Uproar to Buy TrafficMarketplace.com

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.