ValueClick Promises Mediaplex Benefits

Pay-for-performance ad network and server ValueClick posted results in-line with expectations — but promised big synergies would soon come from its recent acquisition of Mediaplex.

For fourth quarter, Westlake Village, Calif.-based ValueClick posted revenues of $12.2 million, up 19 percent from last quarter. Net losses totaled $2.7 million, or $0.06 per share.

For the entire year, ValueClick’s revenues topped $44.9 million, leading to a net loss of $7.2 million, or $0.19 per share. In 2000, the company posted a loss of $55.3 million, or $1.72 per share.

It’s a relatively lackluster performance, considering that pay-for-performance pricing has fueled rivals like Overture to profitability, and that competitor DoubleClick — which owns a stake in ValueClick — beat estimates for fourth quarter. ValueClick also has had a history of turning a pro forma profit, though it posted a pro forma loss of about $805,000 during the quarter.

The numbers include two months of financial results for ad serving technology firm Mediaplex, which ValueClick officially acquired in late October, and which is likely helping to offset losses from ValueClick’s media sales. Mediaplex is less than a quarter away from profitability, according to the company.

“In terms of the media side of our business, like the rest of the advertising industry, we continue to face a sluggish market in all of our worldwide operations,” said ValueClick chief executive Jim Zarley during a conference call with analysts on Wednesday. “We have sensed some bottoming out since the period after Sept. 11, and are just now beginning to see some promising signs. Nonetheless, the visibility for significant recovery for the advertising industry is still cloudy.”

But while media remains sluggish, the acquisition of Mediaplex — which markets an ad serving solution for advertisers dubbed MOJO — is expected to continue to pay further returns by beefing up ValueClick’s technology revenues.

Zarley said ValueClick had already begun to see benefits from synergies out of the Mediaplex purchase, most specifically in sales of ValueClick’s publisher-side software, Dynamo (recently rebranded as MOJO for Publishers.) According to Zarley, Mediaplex’s technology sales team is seeing success in representing MOJO for Publishers alongside MOJO for Advertisers.

“We’ve been able to realize the efficiencies we’ve predicted and have already been able to capitalize on the synergies between our organizations,” he said. “In terms of technology sales, this synergy is evidenced by the fact that ValueClick has added several clients since the merger.”

Zarley also said clients were eager to sign up because of ValueClick’s financial health: the closure of its purchase of Mediaplex added more than $46 million in cash and marketable securities to its coffers, bringing the company’s total hoard to more than $163 million.

During the quarter, ValueClick added new business from clients including Dell, Universal Pictures, MasterCard and General Motors.

Additionally, Zarley said the company plans to cross-sell Mediaplex’s ad serving technology to existing ValueClick media clients in Europe and Asia during the coming quarter.

“This is just the beginning,” he said.

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