52-week high of $35.
